Document background
The Cross Purchase Agreement serves as a critical business succession planning tool in Ireland, particularly suitable for closely-held companies and professional practices with multiple shareholders. It addresses the fundamental need to maintain control over company ownership while providing shareholders with a guaranteed exit mechanism. The agreement typically specifies triggering events (such as death, disability, retirement, or voluntary departure), establishes share valuation methods, and details the funding arrangements for share purchases. Often, life insurance policies are used to fund potential purchases, especially in cases of death or disability. The document must comply with Irish Companies Act 2014 requirements regarding share transfers and relevant tax legislation. It provides certainty for business continuity, prevents unwanted third-party ownership, and ensures fair treatment of departing shareholders or their estates.
