How to issue an option to purchase a share in an LLC
Posted: Tue Jan 07, 2025 5:52 am
In the financial, investing and legal communities, there are often terms that are rarely heard in everyday speech. Option is one of these concepts.
What is an option, how exactly is it executed and what are the differences between an option and an option agreement? Mikhail Bozhor, CEO of the law firm Afonin, Bozhor and Partners, answered the questions.
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Content:
What is an option and an option contract
Option Agreement for a Share in an LLC
Rules for drawing up an agreement
Guarantees of an option to acquire a share in an LLC
What is an option and an option contract
In practice, situations often arise where the malta whatsapp phone number execution of a transaction needs to be tied to the occurrence of certain conditions. For example, a supplier may grant a buyer the right to purchase a product at a certain price at some point in the future, and the buyer may pay the supplier for that right. Such an agreement between the parties is called an “option,” and has been used for decades in trading commodities, including currencies, raw materials, and public company stocks.
The term "option" is not only used in stock trading: such agreements can arise in many other situations where the execution of a transaction is subject to a condition. Options can be used to conclude almost all types of civil law contracts, as an alternative to collateral, or for the purpose of motivating personnel.
For a long time, the possibility of using options in Russian legislation was regulated only at the level of judicial practice. The situation changed in 2015, when Articles 429.2 (Option to conclude an agreement) and 429.3 (Option agreement) were introduced into the Civil Code (CC RF). There is some difference between these two concepts.
An option to conclude a contract is the right to conclude a contract on certain terms. And an option contract is the right to demand that the other party perform specific actions. For example, transfer a payment or transfer property.
The differences between the two structures are largely theoretical and affect only the execution of agreements between the parties to the transaction. Ultimately, the same economic effect is achieved in the case of the implementation of an option or the execution of an option contract.
We answer questions about the anti-money laundering law and advise you on what to do if you encounter restrictions in the course “The most important things about 115-FZ” .
What is an option, how exactly is it executed and what are the differences between an option and an option agreement? Mikhail Bozhor, CEO of the law firm Afonin, Bozhor and Partners, answered the questions.
Subscribe to RB.RU in Telegram
Content:
What is an option and an option contract
Option Agreement for a Share in an LLC
Rules for drawing up an agreement
Guarantees of an option to acquire a share in an LLC
What is an option and an option contract
In practice, situations often arise where the malta whatsapp phone number execution of a transaction needs to be tied to the occurrence of certain conditions. For example, a supplier may grant a buyer the right to purchase a product at a certain price at some point in the future, and the buyer may pay the supplier for that right. Such an agreement between the parties is called an “option,” and has been used for decades in trading commodities, including currencies, raw materials, and public company stocks.
The term "option" is not only used in stock trading: such agreements can arise in many other situations where the execution of a transaction is subject to a condition. Options can be used to conclude almost all types of civil law contracts, as an alternative to collateral, or for the purpose of motivating personnel.
For a long time, the possibility of using options in Russian legislation was regulated only at the level of judicial practice. The situation changed in 2015, when Articles 429.2 (Option to conclude an agreement) and 429.3 (Option agreement) were introduced into the Civil Code (CC RF). There is some difference between these two concepts.
An option to conclude a contract is the right to conclude a contract on certain terms. And an option contract is the right to demand that the other party perform specific actions. For example, transfer a payment or transfer property.
The differences between the two structures are largely theoretical and affect only the execution of agreements between the parties to the transaction. Ultimately, the same economic effect is achieved in the case of the implementation of an option or the execution of an option contract.
We answer questions about the anti-money laundering law and advise you on what to do if you encounter restrictions in the course “The most important things about 115-FZ” .