You and three friends have decided to incorporate a business that will buy and sell art online that focuses on the work of up-and-coming artists. The plan is for each of you to own equal shares of the business and manage it together. The business has not yet been incorporated.

You and your associates identify five mixed media art pieces you want to purchase to launch the site. To reduce your personal liability on the contracts to purchase the art, what should you do prior to signing the purchase contracts?

One of your associates says that she wants to incorporate the business because a corporation's shares are freely transferable, making it easy for shareholders to liquidate their investments. You know better. Explain to her why free transferability of the shares as a legal matter is a problem for all of you. Also explain why free transferability of the shares as a practical matter does not exist. What could you do to address the share transferability issues?

Sketch the contents of a buy-sell agreement that addresses all the transferability issues