What the agreement settles
- Who can buy shares, and at what price.
- How a departing owner is bought out, and how the price is set.
- What happens to an owner’s shares on death or disability, often funded by insurance.
- Rights of first refusal, and drag-along and tag-along rights on a sale.
- Which major decisions need everyone’s approval.
- What happens if the owners are deadlocked.
- Non-competition and non-solicitation after an owner leaves.
Unanimous shareholder agreements
Under Ontario’s Business Corporations Act, an agreement signed by every shareholder can generally also restrict the powers of the directors. That is called a unanimous shareholder agreement.
New agreements and updates
We draft agreements for new companies and review or update older ones, often when a new investor joins or the share structure changes, including companies with more than one class of shares.
Your shareholders’ agreement and your will should say the same thing about your shares.
Read more: What a shareholders’ agreement should cover.
What to bring
Your articles of incorporation, the current share register, and a list of the questions you and your partners have not settled yet.
Common questions
We already have an agreement. Should we review it?
Yes, if the owners, the share structure or the business has changed since it was signed, or if it doesn’t deal with death, disability or valuation.
Can one lawyer act for all the shareholders?
Often the company retains the lawyer, and each owner is encouraged to get independent advice before signing. We will explain how it works for your group.
This page is general information about Ontario law, not legal advice for your situation.