Shareholders' Agreement
(for Enterprise)

The shareholders' agreement

When incorporating a corporation, if the shares are owned by more than one person, it is advisable that the shareholders sign a shareholders’ agreement. In some scenarios, such an agreement is mandatory.

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What is a shareholders' agreement?

The shareholders’ agreement is a contract signed by the shareholders of a company in order to fix the regulations, in a global manner, the operation and structure of the company, the nature of the relations that the shareholders will have between them and their duties towards the company.

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The shareholders’ agreement is also used to anticipate the actions to be taken in different cases in order to avoid cases of disputes between shareholders. For example, what is planned for the following situations:

  • one of the shareholders wants to sell his or her share of the business;
  • one of the shareholders dies;
  • one of the shareholders goes bankrupt.

In any case, you will benefit from anticipating all possible situations from the beginning rather than having to settle disputes later in court.

It is advisable to seek the help of a lawyer or notary to prepare a shareholders’ agreement.

Elements to be included in a shareholders' agreement

  • Names of shareholders
  • Financial participation of each of the shareholders
  • Commitment of each shareholder to the company
  • Description of tasks
  • Information on each shareholder’s life insurance plan
  • Salaries and dividends received by each shareholder
  • Allocation of profits or losses
  • Terms and conditions in the event of the departure or death of a shareholder
  • Terms and conditions in the event of bankruptcy
  • Non-competition clause
  • Signatures of shareholders and a witness
  • Date of signature

Unanimous shareholder agreement

There is another type of shareholder agreement called a unanimous shareholder agreement. The latter differs from the shareholders’ agreement in its purpose, which is to restrict the power of the directors and to increase that of the shareholders with regard to the management of the company.

Take advantage of our know-how!

In the absence of a shareholders’ agreement, there is a good chance that the company will be vulnerable to unforeseen events. If some companies manage to avoid conflicts between partners, negotiations may still sometimes last, while making you lose money.

For this, we suggest you contact us. The use of incorporation professionals will protect you from risks and provide you with a protection clause. You will be guaranteed to have defined good relations and to protect yourself from an acquisition by a third party.

We are available to provide you with legal support through the drafting of clauses. We are expanding our services throughout the province of Quebec. In this way, we guarantee our customers a successful incorporation and a real assurance for the stability and future of their company.

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