Unanimous Shareholders Agreement
When a corporation has two or more shareholders, it is prudent for the shareholders to consider entering into a Unanimous Shareholders Agreement (“USA”).
A USA is an agreement amongst shareholders and the corporation about matters of governance and management. Some of the following issues might be resolved by way of a USA:
Who will make up the Board of Directors?
How will decisions be made? Will anyone have a casting vote?
Who will be the officers (President/Vice President/Secretary/Treasurer)?
How will the corporation obtain its financing?
In what situations will the shareholders be required to advance funds to the corporation
How will these advances be repaid?
How will personal guarantees be handled by the corporation?
Can shares be transferred and in what situations?
What restrictions should be placed on the corporation in the conduct of its business?
What will happen if a shareholder dies? How will shares be paid out if no insurance is in place?
What will happen if a shareholder divorces?
How might a shareholder’s interest be bought out? Will there be a right of first refusal?
Will there be a shot-gun buy-sell provision for the purchase of shares?
How will shares be valued for a sale of shares?
How will disputes be resolved? Will the parties resolve disputes by way of Arbitration? Mediation?
Are there certain acts by shareholders that will be considered acts of default? How will such defaulting shareholder’s shares be purchased?
What about profit? How much will be retained by the corporation? How much paid out to shareholders and in what priority?
Should there be a restrictive covenant in place?
Our knowledgeable and experienced business law team will speak to you to discuss your need for a Unanimous Shareholders Agreement for your corporation.
For more information, please contact our office for an appointment. We can be reached by email at email@example.com or by phone at 780-482-7691.
NOTICE TO READER: The summaries of legal rights and remedies described above are general references to the Alberta laws existing at the date of the publication and may not apply to the reader’s individual circumstances. Also, the laws may change. These legal summaries are not to be relied upon as applicable to your individual circumstances and are subject to a complete review of the facts and applicable laws in every case.