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Prevents conflicts down the road and provide for greater control to shareholders than is standard under Canada’s corporate legislation
Allow for ownership to create their desired framework as a company grows and begins to generate revenue, or in the worse-case scenario, faces financial hardship.
Avoids disagreements that may relate to specifics of profit sharing or funding the corporation, rights related to shareholders transferring their shares to third parties, and/or how the Board of Directors manages the corporation
Whether for a newly incorporated or growing business, a unanimous shareholder agreement may prevent conflicts down the road
Co-owning a corporation often leads to unforeseen conflicts down the road. Before, or as a business scales and begins to generate profit, conflicts will naturally arise within ownership. These disagreements may relate to specifics of profit sharing or funding the corporation, rights related to shareholders transferring their shares to third parties, and/or how the Board of Directors manages the corporation or appoints and delegates powers to the corporation’s Officers. A unanimous shareholder agreement will promote predictability on these conflicts, and in turn allow the business to operate smoothly without insurmountable or costly disagreements between owners as a business grows. A shareholder agreement may also limit conflict between ownership in financially trying times for a corporation. That said, often, more points of conflict arise in the former case.
Whether for a newly incorporated or growing business, a unanimous shareholder agreement may prevent conflicts down the road
Co-owning a corporation often leads to unforeseen conflicts down the road. Before, or as a business scales and begins to generate profit, conflicts will naturally arise within ownership. These disagreements may relate to specifics of profit sharing or funding the corporation, rights related to shareholders transferring their shares to third parties, and/or how the Board of Directors manages the corporation or appoints and delegates powers to the corporation’s Officers. A unanimous shareholder agreement will promote predictability on these conflicts, and in turn allow the business to operate smoothly without insurmountable or costly disagreements between owners as a business grows. A shareholder agreement may also limit conflict between ownership in financially trying times for a corporation. That said, often, more points of conflict arise in the former case.
As a corporate shareholder, you may be concerned about the management of the corporation by a Board of Directors either in the present or future. Under Canadian corporate law, a Board of Directors has discretion to manage the business and affairs of a corporation, as well as appoint officers and designate the duties of those officers. As part of a shareholder agreement, shareholders can limit, specify, and contour the powers of a Board of Directors to retain greater control in their corporation and mold its future.
