Law Society Of Bc Shareholder Agreement Checklist

Shareholder agreements are important documents and must be carefully crafted. Clients will often ask for a “simple” shareholders` agreement (although it may not exist) and they may first object to the costs of a comprehensive and correct agreement. It may be useful to ask them if they have taken into account the following issues, which are known to employ procedural lawyers: if you are dealing with a tightly managed company with more than one shareholder, you will always want to draw the attention of shareholders to the need to consider a shareholders` agreement. If you are jointly required by all shareholders to design the agreement, you should recommend that each shareholder have the agreement audited by independent counsel prior to signing. If you are only mandated by one of the shareholders to design the shareholders` agreement, inform the other that you are not acting for them and that everyone should get independent legal advice. It is useful to have a dispute resolution mechanism in a shareholders` agreement, even if it is only a shotgun buyout clause (for example. B group A requests the end of the business relationship. You say to Group B, “We buy your shares for the amount XXX.” Otherwise, Group B can use “No. We will buy your shares for this amount. One of the objectives of this counter-offer option is to ensure that those who try to buy the other party offer a fair price or even a premium). Such a mechanism will result in the separation of enemy shareholders and compensation from the outgoing shareholder. A shareholders` agreement should therefore always contain a provision obliging shareholders to amend the articles of association so that the articles of association are compatible with the shareholders` agreement in the event of an opposition or conflict between the documents. A shareholders` agreement can be an effective way to define the details of the company`s activity.

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