When starting a business and bringing in shareholders, it’s important to have an agreement in place that outlines the rights and responsibilities of each shareholder. There are two types of shareholder agreements: regular shareholder agreements and unanimous shareholder agreements (USAs).
A regular shareholder agreement is an agreement between the shareholders of a corporation that governs the relationship between the shareholders and the corporation. This agreement typically outlines the rights and obligations of the shareholders, including their voting rights, the issuance of new shares, and the sale of existing shares. The terms of a regular shareholder agreement are typically agreed upon by a majority of the shareholders.
A unanimous shareholder agreement, on the other hand, requires the agreement of all shareholders. This type of agreement provides more protection for minority shareholders, as it requires the approval of all shareholders before certain actions can be taken. This can include the issuance of new shares, the sale of existing shares, and changes to the corporation’s bylaws.
When deciding which type of agreement to use, it’s important to consider the size of your business and the level of control you want each shareholder to have. A regular shareholder agreement may be more appropriate for a small business with a small number of shareholders, while a unanimous shareholder agreement may be more appropriate for a larger business with multiple shareholders.
Working with a lawyer can help ensure that your shareholder agreement is tailored to the specific needs of your business and its shareholders. If you’re in need of legal advice regarding shareholder agreements, contact Falcon Law PC at 1-877-892-7778 or info@falconlawyers.ca for assistance.
