What is a Shareholder Agreement? Should my Company have one?

Where a Company has more than one owner, a Shareholder Agreement is used to create the rules and procedures that govern the voting and transferability of the Shares.  The terms of the agreement generally include limitations of Voting Shares, restrictions on the transfer of Shares, and a method for determining the value of Shares transferred between Shareholders.

A Shareholder Agreement is used to protect Shareholders and the continuity of the Company in certain events. It acts as a backstop to protect the Company and Shareholders where there is a disagreement on the operations and/or ownership.

Legal Advice Disclaimer: The information presented on this website serves solely as general guidance and should not be construed as legal advice by MacDonald, Illig, Jones & Britton LLP as a replacement for seeking personalized legal counsel from a qualified attorney. MacDonald, Illig, Jones & Britton LLP does not assume liability for the accuracy or reliability of content hosted on any third-party websites accessible through links provided on this site.