Experienced B.C. Business Lawyers Assisting with Shareholder Agreements

No matter the size of your business, good corporate governance is essential to its continued success. When a corporation is created, the founding shareholders determine its structure, and how it will be owned, operated and managed. A shareholder agreement is then created to document the arrangement between two or more shareholders, or between the corporation and all of the shareholders. This agreement is a fundamentally important aspect of that company and careful and measured thought should be put into it before it is finalized. It is essential to create a shareholder agreement with guidance and advice from an experienced business lawyer.

At Cherkowski Marsden LLP, our corporate lawyers have drafted countless shareholder agreements for businesses of all sizes and in varying industries. We understand the contentious issues that commonly arise between shareholders, as well as pain points specific to certain industries, and as a result, are highly adept at tailoring agreements to proactively avoid or minimize those issues.

What is a Shareholder Agreement?

A shareholder agreement sets out the rights and obligations that each shareholder has between themselves as individuals and the corporation. In the course of business for any company, disputes will arise. Resolving, and better yet, anticipating and preventing those disputes in the first place is key to the smooth operation of any venture, large or small.

Shareholder agreements will vary in complexity depending on the type of corporation being created. A small shop front with two owners will have a very different agreement than a multi-national renewable energy company with a large number of shareholders. Accordingly, shareholder agreements should always be drafted to reflect the unique needs of the business. Although agreements will vary, there are certain key elements that are important to include, such as:

  • The structure of the corporation;
  • Equity division amongst shareholders;
  • How key decisions will be made;
  • The specific duties assigned to each shareholder, and their relationship to the company (i.e. will they be deemed an employee of the business);
  • How board members and directors will be compensated;
  • Specifics relating to the frequency, location and conduct of shareholder meetings;
  • What constitutes a quorum for purposes of shareholder meetings;
  • The terms of conduct in the daily operation of the company;
  • Dispute resolution terms including determination of jurisdictional issues and methods of resolution; and
  • Protection of ownership through the restriction of transfers to third parties.

Irrespective of the size of your corporation, it is important to have a shareholder agreement in place to manage risk. Maximize benefits and help to safeguard the long-term success of the business.

For Guidance and Assistance with Drafting Shareholder Agreements contact the Seasoned Corporate Lawyers at Cherkowski Marsden LLP

The corporate lawyers at Cherkowski Marsden LLP in Vernon have 50 years of combined experience and extensive knowledge assisting businesses of all sizes and complexities draft shareholder agreements. Call us at 250-308-0338 (Vernon office) or 250-803-9171 (Salmon Arm office) or contact us online to schedule a consultation.