[vc_row full_width=”stretch_row_content_no_spaces”][vc_column][layerslider_vc id=”25″][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space height=”50px”][vc_column_text]<\/p>\n
[\/vc_column_text][vc_separator color=”custom” border_width=”4″ el_width=”10″ accent_color=”#45f0df”][vc_empty_space height=”50px”][\/vc_column][\/vc_row][vc_row full_width=”stretch_row_content”][vc_column width=”2\/6″ css=”.vc_custom_1523298315912{padding-right: 100px !important;background-color: #5f4f87 !important;}”][vc_column_text css=”.vc_custom_1537479538022{padding-top: 230px !important;padding-right: 40px !important;}”]<\/p>\n
The guide to shareholder governance<\/span>[\/vc_column_text][vc_separator color=”custom” align=”align_left” border_width=”4″ el_width=”30″ accent_color=”#45f0df” css=”.vc_custom_1536353400079{padding-bottom: 230px !important;}”][\/vc_column][vc_column width=”4\/6″][vc_row_inner css=”.vc_custom_1523298118777{padding-top: 20px !important;}”][vc_column_inner width=”1\/3″][vc_column_text css_animation=”slideInRight”]<\/p>\n \uf103<\/i><\/span><\/p>\n The partners should establish how much each shareholder plans to contribute to the business. This contribution is not solely related to money but also related to time, effort..etc.<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][vc_column_text css_animation=”slideInRight”]<\/p>\n \uf103<\/i><\/span><\/p>\n Depending on the contributions of each shareholder, the shareholders must establish the percentage in ownership of the business. Will the shares be split 50\/50 or 25\/75?<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][\/vc_column_inner][\/vc_row_inner][vc_row_inner][vc_column_inner width=”1\/3″][vc_column_text css_animation=”slideInRight”]<\/p>\n \uf103<\/i><\/span><\/p>\n The shareholders should establish how the profit, losses and expenses of the business will be split and who will be paid first. If the shareholders expect to receive dividends or a payout, the agreement should state it.<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][vc_column_text css_animation=”slideInRight”]<\/p>\n \uf103<\/i><\/span><\/p>\n The shareholders should establish how disputes will be resolved internally. Establishing a dispute resolution process early on can make the dispute navigation process much smoother.<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][\/vc_column_inner][\/vc_row_inner][vc_row_inner css=”.vc_custom_1523298125157{padding-bottom: 20px !important;}”][vc_column_inner width=”1\/3″][vc_column_text css_animation=”slideInRight”]<\/p>\n \uf103<\/i><\/span><\/p>\n The shareholders should establish what should happen in the event of death, disability or incapacity of one of the shareholders. Who will get their shares in the business?<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][vc_column_text css_animation=”slideInRight”]<\/p>\n \uf103<\/i><\/span><\/p>\n The shareholders should establish how the business will be dissolved and how they can withdraw from the business. The dissolution clause will determine the exit strategies of the shareholders<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space][vc_column_text]<\/p>\n [\/vc_column_text][vc_separator color=”custom” border_width=”4″ el_width=”10″ accent_color=”#45f0df” css=”.vc_custom_1523649570154{padding-bottom: 20px !important;}”][\/vc_column][\/vc_row][vc_row][vc_column width=”1\/4″][vc_column_text css=”.vc_custom_1523299862719{background-color: #ffffff !important;}”][\/vc_column_text][\/vc_column][vc_column width=”1\/2″][vc_btn title=”Contact Us” style=”custom” custom_background=”#5f4f87″ custom_text=”#ffffff” shape=”square” align=”center” link=”url:http%3A%2F%2Fchalatilegal.ca%2Fen%2Fcontact-us%2F|||” css=”.vc_custom_1554744553324{padding-bottom: 50px !important;}”][\/vc_column][vc_column width=”1\/4″][vc_column_text css=”.vc_custom_1523299862719{background-color: #ffffff !important;}”][\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space][vc_column_text]<\/p>\n A handful of some of the industries we’ve worked with<\/p>\n [\/vc_column_text][vc_separator color=”custom” border_width=”4″ el_width=”10″ accent_color=”#45f0df”][\/vc_column][\/vc_row][vc_row][vc_column][vc_row_inner][vc_column_inner width=”1\/3″][vc_icon type=”linecons” icon_linecons=”vc_li vc_li-shop” color=”custom” background_style=”boxed” background_color=”custom” size=”lg” align=”center” custom_color=”#ffffff” custom_background_color=”#5f4f87″][vc_column_text]<\/p>\n Retail<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][vc_icon type=”linecons” icon_linecons=”vc_li vc_li-t-shirt” color=”custom” background_style=”boxed” background_color=”custom” size=”lg” align=”center” custom_color=”#ffffff” custom_background_color=”#5f4f87″][vc_column_text]<\/p>\n Fashion & Design<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][vc_icon type=”material” color=”custom” background_style=”boxed” background_color=”custom” size=”lg” align=”center” custom_color=”#ffffff” custom_background_color=”#5f4f87″][vc_column_text]<\/p>\n Food & Beverage<\/p>\n [\/vc_column_text][\/vc_column_inner][\/vc_row_inner][vc_row_inner][vc_column_inner width=”1\/3″][vc_icon type=”material” icon_material=”vc-material vc-material-phonelink” color=”custom” background_style=”boxed” background_color=”custom” size=”lg” align=”center” custom_color=”#ffffff” custom_background_color=”#5f4f87″][vc_column_text]<\/p>\n E-commerce<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][vc_icon type=”material” icon_material=”vc-material vc-material-money_off” color=”custom” background_style=”boxed” background_color=”custom” size=”lg” align=”center” custom_color=”#ffffff” custom_background_color=”#5f4f87″][vc_column_text]<\/p>\n Not-for-Profit & Charities<\/p>\n [\/vc_column_text][\/vc_column_inner][vc_column_inner width=”1\/3″][vc_icon type=”material” icon_material=”vc-material vc-material-account_balance” color=”custom” background_style=”boxed” background_color=”custom” size=”lg” align=”center” custom_color=”#ffffff” custom_background_color=”#5f4f87″][vc_column_text]<\/p>\n Real Estate<\/p>\n [\/vc_column_text][\/vc_column_inner][\/vc_row_inner][vc_empty_space][\/vc_column][\/vc_row][vc_row full_width=”stretch_row_content” css=”.vc_custom_1523389709001{background-color: #45f0df !important;}”][vc_column width=”1\/4″][\/vc_column][vc_column width=”1\/2″][vc_column_text css=”.vc_custom_1523649430654{padding-top: 50px !important;}”]<\/p>\n [\/vc_column_text][vc_separator color=”custom” border_width=”4″ el_width=”10″ accent_color=”#5f4f87″][vc_btn title=”Learn More” style=”custom” custom_background=”#5f4f87″ custom_text=”#ffffff” shape=”square” align=”center” link=”url:http%3A%2F%2Fchalatilegal.ca%2Fen%2Fknowledge-base%2F|||” css=”.vc_custom_1534865041566{padding-bottom: 50px !important;}”][\/vc_column][vc_column width=”1\/4″][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=”.vc_custom_1523302936027{padding-top: 50px !important;}”]<\/p>\n Find As to your Qs<\/p>\n [\/vc_column_text][vc_separator color=”custom” border_width=”4″ el_width=”10″ accent_color=”#45f0df” css=”.vc_custom_1523649049598{padding-bottom: 32px !important;}”][\/vc_column][\/vc_row][vc_row full_width=”stretch_row_content” css=”.vc_custom_1523382416223{padding-right: 42px !important;padding-left: 42px !important;}”][vc_column][vc_tta_accordion style=”modern” shape=”square” active_section=”90000000″ collapsible_all=”true”][vc_tta_section title=”What is a shareholder?” tab_id=”1536353801609-94ea7164-3634″][vc_column_text]A shareholder is an individual, group, corporation or organization that owns one or more shares in a corporation and who has a share certificate issued in their name.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”What is an officer?” tab_id=”1523388080539-0744c53f-6328″][vc_column_text]An officer of a corporation is an individual that is duly appointed to manage the day-to-day operations of a corporation.<\/p>\n These officers typically hold the positions of President, Vice-President, Treasurer and Secretary in the corporation.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”What is a director?” tab_id=”1523388152433-2591f92e-10dc”][vc_column_text]The directors of a corporation will oversee and supervise the activities of the corporation. They will also make decisions regarding those activities.<\/p>\n The directors will sit on the board of directors and vote on certain decisions regarding the corporation.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”What is a shareholder agreement?” tab_id=”1523388080578-6ed954ef-bc4f”][vc_column_text]A shareholder agreement (also known as a “stockholder agreement”) is an agreement made between all the shareholders of a corporation. The agreement will establish certain regulations regarding the operations of the company along with detailed rules outlining how certain matters affecting the shareholders of the company will be dealt with.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Which businesses need a shareholder agreement?” tab_id=”1536334426458-553b863a-7e34″][vc_column_text]Whether you are a large company or start-up, if you have a corporation with more than one shareholder, you should have a shareholders’ agreement.<\/p>\n Partnerships do not require shareholders’ agreement but rather partnership agreements<\/a>.<\/p>\n [\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Can we include a non-compete or non-solicitation clause in a shareholder agreement?” tab_id=”1523388117677-c8dba870-c2af”][vc_column_text]Yes, the shareholders can definitely include a non-compete and non-solicitation clause in their shareholders’ agreement.<\/p>\n The non-compete clause can prevent the shareholders from directly competing with the corporation during or after their involvement in the corporation. Similarly, a non-solicitation clause can prevent a shareholder from soliciting other shareholders, employees, directors or officers of the corporation to leave the corporation for another.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Why are shareholder agreements important?” tab_id=”1523388135649-279e82db-67db”][vc_column_text]Shareholders Agreements are most valuable when certain problematic situations arise in a corporation. For instance, if a shareholder dies, if the relationship breaks down, there is misconduct, disagreement, dissolution or withdrawals, the shareholder agreement will establish a set of rules and guidelines to handle these particular situations.<\/p>\n For more information on why shareholder agreements are so important for a business, please read our blog post on the topic, here<\/a>.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”What elements are covered in a shareholders agreement?” tab_id=”1537557632576-c2cdcc62-dad9″][vc_column_text]The key elements included in a shareholders agreement are, namely:<\/p>\n [\/vc_column_text][\/vc_tta_section][vc_tta_section title=”What are pre-emption rights?” tab_id=”1537553185638-397c1bef-78af”][vc_column_text]A pre-emption right is a right given to existing shareholders to purchase newly issued shares from the Corporation before they are offered to third parties. This right exists in order to allow shareholders to retain their percentage in the ownership and control of the corporation. Also, it prevents a shareholder from selling shares to a potentially undesirable third party.<\/p>\n [\/vc_column_text][\/vc_tta_section][vc_tta_section title=”What is a shot gun clause?” tab_id=”1537553195811-e57d36ab-f059″][vc_column_text]A shot-gun clause is used as a form of dispute resolution. It allows a shareholder to offer to purchase the shares of another shareholder at a certain price. The shareholder will have the option of either accepting the offer or buying the offering shareholder’s shares at the same price.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”What is a right of first refusal?” tab_id=”1537553247264-51bf79f0-a21f”][vc_column_text]A right of first refusal will allow a shareholder to purchase the shares of an existing shareholder before them being offered to a third party. In this case, the shareholder who wishes to sell their shares will provide notice in writing to all the other shareholders in the corporation who will then have the first chance to purchase or refuse the shares.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”What are piggy-back rights?” tab_id=”1537553271843-41c91ae5-dad8″][vc_column_text]Piggy-back rights (also known as “tag-along rights”) protect minority shareholders in the event of a third party buyout. In this case, the minority shareholder can force other majority shareholders wishing to sell their shares to a third party to also sell the minority shareholders shares at the same price and on similar terms.<\/p>\n Therefore, if the third party wishes to purchase the majority shareholder’s shares, they must be prepared to purchase any outstanding minority shareholder shares.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=”Can I use a shareholder agreement for a partnership?” tab_id=”1528908283338-377e8be0-3122″][vc_column_text]No, shareholder agreements are strictly for corporations. If your company is constituted as a partnership and you are more than one partner, you should be signing a partnership agreement. For more information on partnership agreement, please visit our partnership agreement page<\/a> or contact us at the form below.[\/vc_column_text][\/vc_tta_section][\/vc_tta_accordion][vc_empty_space][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n Request a consultation via the form below<\/p>\n [\/vc_column_text][vc_separator color=”custom” border_width=”4″ el_width=”10″ accent_color=”#45f0df”][lab_contact_form name_title=”Name.” email_title=”Email.” message_title=”Message.” show_subject_field=”yes” subject_title=”Phone.” submit_success=”Thank you, message sent!” alert_errors=””][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":" [vc_row full_width=”stretch_row_content_no_spaces”][vc_column][layerslider_vc id=”25″][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space height=”50px”][vc_column_text] Our full shareholders’ agreement service for businesses. [\/vc_column_text][vc_separator color=”custom” border_width=”4″ el_width=”10″ accent_color=”#45f0df”][vc_empty_space height=”50px”][\/vc_column][\/vc_row][vc_row full_width=”stretch_row_content”][vc_column width=”2\/6″ css=”.vc_custom_1523298315912{padding-right: 100px !important;background-color: #5f4f87 !important;}”][vc_column_text css=”.vc_custom_1537479538022{padding-top: 230px !important;padding-right: 40px !important;}”] 6\u00a0Key Elements of a Shareholder Agreement.\u00a0 The guide to shareholder governance[\/vc_column_text][vc_separator color=”custom” align=”align_left” border_width=”4″ el_width=”30″ accent_color=”#45f0df” css=”.vc_custom_1536353400079{padding-bottom: 230px !important;}”][\/vc_column][vc_column width=”4\/6″][vc_row_inner css=”.vc_custom_1523298118777{padding-top: 20px !important;}”][vc_column_inner width=”1\/3″][vc_column_text css_animation=”slideInRight”] Contributions…<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"class_list":["post-13708","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/chalatilegal.ca\/en\/wp-json\/wp\/v2\/pages\/13708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chalatilegal.ca\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/chalatilegal.ca\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/chalatilegal.ca\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/chalatilegal.ca\/en\/wp-json\/wp\/v2\/comments?post=13708"}],"version-history":[{"count":16,"href":"https:\/\/chalatilegal.ca\/en\/wp-json\/wp\/v2\/pages\/13708\/revisions"}],"predecessor-version":[{"id":14416,"href":"https:\/\/chalatilegal.ca\/en\/wp-json\/wp\/v2\/pages\/13708\/revisions\/14416"}],"wp:attachment":[{"href":"https:\/\/chalatilegal.ca\/en\/wp-json\/wp\/v2\/media?parent=13708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Contributions<\/span><\/h1>\n
Ownership<\/span><\/h1>\n
Distributions<\/span><\/h1>\n
Disputes<\/span><\/h1>\n
Death or Disability<\/span><\/h1>\n
Dissolution<\/span><\/h1>\n
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Who we help.<\/span><\/h1>\n
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Discover our resources section. You’ll find videos, guides and contracts to guide you through the legal of your business.<\/span><\/h1>\n
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