Canada Shareholder Agreement with Put Option

A Shareholder Agreement protects the interests of a corporation's shareholders and minimizes the risks of share ownership. This Canadian template contains a buy-sell or "put" option.

• This Agreement can be used anywhere in Canada.
• The Shareholder Agreement establishes the obligations of the shareholders and the corporation to each other, and sets out any restrictions on share transfers or the issue of new shares.
• The remaining shareholders have a right of first refusal to acquire the shares of a departing shareholder, before the shares can be offered to a third party.
• A departing shareholder also has a buy-sell or 'put' option, which would require the remaining shareholders to purchase his/her shares. The put option is available only after the departing shareholder has been unsuccessful in finding a third party purchaser for a period of 6 months.
• The template contains buy-sell options for both an assured buy-out and a mandatory or 'shotgun' buy-sell.
• If a shareholder dies, the surviving shareholders have the option to buy the deceased shareholder's shares, failing which they must be purchased by the corporation.

This Canada Shareholder Agreement with Put Option can serve to avoid unnecessary conflict by having the owners agree on management issues and exit strategies at the outset.