Unanimous Shareholder Agreement

A unanimous shareholder pact allows you to focus more on the operation and growth of your business than on the events that occur to put your business at risk. A USA is the most common form of shareholder pact. A USA covers all the shareholders of the company, both now and in the future. In addition to articles and statutes, a United States is considered one of the group`s framework documents. For this reason, under the legislation, a United States cannot be amended without the written consent of all shareholders on the effective date of the amendment. The main advantage of the United States is that it generally contains provisions in two main areas: decision-making and share transfers, which are particularly useful in the event of an unexpected freeze or deferral of share ownership following the bankruptcy or death of a shareholder. The United States is generally recommended when there are two or more shareholders in a very narrow company. The process of creating the United States can also be incredibly beneficial, especially in the early stages of the company`s organization, as it sets expectations and creates provisions that ideally will avoid long, costly and potentially damaging quarrels in the future. In the event that the provisions of a unanimous shareholders` pact are not respected, there are several ways to apply it, including through contract law, the request for an injunction to a decision that leads to unanimous compliance with the shareholders` pact, “assistance in repression” or the request to dissolve the company in court. When a shareholder holds a majority stake in a company, it is important to consolidate in a contract decisions that should not be taken by a simple majority. According to Toronto-based boutique firm Wakulat Dhirani, LLP, the United States can “identify a class of critical decisions requiring an overwhelming majority and/or unanimous shareholder agreement to ensure that the majority shareholder is unable to make unilateral decisions without prior agreement from other parties involved.” Why does it matter? If you have a minority shareholder that you have subsequently filed for financing purposes and who does not agree with the proposed amendment, you have no recourse. If you are probably in such a situation, a standard shareholder contract may be a better option for you.

Capital requirements: Access to financing will be important at different stages of a company`s existence. The United States can determine how capital is generated and impose sanctions if shareholders do not contribute to the amount required on the basis of their shares in the company. The United States can also determine how liability is distributed and how guarantees are signed if the need for debt financing arises. Of course, this is a very high-line statement of shareholder agreements. If you currently do not have a shareholders` pact and want to put in place to give some structure to the management of your business, our corporate lawyers at Duncan Craig LLP can help you determine what type of agreement would best serve your business. While it is impossible to sit down and list all potential events that could impact the business in the future, a structure that provides a framework to support and lead the board can be very helpful for the company. A framework for decision-making provides greater security and fairness to all parties involved and helps to protect the interests of majority and minority shareholders in the same way.

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