Imagine two childhood friends started an IT company. They split ownership 50/50. The company has been successful for five years, yet they cannot agree on anything. One desires rapacious growth, and the other desires gradual development. Neither is able to outvote the other. Disagreement has paralyzed their business. This is where a unanimous shareholder agreement […]
Launching a business with co-founders is thrilling, but even the best partnerships can disintegrate due to a lack of a legal foundation. When starting from scratch with people you trust, it feels unnecessary to set formal agreements in place until there is a disagreement.. That’s where founders’ agreements and shareholder agreements become your safety net.
What to Include in a Founders’ Agreement Read More »
A shareholders’ agreement is a contract among a corporation’s owners (shareholders) that governs their relationship, rights, and obligations. In Ontario, these agreements work alongside the Ontario Business Corporations Act (OBCA) and the Canada Business Corporations Act (CBCA), although they are not legally required by those statutes. Instead, a well-drafted agreement offers stability and clarity: it
How Often Should You Review Your Shareholders’ Agreement? Read More »
In Ontario, the Business Corporations Act (OBCA) provides the basic rules for running a corporation, but it does not cover every detail of how owners interact. A shareholder agreement is a private contract among the owners that fills in those details. It legally binds shareholders to agreed-upon rules about decision-making, share transfers, dispute handling and
Role of Shareholder Agreements in M&A transactions Read More »
In Ontario, the Agreement of Purchase and Sale (APS) is the legally binding contract that sets out the terms under which a seller agrees to transfer, and a buyer agrees to acquire an interest in property. Once signed, the APS governs the entire process from the initial deposit through to closing, allocating risks, obligations, and
Essential Elements Of A Contract Of Purchase And Sale Read More »
A shotgun clause is among the strongest but most risky provisions in a shareholder agreement. Alternately referred to as a buy-sell provision, this provision can either be your business partnership’s savior in the midst of disputes that cannot be reconciled or the very provision that facilitates your untimely departure from the company you helped establish.
Shotgun Clauses in Shareholder Agreements for Ontario Business Owners Read More »
Key Takeaways An asset purchase agreement (APA) is a legally binding business acquisition agreement where the buyer acquires specific assets of a business, rather than buying shares of the company. Choosing between asset purchase and share purchase can significantly impact tax implications, liabilities, and control over the business. A well-drafted Business Asset Purchase Agreement ensures
Asset Purchase Agreement in Ontario: Everything You Should Know Read More »
A Sublease is a contract where a commercial tenant (the Sublandlord) rents out all or part of their leased space to another business (the Subtenant). The Sublandlord remains responsible under the original lease, while the Subtenant pays rent to the Sublandlord and occupies the space. In a Sublease, the original lease stays in effect, but
Commercial Sublease Agreements in Ontario Read More »
In Ontario’s fast-paced business world, corporate takeovers are becoming a more popular growth strategy among entrepreneurs and investors. One key legal tool in these processes is the Share Purchase Agreement (SPA), a legally enforceable document controlling the conditions of acquiring shares in a company. It provides that the acquirer receives ownership of the corporation, its
How to Write a Share Purchase Agreement in Ontario: A Complete Guide. Read More »
