Shareholder agreements and corporate governance

Agreements and governance

You do not sign an agreement
for today.

Two partners who get along need no document. That is precisely why most Quebec companies operate for years without an agreement, and why the problem only surfaces once it has become unsolvable.

A shareholder agreement organizes three things: who decides what, what happens when the shareholders stop agreeing, and what happens when one of them leaves, falls ill or dies. None of those questions is theoretical.

Our work is to get the partners to say, while they still agree, what they will do when they no longer agree. It is an uncomfortable conversation, and that is exactly what gives the document its value.

Board of directors meeting in a glass-walled room

What we do

Write the rules
while there is still time.

Governance and decision-making

Board composition, simple and special majorities, decisions reserved to shareholders, veto rights. Who can bind the company, and up to what amount.

Exit mechanisms

Right of first refusal, tag-along, drag-along, and the shotgun clause where appropriate. Each mechanism protects someone different.

Share valuation

The valuation formula is the most frequently rushed and the most frequently contested clause. It must produce a predictable result without a costly expert opinion every time.

Departure, disability, death

Mandatory buy-back, cross life insurance, treatment of shares passing to heirs. Without those clauses you end up in business with your partner’s spouse.

Non-competition undertakings

A non-compete clause between shareholders follows different rules from one in an employment contract. It is also easier to enforce.

Unanimous shareholder agreement

Where it withdraws powers from the board and gives them to the shareholders, the agreement becomes unanimous and binds any future acquirer of the shares.

Services

Shareholder agreements
Partnership agreements
Subscription and investment agreements
Unanimous shareholder agreements
Buy-sell clauses between shareholders
Voting agreements

Frequently asked questions

What we are asked most.

Is a shareholder agreement mandatory?

No. No statute requires one. But without it, the Business Corporations Act and the Civil Code decide in your place, with rules designed for the general case rather than for your situation.

Can I use a template found online?

The risk is twofold. A generic template contains mechanisms that do not match your balance of power, and omits the ones you would need. A shotgun clause between a wealthy shareholder and one without liquidity, for instance, is not a balanced mechanism.

What if a shareholder refuses to sign?

Nothing compels them, which is itself useful information. The discussion usually reveals a substantive disagreement about control or value, better addressed now than in five years.

Does the agreement need updating?

Yes, on every change of shareholders, on every investor entry and on any significant change in value or activity. A 2015 agreement rarely describes the business of 2026.

Going further: the shareholder agreement, the contract you sign for the day it goes wrong, and the shotgun clause, the most misunderstood mechanism in these agreements.