Shareholders Agreement Ontario Sample

In some cases, it is desirable to include a right allowing the company to buy back shares of a founder on the basis of the death, insolvency, disability or participation of the founder in a division of family property, as in the case of adultery. These provisions oblige the shareholder concerned to resell his shares to the company (or to other shareholders). These provisions often include a mechanism for valuing the repurchased shares. Strict pre-emption rights require holders to first have a bona foit offer from a third party before the shares are offered to other shareholders of the company. This can make it difficult to sell the shares, as few third-party investors want to take the trouble to make an offer just to get nothing in the end. Flexible pre-emption rights require the selling shareholder to first offer to its co-shareholders, and if they refuse the purchase, the shares can then be offered to third parties. It should be noted that the right of pre-emption applies to all shareholders or a subset of all shareholders (i.e. founders). Right of pre-emption: If a shareholder wishes to sell his shares and part of the company, he must first offer to sell his shares at a fair value to other shareholders.

If the shareholders cannot acquire them, the selling shareholder can offer them to a third party. 5.4 When the shareholders accept the offer mentioned in the issue communication, the shareholders will subscribe to the shares issued in accordance with the issue communication and will make a written subscription in accordance with it, which will be immediately accepted by the company. Shareholders have the right to subscribe for and acquire the issued shares in the shares they have agreed upon or, if they do not agree, in their ordinary shares. . . .