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Corporate / Commercial Law
 
Partnership & Shareholder Agreement
 

Partnership Agreement

Using a partnership agreement to formalize your joint venture or other endeavours allows you and your partner(s) to stipulate the rights and obligations of each party involved, and prevent problems from escalating into full-blown crises. This is especially so if the partnership involves the “legal marriage” of two distinct corporations, which is fairly common in the situation of a joint venture, of which a legal entity is formed for a particular investment project.

A well drafted partnership agreement should answer these questions:

  1. What is the monetary and other financial obligation of each partner?

  2. What is the work going to be allocated between the partners?

  3. What constitutes as income and how profits and losses are to be shared?

  4. What is partnership property, and what are properties that belongs to the individual partners?

  5. Are partners allowed to use partnership properties for purpose unrelated to the partnership business, and if so what are the boundaries?

 

How will disputes related to the partnership Be Resolved? Any mediation / arbitration clauses?

What happens if one partner retire, dies or become incapacitated? How will the sale of the business shares be handled?

A partnership agreement is complex, and it’s easy to miss out some key terms, HTW Law strongly recommend that you seek legal advice allowing you to make an informed decision, and have your partnership agreement drawn up by a lawyer to make sure that all rights and obligations of each party involved are properly protected.

HTW Law can help. Call us now at 647-849-6582 or send us a message if you have some legal questions / inquiries or want to schedule an appointment with HTW Law.

Shareholders Agreement

Regardless of the nature of the business, a well drafted shareholders agreement is the key to success. It provides a clear and unambiguous picture of how financial and operational decisions are to be made while establishing the legal boundaries of the parties involved. Every successful business has a shareholders agreements that unify the shareholders into a cohesive framework.

A general shareholders agreement deals with a wide variety of issues. Some of the key functions that many shareholders agreements address are:

  1.     Management and governance of the day-to-day activities of the business;

  2.     Terms and Restrictions on Selling Corporate shares;

  3.     How disagreements or breakdowns are to be handled;

  4.     Valuation methods for the corporate shares;

  5.     Non-Compete, Non-Disclosure, Non-Solicitation of business.

A shareholders agreement is complex, and it’s easy to miss out some key terms, HTW Law strongly recommend that you seek legal advice allowing you to make an informed decision, and have your shareholder agreement drawn up by a lawyer to make sure that all rights and obligations of each party involved are properly protected.

HTW Law can help. Call us now at 647-849-6582 or send us a message if you have some legal questions / inquiries or want to schedule an appointment with HTW Law.

Unanimous Shareholders Agreements

A unanimous shareholders agreement (“USA”) is a specific type of shareholders agreement, and is the most important type of shareholders agreement. Although shareholders are owners of the corporation, the business is managed and governed by directors.

The Ontario Business Corporations Act (OBCA) (governs Ontario incorporated businesses), and the Canadian Business Corporations Act (CBCA) (governs Federal incorporated businesses) both allow for shareholders to restrict the powers of directors to manage, or supervise the management of, the business and affairs of the corporation. 

It should be noted that whatever powers are being delegated from the directors to the shareholders, the same legal and equitable obligations will also be transferred, including liability that would normally be imposed on the directors.

Another unique attribute of an USA is that it can bind future shareholders without requiring their signature or consent on the USA, provided that, of course, the share certificates bear a notice of the existence of the USA.

As you can see since every single shareholder has to sign the USA, it should be in place at the earliest stage possible.

Drafting a shareholders agreement or an USA is highly technical. When drafting a shareholders agreement, great care must be taken to to make sure that all rights and obligations of each party involved is reduced to writing; and that the financial interests of all related parties are properly protected.

HTW Law can help. Call us now at 647-849-6582 or send us a message if you have some legal questions / inquiries or want to schedule an appointment with HTW Law.