BUY-SELL / BUSINESS SUCCESSION AGREEMENT
This template is for the Owners of a private corporation to agree, in advance, what happens to an Owner's Interest on death, disability, retirement, departure or deadlock — who must buy, who must sell, how the price is set, and how it is paid. It assumes the Corporation already exists and has issued Interests. It is not suitable for a public corporation, a partnership's succession planning (see partnership instead), or use in Quebec.
Drafting notes appear in italics and are to be deleted before execution. Square brackets mark information to be filled in. Delete any inapplicable optional clauses and renumber before execution.
⚠️ This template overlaps the shareholders template. Read that template, and this Agreement's README, before choosing how to use this one. A shareholders' agreement commonly contains its own transfer restrictions, right of first refusal, shotgun, tag/drag and mandatory-transfer-on-death provisions (sections 9–15 of the shareholders template). Section 2 below requires the drafter to state whether this Agreement is standalone or is intended to operate as a schedule to an existing Shareholders' Agreement. Do not adopt both this Agreement's buy-sell mechanics and equivalent provisions in a Shareholders' Agreement for the same Owners and Interests — two documents independently governing the same mandatory transfer produces conflicting obligations about who must buy, at what price, and on what timeline. See the README for the recommended approach.
⚠️ Valuation and funding are commercial and tax questions this template does not resolve. Section 12 offers three valuation mechanisms and section 13 offers two funding mechanisms as flagged alternatives. This template does not recommend one over another — the right choice depends on the Corporation's financial position, the Owners' ages and insurability, and tax structuring that requires an accountant's or tax advisor's input. This is why this template is delivery: lawyer-in-the-loop.
THIS AGREEMENT is made as of [Date].
BETWEEN:
[Corporation Legal Name] (the "Corporation")
— and —
[Owner 1 Legal Name], of [Owner 1 Address]
— and —
[Owner 2 Legal Name], of [Owner 2 Address]
(each an "Owner" and together the "Owners"; the Corporation and the Owners are together the "Parties")
This template assumes two Owners for readability. If there are more than two, replicate the parties block and the signature block for each additional Owner, and adjust Schedule A accordingly.
WHEREAS the Owners own all of the issued and outstanding Interests of the Corporation, and the Parties wish to record their agreement as to what happens to an Owner's Interest on that Owner's death, disability, retirement, departure, bankruptcy, or on a deadlock among the Owners;
NOW THEREFORE in consideration of the mutual covenants below, the Parties agree as follows:
Interpretation
In this Agreement:
"Corporation" means [Corporation Legal Name];
"Interests" means the issued and outstanding shares in the capital of the Corporation, of every class, held by an Owner;
"Fair Market Value" means the value of an Interest, determined under section 12;
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Canada note
This version is drafted for Canada. Provinces differ on employment standards and Quebec applies civil law rather than common law. Tell GitLaw which province applies and it adjusts the draft.
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