SHAREHOLDERS' AGREEMENT
This template is for the shareholders of a private corporation incorporated federally or in a Canadian common-law province or territory. It is not suitable for a public corporation, and it is not suitable for 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 assumes the Corporation already exists and has issued Shares. It does not cover incorporation itself. It assumes a small number of Shareholders who are all parties to this Agreement — it is not drafted for a corporation with shareholders who are not party to it.
⚠️ Restricting the directors' powers requires exact compliance. If the Shareholders intend this Agreement to operate as a statutory unanimous shareholders agreement — shifting some or all of the directors' powers, and the liabilities that go with them, to the Shareholders exercising those powers — the applicable corporate statute prescribes specific mechanics for that to take effect. This template flags where that choice is made (section 2.3) and does not assert that doing so, on its own, satisfies those mechanics. Confirm compliance with the applicable statute before relying on this Agreement to shift directors' powers or liability.
THIS AGREEMENT is made as of [Date].
BETWEEN:
[Corporation Legal Name] (the "Corporation")
— and —
[Shareholder 1 Legal Name], of [Shareholder 1 Address]
— and —
[Shareholder 2 Legal Name], of [Shareholder 2 Address]
(each a "Shareholder" and together the "Shareholders"; the Corporation and the Shareholders are together the "Parties")
This template assumes two Shareholders for readability. If there are more than two, replicate the parties block and the signature block for each additional Shareholder, and adjust Schedule A accordingly.
WHEREAS the Shareholders own all of the issued and outstanding Shares of the Corporation, and the Parties wish to record their agreement as to the governance of the Corporation and their respective rights and obligations as Shareholders;
NOW THEREFORE in consideration of the mutual covenants below, the Parties agree as follows:
Interpretation
In this Agreement:
"Board" means the board of directors of the Corporation;
"Fair Market Value" means the value of a Share, determined under section 14;
"Offer Notice" has the meaning given in section 10.1;
"Permitted Transferee" means, in respect of a Shareholder who is an individual, [that Shareholder's spouse, child, or a trust for their benefit / a corporation Controlled by that Shareholder];
"Shareholder" means a holder of Shares who is a party to this Agreement, and "Shareholders" means all of them;
"Shares" means the issued and outstanding shares in the capital of the Corporation, of every class; and
"Triggering Event" has the meaning given in section 13.1.
The recitals and Schedules form part of this Agreement.
Purpose and Share Capital
The Corporation is incorporated under [the Canada Business Corporations Act / the Business Corporations Act of [Province]].
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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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