Shareholder & cofounder agreements
A private contract among the owners of a corporation that sets out each shareholder’s rights and obligations, and establishes how ownership, control, and key decisions are handled as the business evolves.
We draft new shareholder agreements built around your business, and review agreements you’ve been asked to sign, covering decision-making, share transfers, exits, and disputes.
These terms are easy to agree on while interests are aligned and nearly impossible after they diverge. When properly drafted, the agreement you sign early is the one that protects you later.
Two founders start on the same page: 50/50 ownership, shared decisions, mutual trust. Then things change when one founder wants to:
Suddenly everyone remembers the original agreement differently. That’s what a shareholder agreement is for.
Drafting
We draft a shareholder agreement tailored to your business: the ownership structure, the terms agreed between the owners, the industry you operate in, and your plans for growth.
Who sits on the board, how directors are chosen, and which major decisions need shareholder approval and at what voting threshold, so control is clear from the outset.
When and how an owner can sell or transfer shares: restrictions on selling to outsiders, permitted transfers to family or holding companies, and rights of first offer or refusal that keep ownership within the group.
The right of existing owners to participate in new share issuances before anyone else, so your ownership percentage isn’t diluted without the chance to maintain it.
Protections on a sale, letting minority owners join a deal on the same terms, and letting a majority deliver the full sale a buyer wants.
What happens when an owner dies, becomes disabled, divorces, goes bankrupt, or leaves the business.
How shares are priced when a buy-sell is triggered, whether by formula, appraisal, or an agreed annual value, and how the purchase gets paid, so an exit doesn’t turn into a fight over price.
A clear mechanism for breaking a stalemate when owners can’t agree on a major decision, so the business keeps moving.
Protecting the business from disclosure of confidential information and, where appropriate, from owners competing against it.
You tell us about the corporation, who owns what, and the shareholders involved, so we understand your ownership structure before we talk.
We get on a call to work through the key terms: governance, share transfers, exits, and what matters most to the owners. We confirm the scope and flat fee before any drafting begins.
We draft the shareholder agreement around those terms and revise it with you until it reflects exactly how you want ownership, control, and exits to work.
All shareholders sign the finalized agreement, and you receive a fully executed copy for your corporate records.
Review
Handed a shareholder agreement to sign by a co-founder, an investor, or a corporate counterparty? We review it as your own lawyer, explain what each part means in plain language, flag the risks and anything one-sided or missing, and tell you what’s worth negotiating before you commit.
A clear risk summary including:
Share the agreement and any related documents.
We read it in full and assess the terms, the risks, and anything missing, unusual, or one-sided, measured against where you stand.
We give you a summary of the key terms, a summary of the risks we’ve flagged, and specific recommendations on the clauses we believe you should push back on before signing.
That’s exactly when you need one. The agreement isn’t a sign of distrust, it’s how you keep the relationship intact when the business hits a hard decision. Most disputes between co-owners come from never having agreed what happens when things change, not from bad intentions.
Without an agreement, nothing forces a resolution, and the business can stall indefinitely. A deadlock clause sets out a mechanism agreed in advance, so a stalemate has a path forward instead of ending in litigation or a wind-up application.
The default rules in the Ontario Business Corporations Act and your articles govern, and they don’t address the situations that matter most: an owner who wants out, a deadlock, a co-owner’s divorce or death. When one of those happens, you’re negotiating under pressure with no agreed rules.
As early as possible, ideally at or shortly after incorporation. The terms are easy to agree on while interests are aligned and nearly impossible after they diverge.
You can, but a template doesn’t know your ownership split, your industry, or what the owners have agreed between themselves, and the gaps only show up when you need the agreement most. Getting it drafted around your actual arrangement is a one-time cost that protects against a much larger one.
We review existing agreements too, whether you’ve been asked to sign one or you want to know if what you signed years ago still fits how the business runs today.
Let’s build the agreement that protects you and your co-owners. The first conversation is on us.
Book a free consultationThe information above is general in nature and is not legal advice. Every situation and transaction is different, and advice tailored to your specific circumstances is required to address your particular needs. If you have questions, contact Align Counsel at info@aligncounsel.ca.