Breach of a Unanimous Shareholder Agreement

Contact Neufeld Legal PC at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com

Dealing with a shareholder's breach of the unanimous shareholders agreement.

Unanimous shareholders agreements contain a series of restrictive covenants that preclude the shareholders from undertaking certain actions. Nevertheless evermore with such written restrictive clauses, shareholders have been known to act in breach of these specific provisions. This in turn has repercussions not only for the company, but also the other shareholders, who don't benefit from theresults of the breach.

As such when a breach of the unanimous shareholders agreement occurs, it is important to discern how the other shareholders wish to deal with such an occurrence. For whereas the others shareholders may not wish to destroy the company by instituting costly litigation, they should not be denied the potential of participating in the opportunity created from the breach. Therefore, under the direction of an experienced corporate lawyer, the other shareholders should negotiate with their breaching partner an arrangement that enables for their equitable participation in any resulting outcome of the breach and this should be formalized in a written agreement that is signed by all the shareholders and strictly enforceable against the breaching shareholder.

With over twenty years of legal experience in reviewing and drafting unanimous shareholders agreements, combined with a perceptive business approach to the analysis and development of those agreements, we provide unparalleled review services of unanimous shareholders agreements. And unfortunately corporate shareholders really need those services, given how inadequate most unanimous shareholders agreements are. Instead they are given a false sense of security since another lawyer drafted the agreement, even though in all likelihood it was merely a copied template that they received, which shows little more that than replace names and shareholdings.

At Neufeld Legal PC, we operate from a long term business perspective and work to construct a highly particularized agreement that reflects what the corporate shareholders really want and need. This applies to both the review and the construction of unanimous shareholders agreements, making all the difference with respect to the company's operation and future.

For knowledgeable and experienced legal representation in negotiating and drafting a shareholders agreement that advances your business interests and those of the corporation, contact us at 403-400-4092 [Alberta], 905-616-8864 [Ontario] or Chris@NeufeldLegal.com.

What is a Unanimous Shareholders Agreement?

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