Dangers of a Generic Shareholder Agreement

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

Generic / boilerplate unanimous shareholders agreement can prove extremely dangerous, especially when the stakeholders are operating under a false presumption that they have adequate legal protections.

It is extremely unfortunate that far too many people, lawyers included, believe that a single form of unanimous shareholders agreement, with some possible minor modifications, could ever satisfy all forms of corporate organization. Yet the harsh reality is that most corporate situations would benefit greatly from addressing their unique requirements, as opposed to falling into the legal trap of utilizing a generic unanimous shareholders agreement.

There are about a half dozen primary variations of the corporate shareholding and operational objectives, and yet the basic premise tends to be that there is but a single base form of unanimous shareholders agreement. This is somewhat preposterous and in turn leads to all too many problems down the road. For the fact is that each of the primary variation of corporate shareholding and operations demands its own specific variant of a unanimous shareholders agreement, with individualized negotiation thereof, such that the corporate stakeholders (investors) are capable of realizing more from their investment in the company.

The harsh reality is that in using a generic / boilerplate shareholders agreement, whether obtained off of the Internet or drafted by a lawyer who fails to recognize the importance of skilled and customized drafting, is that the corporate stakeholders unknowingly are extremely vulnerable to tragic legal and financial consequences. And one of the more heart-wrenching facts in these tragic scenarios is that many of the shareholders had committed so much to the company's success, that when they are blind-sided by the inadequacy of their generic unanimous shareholders agreeement, the repurcussions can be quite devastating [hence the significance of attaining a properly prepared and customized unanimous shareholders' agreement].

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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