Incorporation & Corporate

Shareholder Agreement

Also called: SHA, Founders Agreement

A contract among shareholders setting out how they will run the company and what happens if someone leaves.

A shareholder agreement typically addresses board composition, which decisions need approval and by what majority, restrictions on transferring shares, what happens on death or departure, and how a deadlock is broken. It sits alongside the articles and bylaws rather than replacing them.

Why it matters: most serious founder disputes are not about whether a rule was fair, but about the absence of any agreed rule. Negotiating these terms while everyone is still on good terms is far cheaper than litigating them later.

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Shareholder Agreement — Canadian legal glossary | Lawkin — Lawkin