You are probably familiar with the term “unanimous shareholders` agreement.” But you may get the impression that this is simply an alternative version of the term “shareholders` agreement.” Far from it, it is a completely different type of instrument. As with other standard provisions, the shareholders` agreement may provide that such transfer restrictions are available to all shareholders of the Corporation or are limited to a certain subset of shareholders. Unanimous shareholder agreements for your company can be established when the need arises. It`s a good idea to make a list of the terms you want to cover in your shareholders` agreement before your lawyer drafts the unanimous shareholder agreement. It is important to receive feedback from all shareholders of the company, as they must sign the unanimous shareholder agreement. Under the Canada Business Corporations Act (CRA), “a unanimous (United States) shareholders` agreement is an agreement that applies to all shareholders of a corporation and limits the powers of directors to manage or supervise the management of the business and affairs of the corporation.” This differs from standard Canadian corporate charters, which require that a company`s default position be fully managed by its directors and officers. All shareholders must agree to enter the United States. You should also note that the existence of a United States must be notified to the Registraire des entreprises du Québec (the “Registraire”). If all the powers of the directors are withdrawn, the names and addresses of the shareholders must be recorded in the corporation`s protocol book, which must be registered with the Registrar instead of the directors.
The use of a U.S. has some drawbacks that were part of the government`s recommendations to amend the Companies Act. It is therefore important to use the U.S. with caution when shareholders might fear assuming liability that might otherwise be associated with directors. An obvious limitation is that a “unanimous shareholders` agreement” can only be used with the consent of all shareholders. Another limitation, less obvious, but important for directors to recognize, is that a “United States” offers protection only in terms of liability under the law. It is unlikely to offer protection against other types of claims against directors, as they result from tax legislation. Shareholders considering a U.S. should consider existing insurance coverage. That the shareholders who have assumed the rights, powers and duties of the directors, see Example: ABC Corporation owns X, Y and Z. X holds 80% of the voting shares, while Y and Z each hold 10%.
The Board of Directors consists exclusively of X. In order to prevent X from being able to take all business decisions, in particular those of particular interest to Y and Z, it may be agreed to deprive the Board of Directors of the power to take these latter decisions and to submit them to the affirmative vote of at least 95% of the shareholders. Y and Z therefore have the right to vote on decisions that do not otherwise require their consent and may prevent the adoption of such a decision with which they may disagree. What are the company`s future financing plans? Are shareholders obliged to provide additional capital by acquiring additional shares or lending money to the company? If this is the case, the shareholders` agreement may specify these obligations and the processes by which additional capital may be raised. A “unanimous shareholders` agreement” is a tool that allows you to assume the powers, duties and responsibilities of the shareholders` directors, either in general, or in relation to certain shares, or even for a certain period of time. This completely new and very practical concept is commonly referred to as the “United States”. A United States can be used to protect directors from personal liability in appropriate situations. In this way, the Companies Act legally recognizes the fact that responsibility must correspond to authority. In so far as the German Law on Joint Stock Companies allows the delegation of power to take decisions of the Company from the directors to the shareholders, it therefore provides that responsibility for the consequences of those decisions is also transferred from the directors to the shareholders. In sole proprietorships (which are now permitted by the Companies Act), a corresponding written declaration from the individual shareholder is considered a United States. If a shareholder holds majority stakes in a company, it is important to consolidate in a contract the decisions that do not have to be taken by a simple majority. According to Toronto-based boutique law firm Wakulat Dhirani, LLP, a company`s U.S.
can “identify a category of important decisions that require overwhelming and/or unanimous shareholder approval to ensure that the majority shareholder is unable to make unilateral decisions without first seeking the consent of other relevant stakeholders.” Voting and quorum thresholds for meetings of directors and shareholders are standard provisions generally contained in a shareholders` agreement. When setting the appropriate thresholds, it is important to take into account some practical considerations. For example, should all directors be required to attend a meeting of directors so that a quorum can be properly constituted? A simple majority of directors may be preferable if directors are geographically located in different jurisdictions or if there are other challenges that may prevent the regular participation of all directors […].