If you have a business with a few shareholders, you may have a Shareholders’ Agreement in place. This forms part of your estate planning whether you like it or not. A Shareholder’s Agreement is most commonly used where there are multiple, unrelated shareholders. It addresses governance and division of profits of course, but it may (and should) also address what happens if one shareholder passes away.
Is there a buyback of that shareholder’s shares upon death which allows the family members to receive cash for the shares? That way, the remaining shareholders maintain control over who is a shareholder – they may not want to suddenly be running a business with the late shareholder’s estranged brother, for example.
A Shareholders’ Agreement is a very important component of any business owner’s succession plan.
By Vanessa Dedominicis, Pushor Mitchell
- To what extent can the special provisions of an Ontario non-profit charitable organization be used to give another group approval rights? - April 26, 2024
- CRA recently updated their Basic Guidelines Checklist for registered charities - March 5, 2024
- The burden of care: Addressing challenges in employment in the nonprofit sector – new report by Steven Ayer on Charity/NPO sector employment - February 2, 2024