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
- Budget Implementation Act passed allowing certain additional charitable partnerships - July 21, 2022
- What should charities do if they find out that a board member donated to the Freedom Convoy? - March 18, 2022
- Accepting cryptocurrency for donations or payments can be quite risky for Canadian charities unless you know what you are doing - February 23, 2022
