A Brief Introduction To Unanimous Shareholder Agreements

Background

Every corporation is governed by corporate legislation (such as the Business Corporations Act (Alberta)), articles of incorporation and by-laws. These documents cover the basic rules and procedures by which a corporation is governed. However, there may be instances where shareholders will want to agree on matters beyond the scope of the legislation and constating documents of the corporation. A shareholder agreement will allow shareholders to do this – it is an agreement in which the shareholders define their obligations between themselves and it governs shareholders' behavior in certain circumstances. A unanimous shareholder agreement ("USA") is a specific type of shareholder agreement that (i) is signed by all shareholders at the time it is first signed; (ii) binds future shareholders whether or not they sign; and (iii) removes, in whole or in part, the duties and powers from the directors of the corporation to the extent shareholders assume them.