Recent Developments Impacting Unanimous Shareholder Agreements In Ontario

Unanimous shareholders agreements (USAs) are an important mechanism for establishing governance arrangements among shareholders for private companies in Ontario and most other Canadian jurisdictions. USAs are critically important to the ability of majority shareholders, such as private equity sponsors, to exercise control over the management of corporations in an efficient and practical manner. Conversely, USAs can establish and safeguard the rights of the minority shareholders. Two recent decisions of the Ontario Court of Appeal provide important guidance on how certain common USA provisions could be interpreted when majority and minority interests diverge.

Waiver of statutory minority shareholder protections