Shareholders Agreement Lawyer in Montreal, Quebec

Amar Legal Inc. is a Montréal business law firm that drafts and reviews shareholders agreements for founders, start-ups, family businesses and small and mid-sized companies across Quebec. A good shareholders agreement settles, before there is a problem, who controls the company, how shares can be sold, what happens when a shareholder leaves, and how disagreements are resolved.

What a shareholders agreement covers

Your articles and by-laws set the basic rules of the corporation. The shareholders agreement adds the rules that matter between the owners. A typical agreement for a Montréal company covers:

• Who sits on the board and which decisions need the approval of all or most shareholders
• Restrictions on selling or transferring shares, and rights of first refusal
• What happens if a shareholder leaves, retires, becomes disabled or dies
• How shares are valued and paid for when they change hands
• Non-competition, non-solicitation and confidentiality
• Funding the company: who puts in more money, and on what terms
• How disputes between shareholders are resolved

Founder agreements for start-ups

For start-ups, the shareholders agreement is where the founders protect the company and each other. We draft vesting so that shares are earned over time, set out what happens to a departing founder’s shares, confirm that the intellectual property belongs to the company, and define each founder’s role and decision-making power.

We also keep future investors in mind. Investors will read your shareholders agreement during due diligence, and clean founder terms make that process faster. If you are incorporating at the same time, see our incorporation lawyer page.

Unanimous shareholder agreements in Quebec

Both the Quebec and the federal corporate statutes allow a unanimous shareholder agreement, signed by all shareholders, that can take powers away from the directors and give them to the shareholders. This is common in owner-managed companies where the shareholders and the directors are the same people.

A unanimous shareholder agreement has real legal consequences, including on who is responsible for the decisions it covers. We explain when it makes sense for your company and how to draft it so it does what you intend.

Buy-sell, shotgun, drag-along and tag-along clauses

Exit clauses are the part of a shareholders agreement that people only read when they need them, so they must be clear and workable.

• Buy-sell clauses set when a shareholder must sell or may be bought out, for example on death, disability or departure, and how the price is set.
• A shotgun clause lets one shareholder offer a price for the other’s shares; the other must either sell at that price or buy at the same price.
• Drag-along rights let a majority require minority shareholders to sell on the same terms when the company is sold.
• Tag-along rights let minority shareholders join a sale on the same terms as the majority.

We tailor these clauses to the size of each shareholder’s stake and to how realistic each exit route is for your business.

Shareholders agreements for family businesses and holding companies

In family businesses, the shareholders agreement often decides how the company passes from one generation to the next. We draft clauses on who can own shares, what happens on divorce or death, how family members who work in the business are treated compared with those who do not, and how a parent gradually hands over control.

Where shares are held through holding companies, the agreement must also cover the shareholders of those holding companies, so that a change of control one level up does not get around the rules. We coordinate these points with your accountant and, where needed, your estate planning advisers.

Common mistakes we fix in shareholders agreements

• Using a template from another province that does not reflect Quebec law
• No clear valuation method, so a buyout turns into a fight over the price
• A shotgun clause between shareholders who could never afford to buy each other out
• No rules for a founder who stops working in the business but keeps their shares
• Insurance-funded buyouts where the insurance was never put in place
• Agreements that were never updated after new shareholders came in

Each of these is cheaper to fix in a review than in a dispute.

When to sign a shareholders agreement

The best time is at incorporation, or as soon as there is more than one shareholder. Agreeing on exit terms is far easier while everyone is getting along. Other good moments are when a new investor, partner or key employee comes in, when a shareholder plans to retire, or before a family business passes to the next generation.

Cost and timeline

The cost of a shareholders agreement depends on the number of shareholders, how much negotiation is needed and how many special clauses you need. A simple agreement between two founders takes less work than an agreement with investors and several share classes. We explain the cost before we start.

Most of the time goes into the discussions between shareholders. Once the terms are agreed, we prepare the draft, go through it with you, and finalize it for signature.

Updating an agreement or resolving a dispute

An agreement signed years ago may no longer fit: new shareholders, a different business, or valuation rules that no longer make sense. We review existing agreements and update them.

When shareholders disagree, the agreement is the first place we look. We help you understand your rights under the agreement and the law, and we work toward a negotiated solution, such as a buyout, before a dispute becomes litigation.

Why businesses choose Amar Legal

• Business and real estate focus. Founder Gabriel Amar (B.C.L./LL.B., McGill University; Quebec Bar, 2018) previously served as legal counsel and strategic advisor to one of the largest private real estate organizations in Canada.
• A team that covers the whole business. Lawyers Kelsey Solomon and Nicoletta Saviolidis (Quebec Bar, 2021) advise on commercial leasing, acquisitions, dispositions and real estate financing.
• Who we work with. Start-ups, entrepreneurs, small and mid-sized businesses, real estate investors, hotel operators and family offices.
• Quick and reachable. We generally respond within one business day, in English or French.

Frequently asked questions

Related services

• Incorporation lawyer in Montreal
• Business lawyer for new and growing companies
• Commercial lease lawyer in Montreal