BC Business Corporations Act Unanimous Shareholders Agreement: A Brief Guide

When running a business, it`s essential to have an agreement in place between shareholders to ensure that everyone is on the same page regarding how the company is managed and decisions are made. One such agreement is a unanimous shareholders agreement (USA), which can be used to supplement the provisions of a corporation`s articles or bylaws.

In British Columbia, Canada, the Business Corporations Act (BCA) allows corporations to enter into a USA. A USA is a contract between all of the shareholders of a corporation that requires unanimous agreement before certain actions can be taken. The agreement can set out specific conditions that must be met before any decision can be made, such as a certain level of share ownership or a particular voting threshold.

Why do businesses need a USA?

A USA can provide certainty and stability for a corporation and its shareholders. It can establish clear guidelines for decision-making and prevent disputes over important matters, such as the sale of assets, changes to the corporation`s articles or bylaws, or the appointment or removal of directors.

Additionally, a USA can be used to protect minority shareholders by requiring unanimous consent before significant decisions are made. It can also prevent a majority shareholder from exerting too much control over the corporation and its assets.

What should a USA include?

A USA should be tailored to the specific needs and circumstances of each corporation and its shareholders. However, it should typically include provisions addressing the following areas:

– Decision-making: The agreement should outline the types of decisions that require unanimous consent and how those decisions will be made.

– Share transfers: The agreement should set out the circumstances under which a shareholder can sell or otherwise transfer their shares and any restrictions on those transfers.

– Buy-sell provisions: The agreement should include a mechanism for buying out a shareholder`s interest in the corporation if certain conditions are met, such as a voluntary or involuntary departure from the company.

– Dispute resolution: The agreement should provide for a process to resolve disputes between shareholders, such as mediation or arbitration.

In addition, a USA may include provisions relating to the operation of the corporation, such as restrictions on the corporation`s ability to borrow money or incur debt.

Getting help with a USA

Creating a USA requires careful consideration and drafting, and it`s important to have the assistance of a lawyer experienced in corporate law. A lawyer can help ensure that the agreement meets the requirements of the BCA and is tailored to the specific needs of the corporation and its shareholders.

In conclusion, a unanimous shareholders agreement can be a powerful tool for protecting the interests of shareholders in a corporation. By setting out clear guidelines for decision-making and other important matters, a USA can provide stability and certainty for the corporation and its shareholders. If you`re considering a USA for your business, consult with a lawyer to ensure that the agreement meets your needs and complies with BC`s Business Corporations Act.