A shareholders' agreement is an important component in the legal organization of a business corporation (recognized as a "private issuer") that has more than one shareholder. For example, it allows shareholders to determine the rules governing the relationship between them as well as the exercising of any rights and privileges attached to their shares.

There are three types of shareholder agreements, namely: 1) one that only sets out the procedure for acquiring and selling shares between the shareholders, such as following a death or otherwise, 2) a unanimous shareholder agreement (this template and B02500) that also contains provisions governing the shareholders, (contributions, non-compete and non-solicitation undertakings) and the withdrawal of a shareholder, governing the corporation and limiting the powers of the directors, and 3) a shareholder agreement (template B02560) that contains all the provisions of the first two kinds, except for the restrictions on the powers of the directors.

In sum, a unanimous shareholder agreement differs from a shareholder agreement in that a unanimous shareholder agreement must absolutely limit or remove the powers of the directors and, to be valid, it must be signed by all the shareholders (with or without voting rights) of the corporation. It also binds any future shareholders, on condition that they are informed of its existence. Lastly, a unanimous shareholder agreement will be considered unanimous, regardless of whether the word "unanimous" appears in the title.

This short form version of the unanimous shareholder agreement (see template B02500 for the long form version) can be used by any SME with more than two shareholders who wish to sign an agreement. Despite its narrower scope, our simplified version contains all the important terms to properly govern the rights of the shareholders.

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Activities
0.01.02 Agreement
0.01.03 Book Value
0.01.04 Breach
0.01.05 Confidential Information
0.01.06 Control
0.01.07 Death
0.01.08 Depositary
0.01.09 Disability
0.01.10 Encumber or Encumbrance
0.01.11 Incorporating Act
0.01.12 Intellectual Property
0.01.13 Legal Representatives
0.01.14 Loss
0.01.15 Ordinary Resolution
0.01.16 Prime Rate
0.01.17 SHAREHOLDER
0.01.18 Shareholder-Employee
0.01.19 Shares
0.01.20 Special Resolution
0.02 Entire Agreement
0.03 Applicable Law
0.04 Unanimous Shareholder Agreement
0.05 Non-Compliance
0.05.01 Severability
0.05.02 Substitute Provision
0.06 Miscellaneous
0.06.01 Cumulative Rights
0.06.02 No Waiver
0.06.03 Time Limits
0.06.04 Accounting Standards
1.00 CONSTITUTION OF CORPORATION
2.00 GOVERNANCE OF CORPORATION
2.01 Transfer of Powers
2.02 Board of Directors
2.03 Officers
3.00 RULES GOVERNING SHAREHOLDERS
3.01 Powers of SHAREHOLDERS
3.01.01 Unanimous Vote
3.01.02 Special Majority
3.02 Pre-emptive Right
3.02.01 Issuance
3.02.02 Exception
3.02.03 Procedure
3.02.04 Partially Exercised
3.03 Continuous Disclosure to SHAREHOLDERS
3.04 Adhesion to Agreement
3.05 Contribution in Time
3.06 Capital Contributions
3.06.01 Cash Calls
a) General Rule
b) Default by a SHAREHOLDER
c) Security or Suretyship
3.06.02 Withdrawal of Contributions
3.07 Profit-Sharing
3.08 Exercising Voting Rights
3.09 Conflicts of Interest
3.10 Limit to Holdings (only if 3.01.01 c) applies)
3.11 Encumbrances
3.12 Transfer of Shares
3.12.01 Authorization Required
3.12.02 Share Certificates
4.00 DUTIES AND OBLIGATIONS OF SHAREHOLDERS
4.01 Confidential Information
4.01.01 Undertaking
4.01.02 Duration of Undertaking
4.01.03 End of Agreement
a) Request for Return
b) Destruction
4.01.04 Penalty
4.02 Intellectual Property
4.03 Indemnification
4.03.01 Scope
4.03.02 Procedure
4.04 Non-Competition
4.04.01 Undertaking
a) Definition
b) Scope
4.04.02 Breach of Undertaking
a) Penalty
b) Payment
c) Protective Measures
4.04.03 Reasonableness of Clause
4.07 Further Assurances
5.00 WITHDRAWAL OF A SHAREHOLDER
5.01 Voluntary Withdrawal
5.01.01 Application
5.01.02 Option to Purchase
a) Notice
b) Consideration
c) Proportion
d) Response
5.01.03 Condition Precedent
5.01.04 Refusal
5.01.05 Closing
5.01.06 Terms of Payment
a) General
b) Payment of Consideration
c) Interest
d) Expiry of Due Date
e) Forfeiture of Term
f) Shares in Escrow
g) Promissory Note
h) Solidary Liability
5.02 Forced Withdrawal
5.02.01 Application
5.02.02 Triggering Events
5.02.03 Option to Purchase
a) Entirety of Shares
b) Proportion
c) Time Limit
5.02.04 Applicable Rules
a) Deemed Sale
b) Authorization
5.02.05 Calculating Start Dates
a) Bankruptcy, Incapacity and Seizure
b) Criminal Sentence
c) Resignation, Withdrawal or Dismissal
d) Absentee SHAREHOLDER
e) Change in Control and Competition
f) Disability
5.02.06 Closing
5.02.07 Sale Price
5.02.08 Terms of Payment
a) Consideration
b) Other Terms
5.03 Dispute ("Shotgun" Procedure)
5.03.01 Application
5.03.02 Procedure
a) Definition
b) Offer to Purchase
c) Restrictions on Time Limits
5.03.03 Financial Guarantees
a) Definition
b) Letter of Credit
c) Proof of Release
d) Rejection of Offer
5.03.04 Time Limit
5.03.05 Deemed Acceptance
5.03.06 Closing
5.03.07 Rejection of the Offer
a) Presumption of Purchase
b) Pricing and Terms
c) Proportion
5.03.08 Penalty
5.03.09 End of Dispute
5.04 Conditions Relating to a Sale
5.04.01 Application of Agreement
5.04.02 Release, Discharge and Indemnification
5.05 Pre-Authorized Transfers
5.05.01 Personal Holding Corporation
a) Entering into Agreement
b) Control
6.00 TAKE-OVER BID
6.01 Undertaking
6.01.01 Control
6.01.02 Required Content
6.02 Procedure
6.02.01 Application
6.02.02 Notice of Acceptance and Disclosure of Offer
6.02.03 Options of Minority Shareholders
6.02.04 Notice to Depositary
7.00 DEATH OF A SHAREHOLDER
7.01 Procedure
7.01.01 Application
7.01.02 Sale Subject to Condition Precedent
a) Deemed Sale
b) Proportion
c) Completion of Sale
7.02 Terms of Payment
7.02.01 General
7.02.02 Initial Instalment
a) Sufficiency of Insurance Proceeds
b) Insufficiency of Insurance Proceeds
c) Declaration of Dividend
d) Allocation and Tax Election
e) No Insurance Proceeds
7.02.03 Balance
7.02.04 Interest
7.02.05 Expiry of Due Date
7.02.06 Prepayment
7.02.07 Forfeiture of Term
7.03 Protection
7.03.01 Shares Placed in Escrow
7.03.02 Repayment and Release and Discharge
7.03.03 Promissory Note
7.03.04 Solidary Liability
7.04 Further Assurances
7.05 Acquisition of Shares
7.05.01 Conditions
7.05.02 Value
7.05.03 Capital Dividend Account
7.05.04 Personal Guarantee
7.05.05 Terms of Payment
7.05.06 Default by CORPORATION
8.00 VALUATION OF SHARES
8.01 General Rule
8.01.01 Sale Upon Death
8.01.02 Voluntary Withdrawal
8.01.03 Forced Withdrawal
8.02 Initial Value
8.03 Current Value
8.03.01 Reassessment by SHAREHOLDERS
8.03.02 Dissent
8.04 Alternative Valuation
8.05 Prohibition
8.06 Administrative Reassessment
8.06.01 Liability
8.06.02 Options
9.00 FINANCING
9.01 Life Insurance
9.01.01 Undertaking
9.01.02 Consent of SHAREHOLDERS
9.02 Obligations Regarding Premiums
10.00 DEPOSITARY
10.01 Appointment
10.02 Remuneration
10.03 Changing Depositary
10.03.01 Resignation
10.03.02 Removal
10.03.03 Replacement
11.00 SPECIAL PROVISIONS
11.01 Assignment
11.01.01 Prohibition
11.01.02 Effect of Breach
12.00 GENERAL PROVISIONS
12.01 Notices
12.02 Dispute Resolution
12.02.01 Written Notice and Meeting
12.02.02 Mediation
12.02.03 Arbitration [OR Legal Proceeding]
12.03 Choice of Forum
12.04 Counterparts
12.05 Amendment
12.06 No Waiver of Rights
12.07 Language
13.00 TERMINATION
14.00 EFFECTIVE DATE
15.00 DURATION
16.00 SCOPE

SCHEDULE 3.07 – EMPLOYMENT INCOME OF SHAREHOLDER-EMPLOYEES
SCHEDULE 4.04.01 – NON-COMPETITION - TERRITORY
SCHEDULE 8.01.01 – VALUATION OF SHARES - SALE UPON DEATH
SCHEDULE 8.01.02 – VALUATION OF SHARES - VOLUNTARY WITHDRAWAL
SCHEDULE 8.01.03 – VALUATION OF SHARES - FORCED WITHDRAWAL
SCHEDULE 9.01.01 – LIFE INSURANCE POLICIES
SCHEDULE 10.01 – DECLARATION OF DEPOSITARY