Pre-Shareholder’s Agreement Invaluable Discussion Points

The Shareholder’s Agreement is as important a future road map for the Family Business as a Will is for any adult. Like driving in the Alps without GPS one never knows when both may be relied upon. Surprisingly those with either are in the vast minority.

Below are some principles of common sense to be discussed prior to the actual Agreement drafting process:

– “why” are you together in this business and what is your end game?
– what is your time frame?
– strengths & weaknesses of each partner?
– partner’s contributions to financing the business
– what other partner contributions anticipated?
– do all partners contribute to business operations?
– agree partner decision making process
– agree process to handle disagreements
– agree profit distribution methodology
Excerpted with acknowledgement and appreciation from Phil Thompson, Business Lawyer and Corporate Counsel.

Brian Etherington is the Chairman at Etherington Generations; a risk management firm that specializes in family life insurance and estate planning. He was appointed a Member of the Order of Canada in 2004 and a recipient of The Queen’s Golden Jubilee Medal in 2002 for community service, as well as The Queen’s Diamond Jubilee Medal in 2012. He is a Founding Chair of the Special Olympics Canada Foundation  and a chair on the advisory council for the 2019 International Youth Games presented by Special Olympics Ontario.