LEGAL COUNSEL FOR SHAREHOLDERS AGREEMENTS
Shareholders agreements are absolutely essential to the long term success of any corporate enterprise that is owned by more than one individual. Yet, it is highly unfortunate that far too many companies either fail to have a unanimous shareholders agreement or have an agreement that is inadequate its ability to carry-out the shareholders' true intent. For a shareholders agreement needs to properly reflect the shareholders' current collective intention for the company's operations and exit strategies. Without such coherence in this legal document, the corporation will find itself facing significant legal turmoil in the future as most attempt to overcome the agreement's deficiencies, will creating unnecessary tension and animosity amongst the shareholders, in an often futile and costly effort to achieve some form of resolution, with which no one is almost ever happy with.
As such, it makes sense to retain experienced legal counsel and properly negotiated and execute your company's shareholders' agreement such that it conforms to your requirements, or is otherwise acceptable in light of what has been bargained for with your fellow shareholders and other parties having a stake in your business enterprise.
At Neufeld Legal P.C., we assist corporate shareholders in making the appropriate decisions with respect to the drafting and implementation of unanimous shareholders agreements. Contact us at by telephone at 416-887-9702 (Toronto area) / 403-400-4092 (Calgary) or via email at Chris@NeufeldLegal.com.
Relief by Court on the ground of oppression or unfairness
242(1) A complainant may apply to the Court for an order under this section.
(2) If, on an application under subsection (1), the Court is satisfied that in respect of a corporation or any of its affiliates
(a) any act or omission of the corporation or any of its affiliates effects a result,
(b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner, or
(c) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner
that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer, the Court may make an order to rectify the matters complained of.
(3) In connection with an application under this section, the Court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing, any or all of the following:
(a) an order restraining the conduct complained of;
(b) an order appointing a receiver or receiver‑manager;
(c) an order to regulate a corporationís affairs by amending the articles or bylaws;
(d) an order declaring that any amendment made to the articles or bylaws pursuant to clause (c) operates notwithstanding any unanimous shareholder agreement made before or after the date of the order, until the Court otherwise orders;
(e) an order directing an issue or exchange of securities;
(f) an order appointing directors in place of or in addition to all or any of the directors then in office;
(g) an order directing a corporation, subject to section 34(2), or any other person, to purchase securities of a security holder;
(h) an order directing a corporation or any other person to pay to a security holder any part of the money paid by the security holder for securities;
(i) an order directing a corporation, subject to section 43, to pay a dividend to its shareholders or a class of its shareholders;
(j) an order varying or setting aside a transaction or contract to which a corporation is a party and compensating the corporation or any other party to the transaction or contract;
(k) an order requiring a corporation, within a time specified by the Court, to produce to the Court or an interested person financial statements in the form required by section 155 or an accounting in any other form the Court may determine;
(l) an order compensating an aggrieved person;
(m) an order directing rectification of the registers or other records of a corporation under section 244;
(n) an order for the liquidation and dissolution of the corporation;
(o) an order directing an investigation under Part 18 to be made;
(p) an order requiring the trial of any issue;
(q) an order granting leave to the applicant to
(i) bring an action in the name and on behalf of the corporation or any of its subsidiaries, or
(ii) intervene in an action to which the corporation or any of its subsidiaries is a party, for the purpose of prosecuting, defending or discontinuing an action on behalf of the corporation or any of its subsidiaries.
(4) This section does not confer on the Court power to revoke a certificate of amalgamation.
(5) If an order made under this section directs an amendment of the articles or bylaws of a corporation, no other amendment to the articles or bylaws may be made without the consent of the Court, until the Court otherwise orders.
(6) If an order made under this section directs an amendment of the articles of a corporation, the directors shall send articles of reorganization in the prescribed form to the Registrar together with the documents required by sections 20 and 113, if applicable.
(7) A shareholder is not entitled to dissent under section 191 if an amendment to the articles is effected under this section.
(8) An applicant under this section may apply in the alternative under section 215(1)(a) for an order for the liquidation and dissolution of the corporation.