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.
Derivative Actions - shareholders
Commencing derivative action
240(1) Subject to subsection (2), a complainant may apply to the Court for leave to
(a) bring an action in the name and on behalf of a corporation or any of its subsidiaries, or
(b) intervene in an action to which a corporation or any of its subsidiaries is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the corporation or subsidiary.
(2) No leave may be granted under subsection (1) unless the Court is satisfied that
(a) the complainant has given reasonable notice to the directors of the corporation or its subsidiary of the complainantís intention to apply to the Court under subsection (1) if the directors of the corporation or its subsidiary do not bring, diligently prosecute, defend or discontinue the action,
(b) the complainant is acting in good faith, and
(c) it appears to be in the interests of the corporation or its subsidiary that the action be brought, prosecuted, defended or discontinued.
(3) Notwithstanding subsection (2), when all the directors of the corporation or its subsidiary have been named as defendants, notice to the directors under subsection (2)(a) of the complainantís intention to apply to the Court is not required.
Powers of the Court
241 In connection with an action brought or intervened in under section 240 or 242(3)(q), the Court may at any time make any order it thinks fit including, without limiting the generality of the foregoing, any or all of the following:
(a) an order authorizing the complainant or any other person to control the conduct of the action;
(b) an order giving directions for the conduct of the action;
(c) an order directing that any amount adjudged payable by a defendant in the action shall be paid, in whole or in part, directly to former and present security holders of the corporation or its subsidiary instead of to the corporation or its subsidiary;
(d) an order requiring the corporation or its subsidiary to pay reasonable legal fees incurred by the complainant in connection with the action.