Best time to draft shareholders’ agreement is during incorporation

Timing is of the essence when it comes to drafting a shareholders’ agreement as deferring it may later put a corporation at risk of uncertain and costly litigation, Toronto business lawyer Anton Katz tells

He advises clients to have a shareholders’ agreement drafted at the same time they are incorporating their business — while things are fresh and before issues can emerge.

“On the day you incorporate, you can contemporaneously execute your shareholders’ agreement as a package deal,” says Katz, principal of Anton M. Katz Barrister & Solicitor. “The benefit of doing it this way is that you go through the checklist: What are the fundamental decisions partners need to agree on? What happens if a partner wants to exit the corporation either voluntarily or involuntarily?

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