Buyout provisions valuable to retain control of shares
A shareholders’ agreement should almost invariably deal with buyouts as a way to control who owns shares in the event of certain circumstances, Toronto business lawyer Anton Katz tells AdvocateDaily.com.
“Buyout provisions are valuable for all sorts of reasons,” says Katz, principal of Anton M. Katz Barrister & Solicitor. “A shareholders’ agreement can be utilized to effect a buyout of a person’s shares in certain defined circumstances. It can reserve to the corporation or the other shareholders either a right or an obligation to buy out shares.”
That right or obligation can exist in certain circumstances and can arise in situations that are either voluntary or involuntary, he says. Common involuntary events include death, disability, insolvency and marital breakdown.
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