If you have a business with a few shareholders, you may have a Shareholders’ Agreement in place. This forms part of your estate planning whether you like it or not. A Shareholder’s Agreement is most commonly used where there are multiple, unrelated shareholders. It addresses governance and division of profits of course, but it may (and should) also address what happens if one shareholder passes away.
Is there a buyback of that shareholder’s shares upon death which allows the family members to receive cash for the shares? That way, the remaining shareholders maintain control over who is a shareholder – they may not want to suddenly be running a business with the late shareholder’s estranged brother, for example.
A Shareholders’ Agreement is a very important component of any business owner’s succession plan.
This is provided as information ONLY; it should NOT be construed as legal advice. You should consult with a lawyer to provide you with specific advice for your own situation. For more information on estate planning/incapacity planning and to discuss your specific circumstances, please contact Vanessa DeDominicis on 250-869-1140 or [email protected]. Vanessa practices in the area of Wills and Estates at Pushor Mitchell LLP in Kelowna.
