What would happen to your business if one of the owners dies or can no longer continue? Ensure continuity of ownership and management with this Shareholder Buy-Sell Agreement for Canada, between the corporation and the shareholders.

Under this Agreement, the corporation holds life insurance policies on each of the shareholders and uses the proceeds to redeem and acquire its own shares from a deceased shareholder's estate. Upon the death of a shareholder, the surviving shareholders can purchase the deceased's shares on a pro rata basis (proportionate to their current shareholdings) by issuing the corporation a promissory note for the purchase price, and the corporation loans the purchaser the amount of the purchase price from the insurance proceeds, and makes an election for a deemed dividend to be paid from the capital dividend account if possible.

This is a Canadian legal document in MS word format, pursuant to the Income Tax Act (Canada).