Shotgun Buy-Sell Provisions for Shareholder Agreement

Prepare a Shotgun Buy-Sell Provision for a shareholder agreement with this ready-made template.

  • The shotgun provision gives a shareholder the right to offer to purchase the shares held by the other shareholders at a specified price. If they do not accept the offer, the offering party must sell its shareholdings to the remaining shareholders.
  • These buy-sell provisions set out:
    • the procedure to be followed by a shareholder when making an offer to purchase the other shareholders' interests,
    • the terms on which any offer to purchase or offer to sell must be made,
    • the rights and remedies available to the non-defaulting party upon default by either the purchaser or the seller.
  • This template is available as a downloadable MS Word file.
Document Type: Microsoft Word
Last Updated: 29-October-2024
SKU: 198
$6.29
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British Columbia Shareholder Buy-Sell Agreement

Set out in writing how the shares of a departing or deceased shareholder in a BC company will be dealt with in this Shareholder Buy-Sell Agreement.

  • This Buy-Sell Agreement is for a corporation with two equal shareholders.
  • The template includes provision for a mandatory (shotgun) buy-sell notice from a departing shareholder to the remaining shareholder.
  • If a shareholder dies, the surviving shareholder must purchase the interest of the deceased shareholder.
  • Each shareholder holds life insurance policies on the other shareholder. The insurance proceeds may be applied to the purchase of the deceased's shares by the survivor.
  • Available in MS Word format.
  • Intended to be used only in the Province of British Columbia, Canada.
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Picture of Shareholder Agreement with Put Option | Canada

Shareholder Agreement with Put Option | Canada

A Shareholder Agreement protects the interests of a corporation's shareholders and minimizes the risks of share ownership. This Canadian template contains a buy-sell or "put" option.

  • This is a Canadian legal form which can be used anywhere in Canada except Quebec.
  • The Shareholder Agreement establishes the obligations of the shareholders and the corporation to each other, and sets out any restrictions on share transfers or the issue of new shares.
  • The remaining shareholders have a right of first refusal to acquire the shares of a departing shareholder, before the shares can be offered to a third party.
  • A departing shareholder also has a buy-sell or 'put' option, which would require the remaining shareholders to purchase his/her shares. The put option is available only after the departing shareholder has been unsuccessful in finding a third party purchaser for a period of 6 months.
  • The template contains buy-sell options for both an assured buy-out and a mandatory or 'shotgun' buy-sell.
  • If a shareholder dies, the surviving shareholders have the option to buy the deceased shareholder's shares, failing which they must be purchased by the corporation.
  • The Shareholder Agreement can serve to avoid unnecessary conflict by having the owners agree on management issues and exit strategies at the outset.
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Picture of Shotgun Clauses and Owner Managers

Shotgun Clauses and Owner Managers

Should your company shareholder agreement include a shotgun clause? Learn more about these provisions from an owner-manager's perspective, with this introductory article entitled "Shotgun Clauses & Owner Managers".

  • A 'shotgun clause' or 'buy-sell clause' is a provision in the agreement that states if a shareholder wants out of the company, he/she can force the other shareholders to buy his/her shares.
  • This article discusses the benefits and pitfalls of shotgun clauses, and the situations in which they work best.
  • The author is an Ontario lawyer, with expertise in buy-sell agreements and other shareholder issues.
Shotgun Clauses and Owner Managers is provided in PDF format and is copyrighted by the author.
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Picture of Triggering Events for Share Sales in Shareholder Agreements

Triggering Events for Share Sales in Shareholder Agreements

Learn about the types of events which trigger a sale of shares under a Unanimous Shareholder Agreement, and the methods used to implement the sale.

  • Triggering events include:
    • right of first refusal;
    • default buy-sell;
    • shotgun or forced sale;
    • transfer on death.
  • Available as a PDF download.
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Buy-Sell Provisions for Shareholder Agreement

These optional buy-sell provisions can be inserted into a Shareholder Agreement to provide for the purchase and sale of shares among the shareholders of a company.

  • The remaining shareholders have right of first refusal to purchase a departing shareholder's shares.
  • Any buy-sell offers made during the notice period are irrevocable.
  • The purchase price must be paid in full on closing.
  • These Shareholder Agreement Buy-Sell Provisions are generic (not country-specific) and can be used in many jurisdictions.
  • Available as a downloadable MS Word file.
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Make provision for determining the fair market value of shares with this downloadable Valuation of Shares clause for a Shareholder Agreement.

  • The clause sets out the process by which the fair market value (FMV) of the shares will be arrived at in the event that the shareholders cannot agree, following a triggering event which has affected the FMV of the shares.
  • This form is provided in MS Word format and is fully editable.
  • This clause is generic (not country-specific) and can be used in many jurisdictions.
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Right of First Refusal Clause for Shareholder Agreement

This Right of First Refusal clause can be inserted into a Shareholder Agreement to govern how a shareholder disposes of its shares.

  • If a shareholder receives an arm's length offer from a third party to purchase its shares, the selling shareholder must give the other shareholders a right of first refusal to buy the shares before selling them to the third party.
  • The clauses are downloadable and customizable.
  • These generic clauses can be used in any common law country.
  • Available in MS Word format.
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Share Repurchase / Buy-Back Agreement

Use this downloadable Share Repurchase (or Buy-Back) Agreement to transfer shares from a shareholder back to the corporation.

  • The Agreement is secured by a promissory note, and the template includes a sample form of promissory note.
  • The corporation will cancel the shares after buying them back.
  • The vendor represents that the shares are free of encumbrances and security interests against them.
  • Both parties agree to take all actions necessary to complete the transaction.
  • The Share Repurchase Agreement allows the corporation to reduce the number of outstanding shares and retain share value.
  • This is a generic legal form which can be used in many jurisdictions. Available in MS Word format.
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Drag Along, Tag Along Clause for Shareholder Agreement

This drag along, tag along clause can be inserted into a shareholder agreement to govern how the sale of shares from a shareholder to an arm's length third party must be conducted.

  • The share purchase agreement must include an offer by the buyer to purchase a pro rata share of the other shareholders' shares on the same terms and at the same time.
  • The terms apply to arm's length transactions only. The clause contains a definition of which parties are not considered arm's length.
  • A Drag Along, Tag Along Clause is an exit strategy that protects the rights of minority shareholders while at the same time giving majority shareholders a means to force other investors to exit at the same time.
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