Covenant to be Bound by Shareholders Agreement - Transferor Remains Bound (Canada)
Consent by new shareholder to be bound by Shareholders Agreement for use in all provinces except Quebec.
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This form is a covenant whereby a new shareholder of a corporation (generally the recepient of transfered stock) agrees to be bound by the terms and conditions of a Shareholders Agreement between the existing shareholders. The existing shareholder who is transferring the shares to the new shareholder remains bound by the obligations under Shareholders Agreement (typically because he has not transferred all of his shares).
This form includes special formatting features to assist you in completing the agreement.
This form can be used in the following provinces: Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Saskatchewan and Yukon.
Covenant to be Bound by Shareholders Agreement - Transferor Remains Bound (Canada)
Product Details
| Product | Covenant to be Bound by Shareholders Agreement - Transferor Remains Bound (Canada) |
| Country | Canada |
| Pages | 5 |
| Dimensions | Designed for Letter Size (8.5" x 11") |
| Printer compatibility | Designed to print on all ink-jet and laser printers |
| Editable | Yes (.doc, .wpd and .rtf) |
| Format |
Microsoft Word |
| Platform |
Windows Compatible Mac Compatible Linux Compatible |
| Availability | In Stock. Instant Download |
| Usage | Unlimited number of prints |
| Category | Shareholder Agreements |
| Product number | #28387 |
| Download time | Less than 1 minute (approx.) |
| Document Access |
Via secret online address Email with download links Email with attachment upon request |
| Refund Policy | 60 days, no-questions asked, 100% money back guarantee |
Frequently Asked Questions
This covenant is a legal document that ensures a new shareholder agrees to be bound by the terms of an existing Shareholders Agreement. It is crucial for maintaining the rights and obligations of all shareholders involved.
Typically, the new shareholder receiving the transferred shares must sign this form. Additionally, the existing shareholder transferring the shares may also need to reaffirm their obligations under the Shareholders Agreement.
No, this form is specifically designed for use in all Canadian provinces except Quebec. Different legal requirements may apply in Quebec, necessitating a separate agreement.
If the new shareholder does not agree to be bound by the Shareholders Agreement, the transfer of shares may not proceed. This could lead to complications and potential disputes among existing shareholders.
This form is generally applicable to most corporations, but it is advisable to consult legal counsel to ensure it meets the specific needs and requirements of the corporation in question.
Is This Form Right For You?
Use This Form If:
- Individuals who are acquiring shares in a corporation may need this form to ensure they are legally bound by the existing Shareholders Agreement. This protects the interests of all shareholders and maintains the integrity of the agreement.
- Situations requiring a shareholder to transfer shares often necessitate this covenant to ensure that the new shareholder agrees to the same terms as the original shareholders. This is crucial for maintaining consistency in shareholder obligations and rights.
- To comply with corporate governance standards, companies may require new shareholders to sign this agreement as part of the share transfer process. This ensures that all parties are aware of and agree to the existing terms governing the corporation.
- For those involved in a merger or acquisition, this form can be essential to confirm that all new shareholders are bound by the existing agreements. It helps to streamline the transition and avoid potential disputes among shareholders.
- In cases where a shareholder retains some shares while transferring others, this form is necessary to clarify that the transferring shareholder remains bound by the Shareholders Agreement. This ensures ongoing compliance with the agreement's terms.
Do Not Use If:
- – This form is not appropriate if the corporation does not have a Shareholders Agreement in place. Without an existing agreement, there are no terms for the new shareholder to agree to.
- – If the new shareholder is not acquiring shares but rather is being granted stock options or other equity incentives, this form would not be suitable. Different documentation is required for such scenarios.
- – In situations where the transfer of shares is between shareholders who are not bound by any agreement, this form would not apply. It is specifically designed for cases where a Shareholders Agreement exists.
- – This form should not be used if the transfer of shares is subject to specific regulatory approvals or conditions that require additional documentation. Legal counsel should be consulted in such cases.
- – If the new shareholder is a corporation or entity rather than an individual, different legal considerations may apply, making this form inappropriate.
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