Category Archives: Shareholders

Legal comment, news and articles relating to recent important developments and Canadian court decisions relating to Shareholders.

Shareholder Agreement – Oppression

Does the Shareholder Agreement exhaust “reasonable expectations of a shareholder”? In a number of oppression cases one or both parties point to the Shareholder Agreement as the source or fountain of shareholder expectations. This issue arises in a current case where Ron represents a former shareholder who was excluded from the board contrary to the assumptions, but not the terms, underlying the Shareholder Agreement at the time it was made.

Enforcement of Restrictive Covenants – Non-Compete – Non-Solicit

When are restrictive covenants enforceable? We have been engaged to give an opinion on the enforceability of restrictive covenants (non-competition and non-solicitation) in the context of the sale by one shareholder of a business to remaining shareholders. To be effective, these clauses have to be reasonable in terms of scope, duration and geography. Different considerations apply in the context of the sale of a business than those pertaining to an employment contract. Regardless of scope, however, to be upheld by the court, a restrictive covenant must be clear and unambiguous; if it is ambiguous it will by definition be “unreasonable” and, therefore, unenforceable.