Can a shareholders' agreement limit the transfer of shares?

Yes. A shareholders' agreement can impose restrictions on the transfer of shares if it contains buy-sell clauses to that effect. These restrictions are intended, in particular, to protect existing shareholders, control the entry of new shareholders, and promote the stability of the company.

A shareholder cannot necessarily sell, give away, or otherwise freely transfer their shares. When a shareholders' agreement containing buy-sell clauses is in effect, it may stipulate conditions that must be met before a transfer can be completed. Restrictions may also be included in the company's articles of incorporation or arise from applicable laws.

Depending on the circumstances, a shareholders' agreement containing buy-sell clauses may include, in particular:

• a right of first refusal or other pre-emption mechanism in favour of other shareholders;
• the obligation to obtain the consent of the other shareholders before a transfer;
• purchase or sale mechanisms applicable in the event of the death, disability, retirement or departure of a shareholder, whether voluntary or forced;
• rules for determining the value or price of shares;
• restrictions regarding the transfer of shares to persons who are not already shareholders.

These mechanisms make it possible, in particular, to prevent an unwanted person from becoming a shareholder without the other shareholders being able to exercise the rights granted to them by the company's current documents.

Before selling, giving away, or transferring shares, it is recommended to review the articles of association and any shareholder agreements containing buy-sell clauses. Failure to comply with applicable restrictions may jeopardize the transaction or lead to legal consequences.

In summary , a shareholders' agreement containing buy-sell clauses can restrict the transfer of shares and stipulate the conditions that must be met during a sale, gift, or other transfer. The company's articles of incorporation and other current documents should also be reviewed before completing the transaction.