What is a shareholder agreement and its usefulness?

In both Canada and Quebec, a shareholders' agreement protects the interests of the shareholders of a corporation and prevents third parties from intruding among them. It governs transfers of shares during the lifetime of shareholders, as well as on their death.

Mechanisms are provided for preventing and resolving disagreements. Shareholders also bind their votes to elect each other as directors.

An agreement signed by all the shareholders (a unanimous shareholder agreement) may even remove powers from the directors of the corporation and assign them to the shareholders.