Document background
The Founder Shareholder Agreement is a crucial document used when establishing a new company or formalizing the relationship between existing founders in Canada. It becomes necessary when two or more founders come together to establish or operate a business, requiring clear documentation of their rights, responsibilities, and ownership structure. This agreement, governed by Canadian federal and provincial corporate laws, serves as the cornerstone document that regulates the relationship between founding shareholders, protecting both majority and minority interests. The document typically includes detailed provisions about share ownership, transfer restrictions, management rights, decision-making processes, and exit strategies. It's particularly important for startups and growing companies where founding members need clarity on their roles, commitments, and potential future scenarios such as exits or disputes.
