Document background
The Shareholder Termination Agreement is a critical document used when a shareholder exits a corporation in Canada, whether through voluntary departure, retirement, or negotiated separation. This agreement is essential for privately-held companies operating under Canadian federal or provincial jurisdiction, where share transfers need to be carefully documented and executed. The document must comply with the Canada Business Corporations Act (CBCA) or provincial equivalents, securities regulations, and tax laws. It typically becomes necessary when a shareholder wishes to sell their shares, is required to sell under a shareholders' agreement, or when the company exercises a buyout option. The agreement comprehensively addresses share valuation, payment terms, tax considerations, confidentiality obligations, and releases of claims. Additional provisions may cover employment termination, board resignation, non-compete clauses, and transition arrangements. The document serves to protect all parties' interests and provide clear documentation for corporate records and regulatory compliance.
