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Canada Shareholder Buy-Sell Agreement (Hybrid Method)

What would happen to your business if one of the owners dies or can no longer continue? Ensure continuity of the business' ownership and management with this Canada Shareholder Buy-Sell Agreement (Hybrid Method).
  • This type of buy-sell agreement is known as a 'hybrid' buy-sell.
  • Under this Agreement, the corporation holds life insurance policies on each of the shareholders.
  • Upon a shareholder's death, the corporation will collect the insurance proceeds, and use the proceeds to fund the purchase of the deceased shareholder's shares by any of the surviving shareholders who are interested, on a pro rata basis (proportional to their existing shareholdings).
  • Any unpurchased shares will be redeemed by the corporation.
  • The corporation will make an election for a deemed dividend to be paid from the capital dividend account if possible.
  • The Agreement is governed by Canadian income tax laws.
This Canada Shareholder Buy-Sell Agreement (Hybrid Method) is available in MS word format and is fully editable.

Download: Canada Shareholder Buy-Sell Agreement (Hybrid Method)

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Canadian Law Resources: (14-Apr-2018) E.&O.E.

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