Two-Party Shareholder Agreement
The rulebook between the people who own the company.
A contract between a company's shareholders (and often the company itself) that governs decision-making, share transfers, what happens if a shareholder leaves, and how disputes get resolved. Canadian startups with more than one founder should have one in place before problems start, not after.
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What a Two-Party Shareholder Agreement should include
Decision-making — what the board decides, what needs shareholder approval, and what needs everyone.
Share transfers — rights of first refusal and the restrictions on selling to an outsider.
Departure — what happens to a shareholder's shares when they leave, die, or become unable to act.
Drag-along and tag-along — how a sale of the company works when not everyone agrees.
Deadlock — the mechanism for breaking a tie, which two-party companies need most.
Dividends and funding — how profits are distributed and how further capital is raised.
When you need one
As soon as the company has more than one shareholder, and ideally before there is anything worth arguing about. Corporate statutes differ across Canada — federally under the CBCA and provincially under each province's own act — so the agreement should be drafted against the statute the company is actually incorporated under.
How Ruby drafts it
Tell us what you need
Describe the agreement, your business context, and how fast you need it. A few smart questions, not a legal questionnaire. Your price and turnaround are confirmed before anything starts.
Ruby drafts it
Once pricing is confirmed a qualified Ruby lawyer is assigned to your file, and the first draft is built from your answers and real Canadian statute.
A licensed lawyer reviews every line
A lawyer licensed in Canada reviews and finalizes the document before it reaches you, and writes the plain-language summary that comes with it.
Signed, stored, and yours to revisit
You get the final agreement and its summary, stored so you can come back to it rather than hunting through email for the current version.
The fee is set before any of that starts. Hourly billing moves as scope does; a flat fee is one number, confirmed in writing, that doesn’t change after the work is done. See how Ruby prices agreements.
Or did you mean one of these?
These get confused with a Two-Party Shareholder Agreement often enough to be worth ruling out before you buy the wrong document.
Questions people ask
A unanimous shareholder agreement is a specific creature of Canadian corporate statutes: signed by all shareholders, it can transfer powers that would otherwise sit with the directors. An ordinary shareholder agreement is a contract between the shareholders who sign it and does not have that effect.
That is often when it matters most, because with two shareholders there is no majority to break a tie. The deadlock mechanism alone is usually worth the document.
Articles set the company's basic structure. A shareholder agreement governs the relationship between the owners — transfers, exits, deadlock, who decides what. They do different jobs and most companies with more than one owner need both.
Looking for the plain definition rather than the document? See Two-Party Shareholder Agreement in the Ruby legal glossary.
This page is general information about Canadian business law and is not legal advice. Laws differ by province and change over time, and how they apply depends on your circumstances. For advice on your situation, speak with a lawyer licensed in your province.
Need a Two-Party Shareholder Agreement?
Ruby drafts it for a flat $799 CAD, confirmed before any work begins, with a licensed Canadian lawyer on every document.