A great wit once said that: “ The two best days of owning a boat are the day that you bought it and the day that you sold it.”
You don’t have to be nautically inclined to make the same parallel with a Family Business. If from the outset you and your partners are maintaining the discipline to build value – then you’ll want to ensure that such fundamental decisions as listed below are addressed in your Shareholder’s Agreement….your Business Will:
– Under what conditions, timelines, approvals?
– How a shareholder can exit?
– How shareholders can force an individual shareholder’s departure or sale of the business
– How is purchase price determined?
– Restrictions on timing?
– How a change in control can be anticipated
– How to deal with a partner in default
– What to anticipate if a partner dies or becomes disabled?
– An agreed business valuation
– Appropriate legal structure
– Identification of shareholders
– Identification of company directors & officers?
– Confirmation of financial & legal management: accountant; financial statements process; year end; signing authority; corporate lawyer
Excerpted with acknowledgement and appreciation from Phil Thompson, Business Lawyer and Corporate Counsel.
Brian Etherington is the Chairman at Etherington Generations; a risk management firm that specializes in family life insurance and estate planning. He was appointed a Member of the Order of Canada in 2004 and a recipient 
of The Queen’s Golden Jubilee Medal in 2002 for community service, as well as The Queen’s Diamond Jubilee Medal in 2012. He is a Founding Chair of the Special Olympics Canada Foundation and a chair on the advisory council for the 2019 International Youth Games presented by Special Olympics Ontario.