A unanimous shareholder agreement is a contract signed by every shareholder of a CBCA corporation that can strip the board of directors of some or all of its statutory powers and hand them to the shareholders instead — and whatever powers move over, the matching legal duties and liability move with them.
CBCA section 146(1) makes this valid: an agreement “among all the shareholders” restricting the directors’ powers “is valid.” Section 146(5) then answers the question that matters most to a director: parties who are given the directors’ powers “have all the rights, powers, duties and liabilities of a director,” and “the directors are relieved to the same extent” — so a power removed from the board is not just removed, it is transferred, liability included.
The agreement also binds people who never signed it. Under section 146(3), “a purchaser or transferee of shares subject to a unanimous shareholder agreement is deemed to be a party” to it, and section 146(4) gives a purchaser who was not told about the agreement a narrow escape hatch: they “may, no later than 30 days after they become aware” of it, “rescind the transaction.” Our sister firm’s Ontario guide to USAs confirms the same binding effect in plain terms: it creates “a binding obligation on any future shareholder who acquires shares — even if they did not sign the original agreement — as long as the share certificate notes that a USA exists.”
The same guide describes who typically reaches for a USA and why: it is “common in joint ventures and closely held corporations where the shareholders want tight control over major decisions and do not fully trust that a majority board could act unilaterally on important matters” — a description that fits a private equity fund sitting alongside a founder or management team about as precisely as it fits anyone.
A fund and a founder each hold 50% of a portfolio company and sign a USA removing the board’s power to approve capital expenditures over $250,000, transferring that decision to the shareholders directly by unanimous vote. A year later, a newly appointed director expects to vote on a $400,000 equipment purchase at the next board meeting — but under section 146(5) that decision was never the board’s to make once the USA took effect. It sits with the shareholders, and the director who signs off on it in the board minutes carries no more liability for that specific decision than an ordinary shareholder would, because the power, and the liability that rides with it, already moved.
See also: Pre-emptive right · Shotgun buy-sell clause · Tag-along right.
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