Corporate Governance Considerations During the Covid-19 Pandemic

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Interruption, Business Law, Business Litigation, Business Torts | Economic Torts, By-laws, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Law, Commercial Leasing, Commercial List Matters, Commercial Litigation, Contract Disputes, Coronavirus, Corporate Disputes, Corporate Litigation, COVID-19, Derivative Actions, Directors' and Officers' Liability, Family Business Disputes, Oppression Remedies, Partnership Dispute, Partnerships and Shareholder Disputes, Retail Disputes, Retail Litigation, Sale of Business Disputes, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

Corporate governance issues are top of mind for directors and businesses who are attempting to navigate through the Covid-19 Pandemic related closures and emergency measures. Boards of Directors still need to operate and make decisions in the best interests of the corporation, and this can involve tough decisions, particularly where there is little guidance as to how measures to lift Covid-19 related restrictions will play out. By example, while it may be in the best interest of investors and shareholders that the Board act to lay off employees in the short term, the impact of staff shortages when Covid-19 restrictions are lifted may pose it’s own challenges. Many businesses must consider how to hold governance meetings during Covid-19 times. On March 30, 2020, Ontario passed an Order under the Emergency Management and Civil Protection Act (EMCPA), (Ontario Regulation 107/20) entitled “Meetings for Corporations” making temporary changes to the Business Corporations … Read More

Measures of Last Resort – The Benefits of Exit Provisions in Shareholder’s Agreements

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Law, Business Litigation, Business Torts | Economic Torts, Civil Litigation, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Corporate Disputes, Family Business Disputes, Non-Compete, Non-Competition Agreement, Non-Solicitation Agreement, Non-Solicitation Clause, Oppression Remedies, Sale of Business Disputes, Shareholder Disputes0 Comments

The benefits of a shareholder’s agreement may not be fully considered when parties are intending to go into business together and become joint shareholders in a corporation. Perhaps the mood is optimistic and none of the participants anticipate that things might sour between them down the road. Sometimes corporations are formed absent such an agreement. However, among other benefits, these agreements become particularly useful in managing risk and guiding shareholders through governance issues and disputes that may arise, efficiently so as to minimize disruption to the corporation’s business. Absent a shareholder’s agreement, shareholders in a closely held corporation that cannot see eye-to-eye regarding the operation and path of the corporation, may become stuck in a deadlock where decision-making is effectively stifled due to a stalemate between them. Shareholder’s agreements can serve to provide mechanisms to address deadlock, protect the voice and rights of minority shareholders, provide a road map for … Read More