Owning shares in a privately-held company or partnership is a far more
rigorous endeavour than owning shares in a publicly-traded company,
whether its on the TSX Venture, TSX or NYSE. Having practised law
for many years in New York City / Wall Street, I became highly familiar
with the challenges facing shareholders in both publicly-traded and
private company spheres, and the private sector clearly imposes far more
challenges upon its shareholders.
The principal challenge associated with holding shares in privately-held
companies is their lack of liquidity (i.e., the absence of a stock
market to buy and sell shares), which necessitates the creation of
specific shareholder arrangements. This is principally done
through a shareholders agreement, which not only provides a contractual
framework for operating the business and making key decisions, but can
also create procedural buy-sell mechanisms, including death & disability
arrangements, put & call options, shotgun provisions, piggy-back rights,
insolvency and marital break-up requirements. The shareholders
agreement thus provides an important mechanism for resolving challenging
shareholder situations; nonetheless, disputes do arise and than the
lawyer takes on a more assertive role in resolving a specifically
defined point of contention.
Providing corporate-commercial legal advice and strategic direction to
business enterprises, is the central focus of business lawyer
Christopher R. Neufeld's legal practice. To advance your business'