Document background
The Cross Option Agreement Shareholder is essential for private companies in Canada seeking to establish clear succession planning and maintain control over share ownership. It is commonly implemented when a company has multiple shareholders who want to ensure business continuity and prevent shares from passing to unwanted third parties upon a shareholder's death. The agreement creates mutual options where surviving shareholders have the right to buy, and the deceased shareholder's estate has the right to sell, the deceased's shares at a predetermined valuation method. This document typically includes provisions for life insurance funding, share valuation mechanisms, and completion procedures, all structured within the Canadian legal framework. It's particularly valuable for family businesses, professional corporations, and closely-held companies where maintaining control over share ownership is crucial.
