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Stock Buy Back Agreement Template for Canada

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Key Requirements PROMPT example:

Stock Buy Back Agreement

"I need a Stock Buy Back Agreement for our Canadian technology company to repurchase 10,000 common shares from a retiring founding shareholder, with the transaction to close by March 15, 2025, and including special provisions for ongoing intellectual property rights."

Document background
A Stock Buy Back Agreement is utilized when a corporation wishes to repurchase its own shares from existing shareholders. This document is essential in Canadian corporate practice when companies need to reduce share capital, manage excess cash, increase earnings per share, or facilitate shareholder exits. The agreement must comply with Canadian federal and provincial legislation, particularly the Canada Business Corporations Act (CBCA) and provincial securities laws, which require specific solvency tests and corporate authorizations. Typically used in both private and public companies, it includes detailed provisions on purchase price, payment terms, closing conditions, representations and warranties, and tax implications. The agreement is particularly relevant during corporate restructuring, succession planning, or as part of employee stock ownership programs.
Suggested Sections

1. Parties: Identification of the corporation and the selling shareholder(s)

2. Background: Context of the transaction, including current shareholding structure and reason for buyback

3. Definitions: Definitions of key terms used throughout the agreement

4. Sale and Purchase: Core transaction terms including number of shares, purchase price, and payment terms

5. Closing: Details of when and how the transaction will complete, including conditions precedent

6. Representations and Warranties: Statements of fact by both parties regarding their capacity, authority, and share ownership

7. Covenants: Ongoing obligations of the parties before and after closing

8. Tax Matters: Treatment of tax implications and responsibilities

9. Regulatory Compliance: Confirmation of compliance with corporate and securities laws

10. Confidentiality: Obligations regarding non-disclosure of transaction details

11. General Provisions: Standard legal provisions including notices, amendments, and governing law

Optional Sections

1. Right of First Refusal Waiver: Required if other shareholders have pre-emptive rights that need to be waived

2. Shareholder Approval: Required if the buyback needs specific shareholder approval based on size or nature

3. Employment Matters: Included if the selling shareholder is also an employee and employment terms need to be addressed

4. Non-Competition: Required if the selling shareholder needs to be restricted from competing post-sale

5. Escrow Arrangements: Included if part of the purchase price is to be held in escrow

6. Future Rights: Any special rights granted to the selling shareholder regarding future share purchases or company matters

Suggested Schedules

1. Share Certificate Details: Details of share certificates being transferred

2. Purchase Price Calculation: Detailed calculation of the share purchase price if based on a formula

3. Corporate Authorizations: Copies of board and shareholder resolutions authorizing the buyback

4. Regulatory Approvals: Copies of any required regulatory approvals

5. Tax Elections: Forms and details of any tax elections being made

6. Closing Agenda: List of documents to be delivered and actions to be taken at closing

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Financial Services

Technology

Manufacturing

Professional Services

Retail

Healthcare

Energy

Real Estate

Telecommunications

Mining

Agriculture

Transportation

Construction

Relevant Teams

Legal

Finance

Treasury

Corporate Secretariat

Tax

Compliance

Investor Relations

Corporate Development

Board Secretariat

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Secretary

General Counsel

Legal Counsel

Finance Director

Treasury Manager

Corporate Controller

Board Director

Shareholder Relations Manager

Tax Director

Compliance Officer

Investment Relations Manager

Corporate Development Manager

Industries





Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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