How much does a shareholder agreement cost in Ontario?
Written by For Founders Law, a Toronto firm licensed by the Law Society of Ontario. About us
Short answer
At For Founders Law, a shareholder agreement starts at $1,320 plus HST, for a shareholder or founders agreement for two founders and one share class, covering decision-making, share transfers and founder departure. The number of shareholders, investor terms and custom provisions can change the fee, which is agreed in writing before work starts. The founder pack, with incorporation, a shareholder agreement and founder vesting with IP assignments, starts at $2,360.
A shareholder agreement is usually the second document a company with more than one founder needs, right after incorporation. Here is what we charge for one, what the price covers, and what changes it.
What does the starting price include?
| Work | Starting fixed fee | What the starting price includes | What can change the price |
|---|---|---|---|
| Shareholder agreement | From $1,320 | A shareholder or founders agreement for two founders and one share class; decision-making, share transfers and founder departure terms | Number of shareholders; investor terms; custom provisions |
| Founder vesting and IP assignment | From $920 | Founder share vesting terms and an IP assignment from each founder to the company | Number of founders |
| Founder pack | From $2,360 | Incorporation, a shareholder agreement, and founder vesting with IP assignments | As for each item |
All fees are in Canadian dollars and exclude HST. Your scope and fixed fee are agreed in writing before we begin. The founder pack is priced below its three items bought separately. Current prices are always on our fees page.
What changes the price?
- Number of shareholders. The starting price covers two founders. Each additional shareholder adds terms to agree and signatures to collect.
- Investor terms. When an investor is joining, the agreement may need provisions such as board seats or approval rights for major decisions.
- Custom provisions. Terms written for a particular situation, beyond the standard decision-making, transfer and departure terms.
Any change is quoted before work starts, and you decide whether to go ahead.
Is there a government fee?
No. A shareholder agreement is a private contract among the shareholders and isn’t filed with the Ontario Business Registry or Corporations Canada, so there’s no government fee to sign one. If it’s a unanimous shareholder agreement, the corporation keeps a copy with its articles and by-laws under section 140(1)(a) of the Ontario Business Corporations Act. Government fees apply to incorporating the company itself; see how much does it cost to incorporate in Ontario?
Ordinary or unanimous shareholder agreement?
A unanimous shareholder agreement is signed by all shareholders and can restrict the directors’ powers, under section 108 of the Ontario Act or section 146 of the federal Act. To the extent it does, the shareholders take on the directors’ rights, duties and liabilities. Which kind fits is part of the scope we agree. See shareholder agreement vs unanimous shareholder agreement.
Do we also need founder vesting?
Often. A shareholder agreement sets the rules for what happens when a founder leaves; vesting decides how many of that founder’s shares they’ve earned. The IP assignment moves each founder’s work, including work from before incorporation, into the company. See how does founder vesting work? and try the vesting calculator.
When should we sign it?
At incorporation, or as soon as there’s more than one shareholder. Founders tend to agree easily before there is money, traction or tension. See do I need a shareholder agreement? For other startup work, see how much does a startup lawyer cost in Toronto?
This guide is general information about Ontario and Canadian law, not legal advice for your situation. To talk through an agreement for your company, book a free 15-minute consult.