What happens to a shareholders' buy-sell agreement when one of the business owners dies in Ontario?

A properly drafted buy-sell agreement is designed to activate automatically on a shareholder's death, turning what could be an open-ended dispute into a defined transaction. Death is typically listed as a triggering event alongside things like disability or retirement, and the agreement sets out who must buy the deceased's shares, how they'll be valued, and how the purchase will be paid for — often through life insurance held for exactly this purpose.

Once the trigger occurs, the deceased's estate trustee steps into the deceased shareholder's position for purposes of the agreement: they don't get to run the business, but they do have the right, and often the obligation, to sell the shares on the agreed terms and receive the agreed price. The surviving shareholders' obligation to buy typically becomes binding at the same time. Disputes still arise, usually over valuation methodology or whether a triggering event was properly given notice, so the actual wording of the agreement matters enormously. If the agreement is silent, vague, or was never properly signed, the outcome depends on general corporate and estate law instead of a pre-agreed mechanism, which is a far less predictable path for everyone involved.