Can my business partner force me to sell my shares if we can't agree anymore?
Not automatically. Whether a partner can force a sale generally depends on what's in your shareholders' agreement, not on a general rule of Ontario corporate law. Many shareholders' agreements include a shotgun clause, which lets one shareholder offer to buy the other out at a stated price, with the other side then required to either sell at that price or turn around and buy the offering shareholder out at the same terms — a mechanism specifically designed to resolve this kind of deadlock. Right-of-first-refusal and drag-along or tag-along provisions can also affect what happens, depending on how they're drafted.
If there's no shareholders' agreement, or none of these mechanisms apply, a partner generally can't unilaterally force you to sell your shares just because you disagree, though persistent deadlock can sometimes be addressed through other routes, including a court application in serious cases. The starting point is always reviewing what your specific shareholders' agreement actually says.
Key takeaways
- Forcing a sale over a disagreement depends on your shareholders' agreement, not general law.
- A shotgun clause is the most common contractual mechanism for resolving deadlock.
- Drag-along, tag-along, and right-of-first-refusal clauses can also affect the outcome.
- Without a relevant clause, a partner generally cannot unilaterally force a share sale.