What is a unanimous shareholder agreement and how is it different from a regular shareholder agreement?

A unanimous shareholder agreement (USA) is a specific type of agreement under the Business Corporations Act (Ontario) that all shareholders of a corporation sign. Its distinguishing feature is that it can restrict or remove powers that would otherwise belong exclusively to the board of directors. By statute, a USA that limits directors' powers transfers the corresponding duties and liabilities of directors to the shareholders who hold those powers.

A regular shareholder agreement governs the relationship between shareholders (voting, transfers, dividends, exit mechanisms) but cannot strip powers from the directors — the board still retains its statutory authority. A USA can go further and say, for example, that certain decisions requiring shareholder approval (issuing new shares, acquiring major assets, taking on debt above a threshold) must be unanimous and that shareholders, not the board, have the final say.

In practice, USAs are common in joint ventures and closely held corporations where the shareholders want tight control over major decisions and do not fully trust that a majority board could act unilaterally on important matters. They also create a binding obligation on any future shareholder who acquires shares — even if they did not sign the original agreement — as long as the share certificate notes that a USA exists.