Equalize the capital contributions of each of the shareholders of a British Columbia corporation with this Share Capital Equalization Agreement.
- The intent of the Agreement is that both of the shareholders will end up with half of the issued shares.
- The contributing shareholder will make equal yearly instalment payments to the other shareholder for a proportionate number of shares, to bring his/her shareholdings up to 50% of the corporation's issued shares.
- The shares will be held in trust until all payments are made, at which time the additional shares will be released to the contributing shareholder.
This British Columbia Share Capital Equalization Agreement is provided in MS Word format, and is fully editable to fit your specific circumstances.
SHARE CAPITAL EQUALIZATION AGREEMENT THIS AGREEMENT made effective as of the _____ day of ______________, _______. BETWEEN: [NAME OF CORPORATION] a British Columbia corporation (the “Corporation”) OF THE FIRST PART - and - THE SHAREHOLDERS OF THE CORPORATION AS LISTED ON THE SHARE REGISTER OF THE CORPORATION AS AT THE DATE HEREOF (individually, a “Shareholder” and collectively, the “Shareholders”) OF THE SECOND PART WHEREAS: A. The Corporation is a body corporate, incorporated under the laws of the Province of British Columbia, having its head office at [city], British Columbia; B. The Shareholders are collectively the owners of all the issued and outstanding shares in the Corporation; C. There has been an unequal input of capital by the Shareholders for the operation of the Corporation; D. This Agreement is being entered into for the purpose of equalizing the capital contribution by the respective Shareholders within the time period as stated in this Agreement; E. The Corporation has joined as party to this Agreement for the purpose of confirming its consent to an approval of the terms. NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the sum of One Dollar ($1.00) of lawful money of Canada, the receipt of which is hereby acknowledged, and the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows: 1. Upon the distribution of the shares of the Corporation, the Secretary will issue a Share Certificate or Certificates evidencing that the shares of the Corporation are owned as follows: Name of shareholder Number & class of shares [list of shareholders and number of shares owned by each] 2. Notwithstanding anything contained in paragraph 1, [SHAREHOLDER1] shall, within _______ (___) years from the date of execution of this Agreement, be obligated to pay [SHAREHOLDER2] the sum of _________________ Dollars ($________) in equal yearly installments of __________________ Dollars ($________). -2- 3. [SHAREHOLDER1] shall have the right to pay [SHAREHOLDER2] the amounts set out in paragraph 2 above out of his/her share of the profits of the Corporation. 4. The Share Certificate so issued to [SHAREHOLDER1] pursuant to paragraph 1 shall be held in trust by __________________________ [name of person acting as trustee of the shares]. 5. Should [SHAREHOLDER1] fail to complete the requirements of paragraphs 2 and 3 as hereinabove set forth, then the Secretary of the Corporation shall: (a) forthwith cancel Share Certificate No. [no.], being the Share Certificate evidencing the [no. & class of shares] Shares of the Corporation as issued to [SHAREHOLDER1]; (b) issue a new Share Certificate or Certificates as directed by the Directors of the Corporation. 6. Notwithstanding anything contained herein, the Secretary shall issue the aforesaid mentioned shares, notwithstanding that [SHAREHOLDER1] may not have surrendered to the Secretary the existing Share Certificate No. [no.]. 7. The Secretary shall make the appropriate notation in the registers of the Corporation and also on
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