This is the question: It’s in Canada. We’re signing loan agreements for shareholders of a company. Is it ok if a
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JA: What state is this in? It matters because laws vary by location.
Customer: it’s in Canada
JA: What steps have been taken so far?
Customer: we’re signing loan agreements for shareholders of a company
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Customer: is it ok if a shareholder agreement is signed by one person representing the company’s CEO and the shareholder?
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Debra, Expert
Hello! My name is Debra (formerly known as Legal Ease). Thank you for your question. I'm reviewing it now, and will post back again shortly.
Debra, Expert
No.
The shareholder agreement is a contract between the shareholders so each shareholder has to sign the agreement.
Does that help?
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Thanks for your help. Yes, I’m already aware that shareholder agreement should be signed by all parties. But my question was about individual shareholder loan agreements and share subscriptions, as each shareholder should sign one, and the CEO of company in behalf of the company also signs it. But the thing is that when CEO is himself a shareholder who wants to sign a shareholder loan agreement or share subscription, isn’t this weird that he also signs it as CEO?
Debra, Expert
Yes he should not be signing as CEO as the CEO is the employee and why would he sign in that role?
Debra, Expert
The directors of the corporation sign for the corporation and not the shareholders or employees.
I’m also wondering if it’s something common to incorporate loan and investment terms in the general shareholder agreement which is signed by all the shareholders. This way, we don’t need to create individual shareholder loan agreements and share subscription agreements. What’s your advice?
Debra, Expert
The CEO can then sign but not as the CEO.
I don't know which approach is best. You need your own lawyer to review your goals and then advise what is best based on your particular details.
Debra, Expert
He signs but doesn't sign saying he is the CEO after his name.
If you had a CEO that was not a director or shareholder but just an employee they would not sign, right?
Debra, Expert
I think it's fine. But you do need your own lawyer to assist with all of this.
It is complicated.
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