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If you own a corporation with other shareholders, a shareholder agreement is essential. The law does not outline procedures for situations like a shareholder's death, divorce, or disability, nor does it address conflicts between shareholders. Without a written, legally binding agreement, one shareholder cannot compel another to buy them out, regardless of ownership percentages. Additionally, if a shareholder dies, their family will not automatically receive compensation unless the agreement specifies that the company buys the shares. It's critical for the shareholder agreement to include mechanisms for these potential issues to ensure a smooth transition and to protect the interests of all parties involved.
