Buy-sell agreement
A buy-sell agreement is an arrangement between co-owners of a business setting out when and how an owner's interest will be bought or sold, for example on death, disability, retirement, departure or a dispute. In BC companies it is usually part of a shareholders agreement and may include rights of first refusal, shotgun clauses and valuation formulas.
How BC law treats it
In BC, buy-sell provisions are contractual and are usually found in a shareholders agreement, which operates alongside the company's articles under the BCBCA. Life or disability insurance is often used to fund a buyout. The document used to buy and sell real estate is different: it is a contract of purchase and sale.
What it means for your business
Co-owners should agree on buyout triggers, valuation and funding while relations are good, rather than when a dispute arises.
Risks and common mistakes
An outdated valuation formula or unfunded buyout obligation can make the agreement unworkable when it is needed most.
For the full explanation, see our entry on Shareholder agreements.
General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.
