What can I do if a minority shareholder refuses to sign the closing documents?

Start by working out what the closing documents need that signature for. A holder who will not sign is a different problem from a holder whose vote is not needed, and the corporate statutes treat the two differently. This answer uses the Canada Business Corporations Act (CBCA) and notes the Ontario Business Corporations Act (OBCA) equivalents. Other provinces run their own Acts.

If the company is selling its business

A sale of all or substantially all of a CBCA corporation’s property outside the ordinary course of business needs shareholder approval by special resolution (s.189(3), (8)). The Act defines a special resolution as one passed by a set majority of the votes cast by the shareholders who voted on it, or signed by all the shareholders entitled to vote on it (s.2(1)). So if one holder will not sign a written resolution, the route may be a meeting and a vote, with the notice s.189(4) describes sent to every shareholder. The Act also says that a greater number of votes required by the articles or a unanimous shareholder agreement prevails (s.6(3)), so read both first.

If the deal is a sale of shares

Each holder sells their own shares. The sections cited here do not compel a holder to sell, and Corporations Canada notes that transfers must conform to any conditions or restrictions that apply to the shares and their transfer. Look in the shareholder agreement for a clause that obliges other holders to sell on the same terms, known as a drag-along, and for the steps it requires. If there is none, ask your lawyer what options remain, such as negotiating with the holder or a different deal structure. Our page on selling a minority stake shows the holder’s side.

The holder’s own routes: dissent and oppression

On a sale under s.189(3), a shareholder may dissent under s.190, subject to ss.191 and 241. After following its steps, which include a written objection at or before the meeting (unless the corporation did not give notice of the meeting’s purpose and the dissent right) and a demand within twenty days after the corporation’s notice or after learning the resolution was adopted (s.190(5), (7)), the holder is entitled to be paid the fair value of their shares, fixed by a court if no offer is made or accepted (s.190(15)–(22)). The corporation must not pay if there are reasonable grounds to believe it is or would after the payment be unable to pay its liabilities as they become due, or that the realizable value of its assets would thereby be less than its liabilities (s.190(26)). A holder may also apply under s.241 if conduct is oppressive or unfairly prejudicial to, or unfairly disregards, their interests. The court may make any interim or final order it thinks fit, which can include varying or setting aside a transaction. OBCA s.185 and s.248 are the Ontario equivalents.