Kansas Right of First Refusal Clause for Shareholders' Agreement

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• Control #: US-01770
• Format: Word; Rich Text

Description

This is a model clause for a shareholder's agreement addressing Right of First Refusal. If a shareholder wishes to sell shares, the company will be given notice and has the right to buy the shares during a certain limited time period. Adapt to fit your circumstances. The Kansas Right of First Refusal Clause for Shareholders' Agreement is a legal provision that grants existing shareholders the opportunity to purchase additional shares of a company if a fellow shareholder decides to sell their stake. This clause aims to protect the interests of existing shareholders by giving them the first opportunity to acquire any shares being offered for sale before they are sold to a third party. In Kansas, there are two main types of Right of First Refusal Clauses commonly used in Shareholders' Agreements: 1. Standard Right of First Refusal: This type of clause grants existing shareholders the right to purchase the shares being sold under the same terms and conditions offered by a third-party buyer. If a shareholder decides to sell their shares, they must first offer them to the existing shareholders before making them available to external parties. The existing shareholders then have the option to exercise their right to purchase the shares or waive their right, allowing the selling shareholder to proceed with the sale. 2. Co-sale Right of First Refusal: This clause is typically used when multiple shareholders jointly own a significant portion of a company's shares. In this scenario, if any of the co-shareholders receives an offer to sell their shares, the remaining co-shareholders have the right to join in the sale and offer their own shares on the same terms and conditions. This clause prevents any individual co-shareholder from selling their shares to a third party without other co-shareholders having the opportunity to participate in the sale proportionally. The primary objective of including a Right of First Refusal Clause in a Kansas Shareholders' Agreement is to maintain ownership control within a company, protect shareholders' investments, and avoid unwanted ownership transfers to external parties. It provides existing shareholders with the ability to manage the ownership structure and ensure that new shareholders are added only after current shareholders have had the opportunity to purchase any shares being sold.

The Kansas Right of First Refusal Clause for Shareholders' Agreement is a legal provision that grants existing shareholders the opportunity to purchase additional shares of a company if a fellow shareholder decides to sell their stake. This clause aims to protect the interests of existing shareholders by giving them the first opportunity to acquire any shares being offered for sale before they are sold to a third party. In Kansas, there are two main types of Right of First Refusal Clauses commonly used in Shareholders' Agreements: 1. Standard Right of First Refusal: This type of clause grants existing shareholders the right to purchase the shares being sold under the same terms and conditions offered by a third-party buyer. If a shareholder decides to sell their shares, they must first offer them to the existing shareholders before making them available to external parties. The existing shareholders then have the option to exercise their right to purchase the shares or waive their right, allowing the selling shareholder to proceed with the sale. 2. Co-sale Right of First Refusal: This clause is typically used when multiple shareholders jointly own a significant portion of a company's shares. In this scenario, if any of the co-shareholders receives an offer to sell their shares, the remaining co-shareholders have the right to join in the sale and offer their own shares on the same terms and conditions. This clause prevents any individual co-shareholder from selling their shares to a third party without other co-shareholders having the opportunity to participate in the sale proportionally. The primary objective of including a Right of First Refusal Clause in a Kansas Shareholders' Agreement is to maintain ownership control within a company, protect shareholders' investments, and avoid unwanted ownership transfers to external parties. It provides existing shareholders with the ability to manage the ownership structure and ensure that new shareholders are added only after current shareholders have had the opportunity to purchase any shares being sold.