Form with which a corporation advises that it has resolved that some shareholders shall be required to give the corporation the opportunity to purchase shares before selling them to another.
The Minnesota Corporate Right of First Refusal (ROAR) is a legal concept that grants a corporation the first opportunity to purchase a specific interest or asset before it can be sold to a third party. It is commonly implemented through corporate resolutions, which are formal decisions made by a corporation's board of directors. A ROAR can be included in the corporate bylaws or articles of incorporation, or it can be established through a separate agreement between the corporation and its shareholders. The purpose of a ROAR is to provide the corporation with the ability to maintain control over its ownership structure and prevent unwanted transfers of ownership or assets. This right ensures that the corporation has the first chance to take advantage of investment opportunities or to retain ownership within its existing shareholder base. It is especially common in closely-held corporations, where maintaining control over ownership is of utmost importance. There are different types of Minnesota Corporate Right of First Refusal — Corporate Resolutions, including: 1. Shareholder ROAR: This type of ROAR allows existing shareholders to purchase additional shares of the corporation before they can be sold to outsiders. It ensures that any new investors must give existing shareholders the opportunity to maintain their proportional ownership in the company. 2. Asset ROAR: This type of ROAR enables the corporation to acquire specific assets or property before they are sold to third parties. It can include intellectual property, real estate, equipment, or any other valuable assets owned by the corporation. 3. Stock Transfer ROAR: This type of ROAR is triggered when a shareholder wishes to sell their shares to a third party. Before completing the transaction, the shareholder must offer the shares to the corporation at a price determined either through negotiation or as per a predetermined formula. If the corporation declines to purchase the shares, only then can the shareholder proceed with selling to the third party. 4. Option ROAR: This type of ROAR gives the corporation an option to match the terms of a proposed sale by a shareholder or a third party. If the corporation exercises this option, it effectively steps into the shoes of the proposed purchaser and acquires the interest or asset. In Minnesota, the implementation of a Corporate Right of First Refusal through Corporate Resolutions ensures that all necessary legal and regulatory requirements are met. It is crucial for corporations to consult with legal professionals specializing in corporate law to draft appropriate resolutions and ensure compliance with state laws. Additionally, any ROAR should be clearly defined and agreed upon by all relevant parties to avoid potential conflicts or disputes in the future.
