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 Ohio Corporate Right of First Refusal is a legal concept that grants certain rights and preferences to existing shareholders or members of a corporation or limited liability company (LLC) when it comes to the sale or transfer of shares or membership interests. A right of first refusal (ROAR) is a contractual provision that gives a party the option to purchase a specific asset before the owner can sell it to a third party. In the corporate context, a ROAR is typically included in corporate resolutions or bylaws, and its purpose is to protect the existing shareholders or members' interests by allowing them the opportunity to acquire additional shares or membership interests before they are offered to others. The ROAR under Ohio law is often implemented through corporate resolutions, which are formal decisions or actions taken by the corporation's board of directors or shareholders. These resolutions are typically recorded in the minutes of a meeting and serve as legally binding documents governing various corporate matters. In the Ohio corporate context, there can be different types of right of first refusal. Some common variations include: 1. Right of First Refusal for Shares: This type of ROAR applies to corporations and grants existing shareholders the first opportunity to purchase shares that another shareholder intends to sell. It ensures that the existing shareholders maintain their proportional ownership in the company and have a say in who becomes a shareholder. 2. Right of First Refusal for Membership Interests: In the case of an LLC, the ROAR may pertain to membership interests. Just like the shares ROAR, it allows the existing members to have the first chance to acquire membership interests from other members who wish to sell or transfer their stakes in the company. 3. Right of First Refusal for Assets: While less common in corporate resolutions, a ROAR can also apply to specific assets owned by the corporation. It gives the existing shareholders or members the opportunity to purchase the assets before they are sold to third parties. The implementation of the Ohio Corporate Right of First Refusal can vary based on the specific language and provisions included in the corporate resolutions or bylaws. Such resolutions will typically outline the process, timelines, and any limitations or conditions associated with exercising the ROAR. It is essential for corporations and LCS to seek legal counsel to ensure compliance with Ohio law and to draft comprehensive and enforceable corporate resolutions that protect the interests of all parties involved.
