Ohio 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 Ohio Right of First Refusal Clause for Shareholders' Agreement is an essential provision that governs the rights of shareholders in the event of a proposed sale or transfer of shares. This clause provides shareholders with the opportunity to purchase the shares being offered by a selling shareholder before they are sold to a third party. It aims to protect the existing shareholders by giving them the right to maintain or increase their ownership percentage in the company. Under Ohio law, there are different types of Right of First Refusal Clauses that shareholders may consider incorporating into their Shareholders' Agreement. These include: 1. Standard Right of First Refusal: This is the most common type of clause, where the shareholder proposing to sell their shares must first notify other shareholders of their intention. The other shareholders then have the right to purchase the shares on the same terms and conditions as the proposed third-party offer. 2. Co-Sale Right: Sometimes referred to as a "Tag-Along Right," this provision allows minority shareholders to participate in a sale transaction on the same terms and conditions as the majority shareholder. It ensures that minority shareholders are not left out of an opportunity to sell their shares when a majority shareholder intends to sell their own. 3. Right of First Offer: This clause grants existing shareholders the first opportunity to make an offer to purchase additional shares issued by the company before they are offered to third parties. It allows shareholders to maintain their proportionate ownership or increase their stake in the company. 4. Right of First Negotiation: This provision gives shareholders the exclusive right to negotiate the purchase of shares before the selling shareholder is permitted to engage in negotiations with third parties. It provides shareholders with an initial opportunity to propose terms and conditions for the purchase of shares before alternative offers are considered. In Ohio, these different types of Right of First Refusal Clauses offer shareholders flexibility in establishing their rights and protecting their investments. When drafting a Shareholders' Agreement, it is crucial to consult with legal professionals familiar with Ohio corporate laws to ensure the inclusion of appropriate clauses tailored to the specific needs of the shareholders and the company.

The Ohio Right of First Refusal Clause for Shareholders' Agreement is an essential provision that governs the rights of shareholders in the event of a proposed sale or transfer of shares. This clause provides shareholders with the opportunity to purchase the shares being offered by a selling shareholder before they are sold to a third party. It aims to protect the existing shareholders by giving them the right to maintain or increase their ownership percentage in the company. Under Ohio law, there are different types of Right of First Refusal Clauses that shareholders may consider incorporating into their Shareholders' Agreement. These include: 1. Standard Right of First Refusal: This is the most common type of clause, where the shareholder proposing to sell their shares must first notify other shareholders of their intention. The other shareholders then have the right to purchase the shares on the same terms and conditions as the proposed third-party offer. 2. Co-Sale Right: Sometimes referred to as a "Tag-Along Right," this provision allows minority shareholders to participate in a sale transaction on the same terms and conditions as the majority shareholder. It ensures that minority shareholders are not left out of an opportunity to sell their shares when a majority shareholder intends to sell their own. 3. Right of First Offer: This clause grants existing shareholders the first opportunity to make an offer to purchase additional shares issued by the company before they are offered to third parties. It allows shareholders to maintain their proportionate ownership or increase their stake in the company. 4. Right of First Negotiation: This provision gives shareholders the exclusive right to negotiate the purchase of shares before the selling shareholder is permitted to engage in negotiations with third parties. It provides shareholders with an initial opportunity to propose terms and conditions for the purchase of shares before alternative offers are considered. In Ohio, these different types of Right of First Refusal Clauses offer shareholders flexibility in establishing their rights and protecting their investments. When drafting a Shareholders' Agreement, it is crucial to consult with legal professionals familiar with Ohio corporate laws to ensure the inclusion of appropriate clauses tailored to the specific needs of the shareholders and the company.