In the sale of a business through a stock transfer, care should be taken to determine the actual ownership of the stock to be sold. Everyone having an interest in it should be made a party to the agreement. A buyer acquiring a business through a stock acquisition takes the business subject to both the known and unknown liabilities of the seller. Accordingly, the buyer should seek protection through the inclusion of detailed seller's warranties as to the corporation's financial condition.
The Oregon Right of First Refusal to Purchase All Shares of Corporation from Sole Shareholder is a legal provision that grants specific rights to existing shareholders when a sole shareholder decides to sell all their shares of a corporation in Oregon. This right ensures that existing shareholders have the first opportunity to purchase the shares being sold before they are offered to other potential buyers. Under this provision, the sole shareholder is required to give notice to all other shareholders stating their intention to sell their shares and the proposed terms of the sale. This notice triggers the right of first refusal, giving the existing shareholders the option to purchase the shares on the same terms and conditions as the offer received from an outside buyer. The purpose of the Oregon Right of First Refusal is to protect the interests of the current shareholders. By having the first opportunity to purchase the shares, they can maintain their proportional ownership in the corporation and prevent dilution of their control. There are a few different types of Oregon Right of First Refusal provisions that can be included in shareholder agreements or corporate bylaws, including: 1. Mandatory Right of First Refusal: In this type, all shareholders are legally obligated to exercise their right of first refusal if a sole shareholder decides to sell their shares. This ensures that the option to purchase the shares is not left to the discretion of individual shareholders. 2. Permissive Right of First Refusal: This type of right allows shareholders to exercise their option at their discretion. They have the choice to purchase the shares or decline without any legal obligation. This gives shareholders more flexibility while maintaining the protection of their ownership rights. 3. Hybrid Right of First Refusal: This combination of the mandatory and permissive right of first refusal allows the existing shareholders to choose whether to exercise their option. However, if one shareholder decides to buy the shares, the other shareholders are obligated to join in the purchase. It is essential for both sole shareholders and existing shareholders to be familiar with the Oregon Right of First Refusal to Purchase All Shares of Corporation from Sole Shareholder provisions. By understanding their rights and obligations, shareholders can ensure fair transactions and the preservation of their investment in the corporation.
