Fairfax Virginia Right of First Refusal Clause for Shareholders' Agreement

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• County: Fairfax
• 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. Fairfax Virginia Right of First Refusal Clause for Shareholders' Agreement In Fairfax, Virginia, the Right of First Refusal (ROAR) clause is a vital provision included in shareholders' agreements. This clause grants existing shareholders the opportunity to purchase shares of a company before they are sold to third parties. It ensures that existing shareholders have the right to maintain their ownership percentage and protect their investment in the company. There are different types of ROAR clauses that can be customized based on the specific needs of shareholders in Fairfax, Virginia. Here are some notable variations: 1. Standard Right of First Refusal: This type of clause provides existing shareholders with the first opportunity to purchase any shares being sold by another shareholder. If a shareholder receives an offer from a third party to purchase their shares, they must first offer those shares to existing shareholders on the same terms. The existing shareholders have a limited time, typically specified in the agreement, to accept or decline the offer. 2. Right of First Offer: This clause requires the shareholder who wishes to sell their shares to first offer them to existing shareholders before considering offers from third parties. However, unlike the standard ROAR, existing shareholders have the option to either accept or decline the offer. If declined, the shareholder is then free to explore other options. 3. Co-Sale Right: This clause is often used when multiple shareholders collectively hold a significant stake in a company. It allows minority shareholders to sell their shares alongside a majority shareholder if the latter receives an offer from a third party. This grants minority shareholders the opportunity to exit their investment alongside the majority shareholder, providing them with more liquidity options. 4. Tag-Along Right: The tag-along or "piggyback" right ensures that minority shareholders have the option to sell their shares in a company if a majority shareholder receives an offer from a third party. Without this clause, it might be difficult for minority shareholders to find buyers for their shares on the same terms as the majority shareholder. These variations of the ROAR clause aim to protect the interests of Fairfax, Virginia shareholders by providing them with the ability to maintain their ownership position, regulate share transfers, and ensure fair treatment. Each type of clause serves a specific purpose and can be tailored to meet the requirements and preferences of involved parties. It is important for shareholders and companies in Fairfax, Virginia to consult legal professionals specializing in corporate law to draft and include the appropriate ROAR clause in their shareholders' agreement. This will help establish clear guidelines and avoid potential disputes or challenges related to share transfers.

Fairfax Virginia Right of First Refusal Clause for Shareholders' Agreement In Fairfax, Virginia, the Right of First Refusal (ROAR) clause is a vital provision included in shareholders' agreements. This clause grants existing shareholders the opportunity to purchase shares of a company before they are sold to third parties. It ensures that existing shareholders have the right to maintain their ownership percentage and protect their investment in the company. There are different types of ROAR clauses that can be customized based on the specific needs of shareholders in Fairfax, Virginia. Here are some notable variations: 1. Standard Right of First Refusal: This type of clause provides existing shareholders with the first opportunity to purchase any shares being sold by another shareholder. If a shareholder receives an offer from a third party to purchase their shares, they must first offer those shares to existing shareholders on the same terms. The existing shareholders have a limited time, typically specified in the agreement, to accept or decline the offer. 2. Right of First Offer: This clause requires the shareholder who wishes to sell their shares to first offer them to existing shareholders before considering offers from third parties. However, unlike the standard ROAR, existing shareholders have the option to either accept or decline the offer. If declined, the shareholder is then free to explore other options. 3. Co-Sale Right: This clause is often used when multiple shareholders collectively hold a significant stake in a company. It allows minority shareholders to sell their shares alongside a majority shareholder if the latter receives an offer from a third party. This grants minority shareholders the opportunity to exit their investment alongside the majority shareholder, providing them with more liquidity options. 4. Tag-Along Right: The tag-along or "piggyback" right ensures that minority shareholders have the option to sell their shares in a company if a majority shareholder receives an offer from a third party. Without this clause, it might be difficult for minority shareholders to find buyers for their shares on the same terms as the majority shareholder. These variations of the ROAR clause aim to protect the interests of Fairfax, Virginia shareholders by providing them with the ability to maintain their ownership position, regulate share transfers, and ensure fair treatment. Each type of clause serves a specific purpose and can be tailored to meet the requirements and preferences of involved parties. It is important for shareholders and companies in Fairfax, Virginia to consult legal professionals specializing in corporate law to draft and include the appropriate ROAR clause in their shareholders' agreement. This will help establish clear guidelines and avoid potential disputes or challenges related to share transfers.