Right of first refusal versus right of first offer
Shareholder agreements can be drafted to allow business partners in private corporations to sell their shares whenever they want while protecting the remaining owners, says Toronto business lawyer Anton Katz.
By default, shareholders in private corporations are usually unable to sell their interest in the business without the consent of the board of directors, says Katz, principal of Anton M. Katz Barrister & Solicitor.
However, by adding clauses providing for a “right of first refusal” or a “right of first offer,” he says shareholders can have the flexibility of selling when they are ready — regardless of the board’s views — while minimizing the risk of being forced to work with a stranger.
For the full article, visit AdvocateDaily.com