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 Virginia Corporate Right of First Refusal is a legal mechanism that grants a corporation the first opportunity to purchase a shareholder's shares in the event that the shareholder wishes to sell or transfer them. This right is typically outlined and specified in the corporation's bylaws or shareholders' agreement. The purpose of this right is to provide existing shareholders with the opportunity to maintain control and prevent unwanted parties from acquiring shares in the company. It gives the corporation the first option to purchase the shares, ensuring that the ownership remains within the existing shareholder base. There are different types of Virginia Corporate Right of First Refusal — Corporate Resolutions that can exist, depending on the specific language and provisions in the corporation's governing documents. Some of these types include: 1. Standard Right of First Refusal: This type of resolution grants the corporation the option to purchase the shares before any third party. If a shareholder receives an offer from an outside party, they must offer the shares to the corporation at the same price and on the same terms. The corporation then has the right to accept or decline the purchase. 2. Right of First Offer: This type of resolution differs slightly from the standard right of first refusal. Instead of a shareholder needing to receive an offer from a third party, they must first offer the shares to the corporation at a proposed price. The corporation then has the right to accept or negotiate a different price before the shareholder can sell to any other party. 3. Right of First Negotiation: This type of resolution allows the corporation to initiate negotiations with a shareholder who wishes to sell their shares. The corporation has the first opportunity to propose a purchase price and terms, and the shareholder must consider this offer before seeking other buyers. It is important for corporations in Virginia to carefully draft and tailor the right of first refusal provisions within their corporate resolutions. This ensures that the rights and obligations of both the corporation and its shareholders are adequately protected. Seeking legal counsel is recommended to ensure compliance with applicable laws and to properly enforce the right of first refusal when necessary.
