Right of First Refusal (ROFR)
A clause giving the company (or existing investors) the first chance to buy a shareholder's shares before that shareholder can sell them to an outside party.
Quick Answer
Can a shareholder just sell to whoever offers the best price?
Not without first offering the company or specified investors the chance to match that exact price and terms — a valid ROFR must be honored before any third-party sale of the shares can legally close.
- The company or investors get the first chance to match terms
- The outside offer's exact price and terms must be honored
- This clause helps keep control of who becomes a shareholder
The Lovie Advantage
Lovie flags ROFR obligations on any modeled share transfer, before a transaction is assumed to be final.
See how this connects to Co-Sale Agreement. For the formal definition, see the SBA's guide to registering your business.
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