Article of Incorporation Provision - Share Transfer Restrictions

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					This Corporate Article Provision sets forth share transfer restrictions, and a right of first
refusal to protect the stakes of existing shareholders in the event that another
shareholder wishes to sell their shares. This provision will protect existing shareholders
from unwanted shareholders joining the corporation while still allowing for an individual
shareholder to sell his or her shares. This document contains numerous of the standard
terms commonly used in this type of provision; however, additional language may be
added by the user to ensure their needs are met. Use this form if a corporation wishes
to restrict the right of first refusal by allowing requiring unwanted shares to first be
offered to existing shareholders.
         Article of Incorporation Provision - Share Transfer Restrictions


Share Transfer Restrictions/Right of first refusal. If a shareholder wishes to sell or transfer for
value any shares to a bona fide prospective purchaser, and the sale or transfer is not already
prohibited by these articles, the shareholder shall first offer, in writing, such shares for sale to the
corporation in accordance with this paragraph. Any such offer shall identify the prospective
purchaser, shall specify the price offered by the prospective purchaser, and shall offer such
shares to the corporation at the price offered by the prospective purchaser. The corporation shall
have a period of ____ [twenty (20)]. [Comment: these numbers are not provided for by law,
but can be any number the user chooses] days after receipt of the offer within which to accept
it, in whole but not in part. If the corporation accepts the offer within the ____ [twenty (20)]-day
period, it shall purchase and pay for the shares within ____ [ten (10)] [Comment: these
numbers are not provided for by law, but can be any number the user chooses] days after
the ____ [twenty (20)]-day period. If the corporation elects not to exercise its right of first
refusal, the shareholder may sell the shares within a period of ____ [twenty (20)] [Comment:
these numbers are not provided for by law, but can be any number the user chooses] days
thereafter, but only to the prospective purchaser and only at a price no lower than that stated in
the offer delivered by the shareholder to the corporation, provided such prospective purchaser
delivers to the corporation a written instrument confirming that he is bound as a shareholder
under this Agreement. If the sale to the prospective purchaser is not consummated within such
____ [twenty (20)]-day period, the right of first refusal under this paragraph shall be reinstated.




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Description: This Corporate Article Provision sets forth share transfer restrictions, and a right of first refusal to protect the stakes of existing shareholders in the event that another shareholder wishes to sell their shares. This provision will protect existing shareholders from unwanted shareholders joining the corporation while still allowing for an individual shareholder to sell his or her shares. This document contains numerous of the standard terms commonly used in this type of provision; however, additional language may be added by the user to ensure their needs are met. Use this form if a corporation wishes to restrict the right of first refusal by allowing requiring unwanted shares to first be offered to existing shareholders.