Keeping Ownership in the Family: Part I, Rights of First Refusal

Keeping Ownership in the Family: Part I, Rights of First Refusal

Many closely-held businesses have adopted agreements among their equity owners that restrict the owners in what they can do to sell or transfer their equity.  In corporations, such agreements are frequently referred to as shareholders’ agreements.  In limited liability companies, the key terms of such agreements are included in LLC operating agreements.  And in certain start-up contexts, such restrictions can be broken out into several different agreements, such as investor rights agreements, voting agreements and right of first refusal agreements.