A right of first refusal is a provision in a shareholder agreement, operating agreement, or other legal document governing a North Carolina company that gives one party the right to match any offer made by another party to purchase shares of the company before they can be sold to that other party.

In the case of a right of first refusal to buy shares, if the shareholder who owns the shares receives an offer from a third party to buy the shares, they must first offer the shares to the party with the right of first refusal at the same price and on the same terms as the third party’s offer. If the party with the right of first refusal declines the offer, then the shareholder is free to sell the shares to the third party.

In the case of a right of first refusal to sell shares, if the shareholder who owns the shares wishes to sell them to a third party, they must first offer the shares to the party with the right of first refusal at the same price and on the same terms as the third party’s offer. If the party with the right of first refusal agrees to buy the shares, then the shareholder must sell the shares to that party.

The purpose of a right of first refusal is to give a particular party the opportunity to purchase shares before they are sold to a third party, which can help ensure that the company’s ownership structure remains stable and that existing shareholders have an opportunity to maintain or increase their ownership stakes. It can also be a way to prevent unwanted or undesirable parties from acquiring shares in the company.