Preference Right Clause

It is a clause which gives its beneficiary the right to purchase the shares of the shareholder who wishes to sell his shares at a price and under conditions identical to those offered by the prospective purchaser.

The preference clause is similar to the pre-emption clause, but differs in some respects. The pre-emption clause allows the acquisition of the shares at a different price, whereas the preference clause allows the acquisition at the price proposed by the prospective purchaser.


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