cryptohunter
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Private companies often have rules to control who can own shares. They put these rules in their articles of association.
One common rule is the pre-emption right. This means existing shareholders get the first shot at buying any shares someone wants to sell. It keeps ownership in the hands of the current owners and stops outside people from getting a big say without everyone's agreement. But if existing shareholders pass on buying, then the shares can go to an outsider.
Companies might also have a rule saying the board of directors has to give the way for any share transfers. The board checks if the new person wanting shares is a good fit, looking at things like money stability, if they match the company's values, and how it might affect the business.
One common rule is the pre-emption right. This means existing shareholders get the first shot at buying any shares someone wants to sell. It keeps ownership in the hands of the current owners and stops outside people from getting a big say without everyone's agreement. But if existing shareholders pass on buying, then the shares can go to an outsider.
Companies might also have a rule saying the board of directors has to give the way for any share transfers. The board checks if the new person wanting shares is a good fit, looking at things like money stability, if they match the company's values, and how it might affect the business.