Right of First Refusal (ROFR)
A contractual right giving existing owners the opportunity to match any outside offer before an ownership interest can be sold to a third party. Standard in most operating agreements and partnership agreements. Without it, a partner could sell their share to anyone.
Where This Matters
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Partner Disputes
→When co-owners disagree — from buyout negotiation to mediation to dissolution. Practical guidance for resolving business conflicts without destroying the company.
Entity Formation
Choosing and setting up the right business structure — LLC, S-Corp, C-Corp, partnership — with California-specific tax implications and long-term planning.
Related Terms
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Enterprise Value (EV)Seller's Discretionary Earnings (SDE)EBITDA MultipleQuality of Earnings (QoE)Add-BacksDue DiligenceLetter of Intent (LOI)Holdback (Escrow)Earn-OutAsset SaleStock Sale (Equity Sale)GoodwillPersonal GoodwillCommunity PropertySeparate PropertyPereira MethodVan Camp MethodTransmutationBuy-Sell AgreementShotgun Clause (Russian Roulette Clause)View all →