Right of First Refusal & Co-Sale
Controls who can buy in, and who gets to sell alongside.
A contract giving the company and/or existing shareholders the right to match an offer before a shareholder sells shares to an outsider (right of first refusal), and the right to sell alongside that shareholder on the same terms if the sale goes ahead (co-sale, or “tag-along”). It's a standard protection for existing investors and founders when ownership changes hands.
- Business days
- 1–5Business days
- Lawyer reviewed
- 100%Lawyer reviewed
- Surprise bills
- $0Surprise bills
What a Right of First Refusal & Co-Sale should include
Right of first refusal — the company's or shareholders' right to buy shares before an outsider can.
Process and timing — notice of a proposed sale, and how long the holders have to decide.
Co-sale rights — the right to participate pro rata in someone else's sale.
Exempt transfers — the transfers that fall outside the regime, such as estate planning.
Consequences of non-compliance — what happens to a transfer made without following the process.
Termination — the events that end the arrangement, such as a public offering.
When you need one
When existing shareholders need control over who joins the register, and minority holders need protection against being left behind while a majority holder sells. Frequently a condition of an early financing.
How Ruby drafts it
Tell us what you need
Describe the agreement, your business context, and how fast you need it. A few smart questions, not a legal questionnaire. Your price and turnaround are confirmed before anything starts.
Ruby drafts it
Once pricing is confirmed a qualified Ruby lawyer is assigned to your file, and the first draft is built from your answers and real Canadian statute.
A licensed lawyer reviews every line
A lawyer licensed in Canada reviews and finalizes the document before it reaches you, and writes the plain-language summary that comes with it.
Signed, stored, and yours to revisit
You get the final agreement and its summary, stored so you can come back to it rather than hunting through email for the current version.
The fee is set before any of that starts. Hourly billing moves as scope does; a flat fee is one number, confirmed in writing, that doesn’t change after the work is done. See how Ruby prices agreements.
Or did you mean one of these?
These get confused with a Right of First Refusal & Co-Sale often enough to be worth ruling out before you buy the wrong document.
Questions people ask
A right of first refusal lets existing holders match a deal the seller has already negotiated. A right of first offer requires the seller to come to them first, before shopping it. The first is more protective for the holders; the second is easier on the seller.
The ability to sell a proportionate part of your holding into someone else's deal. Without it, a large holder can find a buyer and exit while smaller holders stay in with a new and unfamiliar co-owner.
Often yes, and for simple structures that is tidier. A separate agreement is common where an investor group wants its own transfer regime distinct from the founders'.
Looking for the plain definition rather than the document? See Right of First Refusal & Co-Sale in the Ruby legal glossary.
This page is general information about Canadian business law and is not legal advice. Laws differ by province and change over time, and how they apply depends on your circumstances. For advice on your situation, speak with a lawyer licensed in your province.
Need a Right of First Refusal & Co-Sale?
Ruby drafts it for a flat $799 CAD, confirmed before any work begins, with a licensed Canadian lawyer on every document.