Frank and Emma are shareholders in a cell phone company that they started together.Emma provided $10 000 for the hardware, while Frank provided $40 000 for the software and the store itself.Frank decided to make a shareholders' agreement with Emma prior to starting the company to ensure she would not sell her shares to competitors at any time in the future.By doing this, Frank has most likely created which type of share transfer rule?

Question

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The type of share transfer rule Frank most likely created is a right of first refusal, as he wants to ensure Emma does not sell her shares to competitors. This type of agreement gives the remaining shareholder(s) the option to purchase the shares before they are sold to anyone else.

Frank and Emma Are Shareholders in a Cell Phone Company