Share transfer restrictions in shareholders’ agreements

27 January 2023 | Knowledge, News

The imposition of restrictions on the transferability of shares and the introduction of relevant related procedures are among the most important issues to be negotiated prior to the conclusion of shareholders’ agreements.

The following is an overview of the most common types of clauses restricting the ability to dispose of company shares.

Consent to disposal

Shareholders’ agreements often contain provisions making the disposal of shares subject to a company’s consent or other restriction (similarly to solutions that can be introduced into the articles of association, in accordance with relevant provisions of the Commercial Companies Code).

Consent to the disposal of shares, which must be given by the company management board, is the most common of these. However, the following entities are often indicated as authorised to give such consent:

  • another body (e.g. the supervisory board or the general meeting),
  • a majority shareholder,
  • a third party.

The right of first offer and the right of first refusal

Both the right of first offer (Polish: prawo pierwokupu) and the right of first refusal (Polish:  prawo pierwszeństwa) contained in a shareholders’ agreement entitle the entity concerned to acquire the shares of another shareholder if the latter intends to sell them to a third party.

Importantly, the right of first refusal is broader than the right of first offer, since it applies to any sale of shares and not only to a sale under a conditional SPA.

Drag-along and tag-along clauses

Drag-along clauses are becoming increasingly common in the Polish market. Thanks to their introduction, in the event of a desire to sell shares to a potential external investor, who is often interested in acquiring 100% of the shares, a person who has reached an agreement with the investor on the disposal of his/her own assets may require the other shareholders to sell their shares on analogous terms and conditions.

A tag-along clause is a kind of a reverse mechanism that allows shareholders to require the one who has attracted an external investor to cause that investor to make an offer for acquiring their shares on identical terms and conditions.

Call option

A call option grants the right for a potential buyer to demand a particular transaction to be performed.

If the call option is exercised, the buyer will be able to purchase shares from their seller at a specific price and time, with the latter being obliged to transfer the shares to the buyer on request or upon the fulfilment of certain conditions indicated in the agreement.


Lock-up clauses in shareholders’ agreements prevent certain shareholders from disposing of their shares for a specific period of time.

The purpose of such clauses is to obtain a guarantee by an investor that a particular person will remain in a company for a certain period of time. Most often, such a clause applies to company founders or key employees who also hold shares in the company.


Share transfer restrictions in shareholders’ agreements are a solution that effectively safeguards the interests of shareholders.

If such restrictions are imposed, however, due care must be taken to ensure that they function properly.


Source: Rzeczpospolita

Date: 22.12.2022

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Dominik Karkoszka

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