Rights & consent
Company Consent vs. Board Approval
Two different gates a transfer can hit — and one runs on a much slower clock than the other.
ROFR is a financial right: the company can match an offer and buy the shares itself. Separately, many companies' governing documents also require outright consent or board approval for any transfer — a gate the company can simply decline, with no obligation to match anything. These are legally distinct mechanisms, and a deal can clear one and still be stopped by the other.
The practical difference that matters most to a buyer or seller: ROFR usually runs on a defined, contractual clock (commonly 30 days). Board approval runs on the board's own meeting schedule — which, for a smaller private company, might be quarterly.
How it works
- Check the specific governing documents (bylaws, stockholders' agreement) for whether a transfer requires board approval, company consent, or both, separate from any ROFR clause.
- If board approval is required, the timeline depends entirely on when the board next meets — an off-cycle request may need a special meeting or written consent, which not every board is set up to do quickly.
- A company (or its board) can decline consent outright, with far less obligation to justify the decision than a ROFR exercise, which at least requires actually buying the shares.
Worked example
A seller's documents require board approval for any transfer over a certain size. The company's board meets quarterly, and the request lands two days after the most recent meeting.
- ROFR window (for comparison)
- 30 days
- Days until next scheduled board meeting
- ~89 days (next quarter)
- Total delay if no special meeting requested
- ~11 weeks
- Total delay if a special meeting or written consent is arranged
- As little as 1–2 weeks
Why it matters: The ROFR clock and the board-approval clock can run on completely different timelines — asking early whether a special board consent is possible, rather than waiting for the next scheduled meeting, is often the single biggest lever on how fast a deal actually closes.
Watch out for
- Don't assume a cleared ROFR window means the deal is done — confirm separately whether board or company consent is still outstanding.
- Ask early, not at the point of signing, whether the company can act via written consent instead of waiting for its next scheduled board meeting.
- A company declining consent outright (as opposed to exercising ROFR) usually gives the seller no compensating benefit — it's simply a dead end for that specific transfer.