While Incorporating, the Future Owners of the Corporation Want to Restrict

question 52

Multiple Choice

While incorporating, the future owners of the corporation want to restrict stock transferability to ensure that existing shareholders have the right to buy any shares of stock offered for sale by a shareholder within a specified time period. The right they should establish in their corporate bylaws is referred to as the ________

• A) Right of adequate refusal
• B) Right of first refusal
• C) Right of first purchase
• D) Right of first acknowledgement
• E) Superior right of purchase

---

Definitions:

Supplies Expense

Costs associated with consumable items used in the operation of a business, such as office supplies, which are expensed as used.

Total Expenses

The sum of all costs and expenses, operational or non-operational, incurred by a business during a specific period.

Service Revenues

Income earned by a company for the services it provides to customers, excluding goods sold.

Owner's Drawing

Refers to the withdrawal of cash or other assets from a business by the owner for personal use.