Definition: consists of anti-takeover laws demanding that prior authorization of a company’s board of directors is given before a shareholder can sell his shares to another individual or organization (provided that the amount of shares surpasses a specified percentage of the company’s outstanding shares). Additionally, such laws can ban other transactions such as mergers or asset sales between the company and a large shareholder for three to five years after the stock holder’s stake surpasses a pre-determined threshold. Such laws are active in most States in the USA.
In a Sentence:
Our company has to be thankful for the existence of the business combination statute. Without it, Nicolson would have sold his shares to Dented Fury and put the rest of the shareholders in jeopardy.
Since I own more than forty percent of Dusty’s Motors shares, the business combination statue won’t allow me to sell any of them. This is a shame since I don’t want to be associated with this environmental hazard of a company anymore.
Synonyms and related words: business combination laws, business combination, statute, combination order