What is a share-consent provision?
A share-consent provision is a clause — typically in a stockholders’ agreement, charter or side letter — requiring the affirmative consent of a specified investor or class of investors before the company may issue new shares, sell securities or undertake certain corporate actions.
Share-consent provisions overlap with protective provisions, vote thresholds and class-vote requirements. They are used by investors to safeguard their economic interest, control governance, and prevent dilutive or value-destroying issuances.