They also allow the beneficiary to freely choose whether he wishes to become the holder of the shares or transfer the shares to another person. Since articles of association are a legal priority, these model rules could prevent existing shareholders from prohibiting the transfer of shares to an undesirable third party (even if the third party works for a competing company). As part of a joint buyout plan, a company typically buys life insurance for all its shareholders. When a shareholder dies, the insurance remuneration is used to redeem all the shares held by the deceased shareholder. The preferential subscription right is a common provision granting the remaining shareholders the right of pre-emption over new shares issued by the company or over existing shares available for transfer. .