§ 7-1.2-609 - Share transfer and ownership restrictions.
SECTION 7-1.2-609
§ 7-1.2-609 Share transfer and ownershiprestrictions. – (a) The shares of a corporation are personal property and are transferable inaccordance with the provisions of § 6A-8-204, as amended from time totime, except as may otherwise be provided in this chapter.
(b) The articles of incorporation, bylaws, an agreement amongall or less than all of the shareholders or an agreement between all or lessthan all of the shareholders and the corporation may impose restrictions on thetransfer or registration of transfer of shares of the corporation. Arestriction does not affect shares issued before the restriction was adopted,unless the holders of the shares are parties to the restriction agreement orvoted in favor of the restriction.
(c) A restriction on the transfer or registration of transferof shares is valid and enforceable against the holder or a transferee of theholder if the restriction is authorized by this chapter and its existence isnoted conspicuously on the front or back of the certificate or is noted in theinitial transaction statement required by § 6A-8-204(2). Unless so noted,a restriction is not enforceable against a person without knowledge of therestriction.
(d) A restriction on the transfer, ownership or registrationof transfer of shares is authorized:
(1) To maintain the corporation's status when it is dependenton the number or identity of its shareholders;
(2) To preserve exemptions under federal or state securitieslaw;
(3) To permit a corporation to qualify as:
(i) A real estate investment trust under the provisions ofthe Internal Revenue Code of 1986, as heretofore or hereafter amended, orregulations adopted thereunder; or
(ii) An investment company under the Investment Company Actof 1940, as heretofore or hereafter amended, or regulations adopted thereunder;and
(4) For any other reasonable purpose.
(e) A restriction on the transfer or registration of transferof shares may:
(1) Obligate the shareholder first to offer the corporationor other persons (separately, consecutively or simultaneously) an opportunityto acquire the restricted shares;
(2) Obligate the corporation or other persons (separately,consecutively or simultaneously) to acquire the restricted shares;
(3) Require the corporation, the holders of any class of itsshares or another person to approve the transfer of the restricted shares, ifthe requirement is not manifestly unreasonable;
(4) Prohibit the transfer of the restricted shares todesignated persons or classes of persons, if the prohibition is not manifestlyunreasonable.
(f) For the purposes of this section, "shares" includes asecurity convertible into or carrying a right to subscribe for or acquireshares.