The creation of restricted shares allows management or majority owners to control the corporation by concentrating voting power in the hands of a few friendly shareholders.

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Restricted shares typically come with certain limitations or requirements, such as a lock-up period or restrictions on selling, which can limit their marketability, making them less desirable to outside shareholders or investors. This allows management or majority owners to retain control over the corporation by issuing restricted shares to friendly shareholders who can help maintain their voting power.

The Creation of Restricted Shares Allows Management or Majority Owners