It is generally considered illegal to place restrictions on the transfer of shares of stock of a statutory close corporation.

Question

Quizplus · Accepted Answer

Statutory close corporations often have restrictions on the transfer of shares to preserve the close-knit nature of the ownership and to prevent outside parties from easily gaining control. These restrictions are typically allowed by law, provided they are reasonable and clearly stated in the corporation's articles of incorporation or bylaws.

It Is Generally Considered Illegal to Place Restrictions on the Transfer