Restrictions on transfer of shares:
A)exist only for closely held corporations to control who may become shareholders.
B)are valid under the common law if they are reasonable and adopted for a lawful purpose.
C)are valid under the Revised Act if the restriction is conspicuously noted on the stock certificate.
D)All of the above.
E)Both (b) and (c).

Question

Quizplus · Accepted Answer

Restrictions on transfer of shares are valid under the common law if they are reasonable and adopted for a lawful purpose, and they are valid under the Revised Act if the restriction is conspicuously noted on the stock certificate. These restrictions exist not only for closely held corporations to control who may become shareholders, but can also be imposed by other types of corporations. Therefore, option E is the correct answer.

Restrictions on Transfer of Shares