What You Can Do When Securities Are Subject To A Commissioner’s Transfer Restriction


As a condition to qualification, the Commissioner of Corporations may impose a restriction on the subsequent transfer of the securities being qualified. Cal. Corp. Code § 25141. Rule 260.141.10 describes the general circumstances under which the Commissioner will impose a transfer restriction. The imposition of a transfer restriction was a far more common occurrence in the “old days” when there were fewer exemptions from qualification and more issuers needed to qualify the offer and sale of their securities. Nonetheless, a long-ago imposed condition can become a current problem when a security holder decides to dispose of the securities.

Rule 260.141.12 establishes the conditions under which the Commissioner will order the removal of transfer restrictions. Before doing so, the Commissioner must find that the circumstances no longer require the restriction and that subsequent transfers are not likely to be unfair, unjust or inequitable.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen Matkins | Attorney Advertising

Written by:


Allen Matkins on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.