News & Analysis as of

Shareholders Stock Transfer Restrictions

Nossaman LLP

California Begins to Question the “Friendly PC” Model

Nossaman LLP on

Bill SB 642 is currently under consideration by the California State Legislature and would, if enacted, severely restrict use of the Stock Restriction Agreement and similar arrangements used in the “Friendly PC” model. ...more

Allen Matkins

Why "Transfer or Hypothecate"?

Allen Matkins on

Section 204(b) permits the articles of incorporation to include reasonable restrictions upon the right to transfer or hypothecate shares of any class or classes or series. This is the only time the word "hypothecate" appears...more

Dorsey & Whitney LLP

Stock Transfer Restrictions Should Be Conspicuously Noted, Delaware Chancery Court Opinion Reminds Issuers

Dorsey & Whitney LLP on

In Henry v. Phixios Holdings, Inc., C.A. No. 12504-VCMR,the Delaware Court of Chancery held that pursuant to Section 202 of the General Corporation Law, in order for a stockholder to be bound by stock transfer restrictions...more

A&O Shearman

Delaware Chancery Court Issues Opinion Offering Rare Interpretation Of Stock Transfer Restriction Provision, Delaware General...

A&O Shearman on

On July 10, 2017, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery found plaintiff was not bound by stock transfer restrictions under which the company had sought to revoke his ownership and was...more

Farrell Fritz, P.C.

Sole Owners of Close Corporation and LLC Discover They're Not So Sole

Farrell Fritz, P.C. on

What makes a shareholder a shareholder? What makes an LLC member a member? The simplicity of the questions belies the difficulties and endlessly unique fact patterns encountered in case after case involving close...more

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