§ 7-1.2-609. Share transfer and ownership restrictions. (a) The shares of a corporation are personal property and are transferable in accordance with the provisions of § 6A-8-204, as amended from time to time, except as may otherwise be provided in this chapter.

(b) The articles of incorporation, bylaws, an agreement among all or less than all of the shareholders or an agreement between all or less than all of the shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted, unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.

(c) A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this chapter and its existence is noted conspicuously on the front or back of the certificate or is noted in the initial transaction statement required by § 6A-8-204(2). Unless so noted, a restriction is not enforceable against a person without knowledge of the restriction.

(d) A restriction on the transfer, ownership or registration of transfer of shares is authorized:

(1) To maintain the corporation's status when it is dependent on the number or identity of its shareholders;

(2) To preserve exemptions under federal or state securities law;

(3) To permit a corporation to qualify as:

(i) A real estate investment trust under the provisions of the Internal Revenue Code of 1986, as heretofore or hereafter amended, or regulations adopted thereunder; or

(ii) An investment company under the Investment Company Act of 1940, as heretofore or hereafter amended, or regulations adopted thereunder; and

(4) For any other reasonable purpose.

(e) A restriction on the transfer or registration of transfer of shares may:

(1) Obligate the shareholder first to offer the corporation or other persons (separately, consecutively or simultaneously) an opportunity to acquire the restricted shares;

(2) Obligate the corporation or other persons (separately, consecutively or simultaneously) to acquire the restricted shares;

(3) Require the corporation, the holders of any class of its shares or another person to approve the transfer of the restricted shares, if the requirement is not manifestly unreasonable;

(4) Prohibit the transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.

(f) For the purposes of this section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.

History of Section. (P.L. 2004, ch. 216, § 2; P.L. 2004, ch. 274, § 2; P.L. 2005, ch. 120, § 1; P.L. 2005, ch. 130, § 1.)