§ 23-1-26-8 — Restrictions on transfer or registration of transfer of shares

Indiana § 23-1-26-8

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 1: INDIANA BUSINESS CORPORATION LAW
• Ch. 26: Issuance of Shares

Text

(a) The articles of incorporation, bylaws, an
agreement among shareholders, or an agreement between shareholders
and the corporation may impose restrictions on the transfer or
registration of transfer of shares of any class or series 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.
(b) 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 section and its existence is noted
conspicuously on the front or back of the certificate or is contained in
the information statement required by section 7(b) of this chapter.
Unless so noted or contained, a restriction is not enforceable against a
person without knowledge of the restriction.
(c) A restriction on the transfer 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;
or
(3) for any other reasonable purpose.
(d) A restriction on the transfer or registration of transfer of shares
may, among other things:
(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; or
(4) prohibit the transfer of the restricted shares to designated
persons or classes of persons, if the prohibition is not manifestly
unreasonable.
(e) For purposes of this section, "shares" includes a security
convertible into or carrying a right to subscribe for or acquire shares.

Legislative History

As added by P.L.149-1986, SEC.10. Amended by P.L.133-2009, SEC.18.