Incorporation, LLCs, & Corporate Law Information

Stock Transfer Restrictions in Closely-Held Corporations and LLCs | Limitations on the Transfer of Ownership Interests

In this article we explain stock transfer restrictions in closely-held corporations and LLC.  We answer the question: “when are stock transfer restrictions beneficial?”  We discuss how to structure stock transfer restrictions in your operating agreement or buy-sell agreement.  We explain various options for restricting transfer of ownership interests including requirements that the board or other shareholders approve a transfer of stock, rights of first refusal for transfer of stock, and mandatory purchase of stock by the company or other shareholders.  

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