How can you transfer stock between directors of a corporation?

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

An award-winning small business attorney in New York City, Nina is a sought-after professional speaker and Entrepreneur Magazine online contributor. She is the go-to counsel for knowledge economy and creative companies, delivering legal services and educational resources that save them time, money, and aggravation.

Posted on March 24, 2015 in Form a Company

Q.:  In a privately held company, is it necessary for a stock transfer between two directors to be approved by the shareholders?

 

A.:  Under most state laws, shareholders have the right to approve (or disapprove) any transferring ownership is involved, including a stock transfer.  If the company has multiple classes of stock, the shareholders’ agreement may specify that only the owners of certain classes of will vote on that particular issue – in other words, that particular kind of stock transfer is not an issue open to all shareholders, only some.

To answer your specific situation, speak to an attorney in your state to review the different classes of stock, voting rights, and corporate bylaws, all of which will have a bearing on the best way to document the stock transfer.

 

What other law questions do you have about transfer of ownership and closing a business?

 

 

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