Pennsylvania Consolidated & Unconsolidated Statutes
Chapter 15 - Corporate Powers, Duties and Safeguards
Section 1529 - Transfer of securities; restrictions

(a) General rule.--The transfer of securities of a business corporation may be regulated by any provisions of the bylaws that are not inconsistent with 13 Pa.C.S. Div. 8 (relating to investment securities) and other provisions of law.
(b) Transfer restrictions generally.--A restriction on the transfer or registration of transfer of securities of a business corporation may be imposed by the bylaws or by an agreement among any number of securityholders or among them and the corporation. A restriction so imposed shall not be binding with respect to securities issued prior to the adoption of the restriction unless the holders of the securities are parties to the agreement or voted in favor of the restriction, except that a provision of the bylaws of a registered corporation described in section 2502(1) (relating to registered corporation status) adopted by the shareholders that is described in subsection (d)(1)(ii), (2) or (3) shall be binding with respect to all of the securities of each class or series to which it applies. A restriction may be amended in the manner provided in the bylaws or agreement for amending the restriction or, in the absence of such a provision, as provided for amending the bylaws or agreement generally.
(c) Restrictions specifically authorized.--A restriction on the transfer of securities of a business corporation is permitted by this section if it:
(1) obligates the holder of the restricted securities to offer to the corporation or to any other holders of securities of the corporation or to any other person or to any combination of the foregoing a prior opportunity, to be exercised within a reasonable time, to acquire the restricted securities;
(2) obligates the corporation or any holder of securities of the corporation or any other person or any combination of the foregoing, to purchase the securities that are the subject of an agreement respecting the purchase and sale of the restricted securities;
(3) requires the corporation or the holders of any class or series of securities of the corporation to consent to any proposed transfer of the restricted securities or to approve the proposed transferee of the restricted securities or to approve the amount of securities of the corporation that may be owned by any person or group of persons;
(3.1) obligates the holder of the restricted securities to sell or transfer an amount of restricted securities to the corporation or to any other holders of securities of the corporation or to any other person or to any combination of the foregoing, or causes or results in the automatic sale or transfer of an amount of restricted securities to the corporation or to any other holders of securities of the corporation or to any other person or to any combination of the foregoing; or
(4) prohibits the transfer of the restricted securities to designated persons or classes of persons and the designation is not manifestly unreasonable.
(d) Tax and regulatory restrictions.--Any restriction on the transfer of securities of a business corporation or on the amount of securities of a corporation that may be owned by a person or group of persons for any of the following purposes shall be conclusively presumed to be for a reasonable purpose:
(1) relating to the Federal, State, local or foreign taxation of the corporation or its shareholders, including without limitation:
(i) maintaining the status of the corporation as an electing small business corporation under Subchapter S of the Internal Revenue Code of 1986;
(ii) maintaining or preserving any tax attribute, including without limitation net operating losses; or
(iii) qualifying or maintaining the qualification of the corporation as a real estate investment trust pursuant to the Internal Revenue Code of 1986;
(2) complying with any statutory or regulatory requirement; or
(3) maintaining any statutory or regulatory status.
(e) Other restrictions.--Any other lawful restriction on transfer or registration of transfer of securities is permitted by this section.
(f) Notice to transferee.--A written restriction on the transfer or registration of transfer of a share or other security of a business corporation, if permitted by this section and noted conspicuously on the face or back of the security or in the notice provided by section 1528(f) (relating to uncertificated shares) or in an equivalent notice with respect to another uncertificated security, may be enforced against the holder of the restricted security or any successor or transferee of the holder, including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder. Unless noted conspicuously on the security or in the notice provided by section 1528(f) or in an equivalent notice with respect to another uncertificated security, a restriction, even though permitted by this section, is ineffective except against a person with actual knowledge of the restriction.
(July 9, 2013, P.L.476, No.67, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)

2022 Amendment. Act 122 amended subsecs. (b), (c) and (d).
Cross References. Section 1529 is referred to in sections 1528, 2301, 2324, 2703 of this title.