Originally from:
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Hardcover
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Electronic
Preview Page
CHAPTER 37
STOCK TRANSFERS
Section
§ 37.01 Stock Transfers
§ 37.02 Rights and Liabilities of the Parties
§ 37.03 Prescriptions and Proscriptions
§ 37.04 Security Regulations
§ 37.01 Stock Transfers
Minnesota favors stock restrictions especially in the close corporation
setting. “A corporation, as a matter of business prudence, may
legitimately desire to keep its stock in the hands of those who are
congenial and will work together for the success of the enterprise . . . .”1
Article 8, the Investment Securities section of the Uniform Commercial
Code, regulates the transfer of stock.2 Under the Act, “[a]ll that is
required to effect a valid transfer of securities between parties to the
transfer is delivery with intent to change ownership.”3 When a
certificated or uncertificated security is delivered4 to a purchaser, the
purchaser acquires all rights in the security that the transferor had or had
power to transfer.5 “[T]he transfer works a complete substitution,
carrying with it, in the absence of a statute to the contrary, all rights and
liabilities of the assignor.”6
§ 37.02 Rights and Liabilities of the Parties
The transferee only acquires rights to the extent of the interest
transferred.7 A protected purchaser8 acquires the rights of a purchaser
along with “interest in the security free of any adverse claim.”9
Purchasers who purchase in good faith without notice of any
restrictions on the stock in question are protected from any restrictions
on the stock.10 Transfer occurs when the purchaser acquires possession
of the security interest.11
Roger J. Magnuson is a Partner at Dorsey and Whitney, LLP, where he serves as Head of the National Strategic Litigation Group and has practiced since 1973. He has been recognized as one of the top trial lawyers in the United States by major national and international publications, including Chambers International Guide to American Lawyers, which profiles the top 500 trial lawyers in the United States, Best Lawyers in America, Who's Who in American Law, and Who's Who in America. Mr. Magnuson was also recognized by a Journal of Law and Politics' survey for Judge's Choice "Wins Most Cases."
Some high profile cases that he has litigated include representation of the Florida Senate in the Bush v. Gore election controversy in 2000; and representation of the Plaintiffs in the widely publicized and studied Mall of America case. For several years he has represented, among other persons and entities, the Minnesota Twins and Major League Baseball principals and players in litigation; and has litigated national and local cases in federal and state court venues. He has appealed before the Supreme Court in a number of cases; as well as the Minnesota Supreme Court. He has authored several articles and 7 books.
Richard A. Saliterman is a Principal in Saliternan & Siefferman P.C., a full-service firm in Minneapolis established in 1976. Mr. Saliterman is a leading expert on corporate business matters, and is the author of several publications on business start-ups, franchises, and trademarks. Mr. Saliterman is the former National Judge Advocate for the U.S. Navy League, based in Washington D.C.
Contributing Editor:
Amanda Chang
Contributing Authors:
Alecia Anderson
Seth Back
John Baker
Shannon Berg
Constatin Burachek
Benjamin Carpenter
Ryan Check
Carl Christensen
Peter Fear
Michael Frasier
Aaron Hall
Catherine Hanson
Paul Harman
Amy Ithlan
Michael Kern
Chris Kuhlman
