A restriction on transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge of the restriction unless:
(1) The security is certificated and the restriction is noted conspicuously on the security certificate; or
(2) The security is uncertificated and the registered owner has been notified of the restriction.
(1959, P.A. 133, S. 8-204; P.A. 79-435, S. 11; P.A. 97-182, S. 20.)
History: P.A. 79-435 added Subdivs. (a) and (b) to distinguish between certificated and uncertificated securities and rephrased previous provision which read “Unless noted conspicuously on the security a restriction on transfer imposed by the issuer, even though otherwise lawful, is ineffective except against a person with actual knowledge of it”; P.A. 97-182 rephrased provisions, replaced alphabetic with numeric Subdiv. indicators and revised Subdiv. (2) by deleting requirement that notice of the restriction be contained in the initial transaction statement.
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