35-9-202. Share transfer prohibition. (1) An interest in shares of a statutory close corporation may not be voluntarily or involuntarily transferred, by operation of law or otherwise, except to the extent permitted by the articles of incorporation or under 35-9-203.
     (2) Except to the extent the articles of incorporation provide otherwise, this section does not apply to a transfer:
     (a) to the corporation or to any other holder of the same class or series of shares;
     (b) to members of the shareholder's immediate family or to a trust, all of whose beneficiaries are members of the shareholder's immediate family, which immediate family consists of his spouse, parents, lineal descendants including adopted children and stepchildren and the spouse of any lineal descendant, and brothers and sisters;
     (c) that has been approved in writing by all of the holders of the corporation's shares having general voting rights;
     (d) to an executor or administrator upon the death of a shareholder or to a trustee or receiver as the result of a bankruptcy, insolvency, dissolution, or similar proceeding brought by or against a shareholder;
     (e) by merger or share exchange under Title 35, chapter 1, part 8, or an exchange of existing shares for other shares of a different class or series in the corporation;
     (f) by a pledge as collateral for a loan that does not grant the pledgee any voting rights possessed by the pledgor; and
     (g) made after termination of the corporation's status as a statutory close corporation.

     History: En. Sec. 5, Ch. 432, L. 1987.