Document:

Exhibit 4.3

 

DESCRIPTION
OF THE COMPANY’S SECURITIES REGISTERED PURSUANT TO SECTION 12

OF THE SECURITIES
EXCHANGE ACT OF 1934

 

References
to “we,” “us,” or “our” and the “Company” refer to GrandSouth Bancorporation,
a South Carolina corporation.

 

This
summary does not purport to be complete and is subject to and is qualified in its entirety by reference to our articles of incorporation,
as amended (“Articles of Incorporation”), and our amended and restated bylaws (“Bylaws”), each of which
is incorporated by reference as an exhibit to our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission
(the “SEC”) of which this Exhibit 4.3 is a part. We encourage you to read our Articles of Incorporation and Bylaws,
and the applicable provisions of the South Carolina Business Corporation Act (the “SCBCA”).

 

General

 

Our
Articles of Incorporation authorize the issuance of capital stock consisting of 20,000,000 shares of common stock, no par value
per share, and 20,000,000 shares of preferred stock, no par value per share. This Exhibit 4.3 only applies to our common stock;
however, our common stock is subject to certain preferential rights of our preferred stock as described in the Articles of Incorporation.

 

Pursuant
to the provisions of the SCBCA, any outstanding shares of capital stock of the Company reacquired by it would be considered authorized
but unissued shares. The authorized but unissued shares of our common stock and preferred stock are available for general purposes,
including, but not limited to, the possible issuance as stock dividends, use in connection with mergers or acquisitions, cash
dividend reinvestments, stock purchase plans, public or private offerings, or our equity compensation plans. Except as may be
required to approve a merger or other transaction in which additional authorized shares of common stock would be issued, no shareholder
approval will be required for the issuance of these shares.

 

Common Stock

 

General

 

Each
share of our common stock has the same relative rights as, and is identical in all respects to, each other share of common stock.
All outstanding shares of our common stock are fully paid and nonassessable. Our common stock is quoted on OTC
Markets Group’s QTCQX Best Market tier under the symbol “GRRB.”

 

Voting
Rights

 

Each
outstanding share of our common stock entitles the holder to one vote on all matters submitted to a vote of common shareholders,
including the election of directors. The holders of our common stock possess exclusive voting power, except as otherwise provided
by law or by articles of amendment establishing any additional series of our preferred stock.

 

There
is no cumulative voting in the election of directors. The holders of a majority of the votes cast by our common shareholders can
elect all of the directors then standing for election by the common shareholders. When a quorum is present at any meeting, questions
brought before the meeting will be decided by the vote of the holders of a majority of the shares present and voting on such matter,
whether in person or by proxy, except when the meeting concerns matters requiring the vote of a greater number of affirmative
votes under applicable South Carolina law or our Articles of Incorporation. Our Articles of Incorporation and Bylaws provide certain
provisions that may limit shareholders’ ability to effect a change in control as described below under the section entitled
“Anti-Takeover Effects of Certain Articles of Incorporation and Bylaws Provisions.”

    	 

    	 

    

Dividends,
Liquidation and Other Rights

 

We
can pay dividends if, as and when declared by our board of directors, subject to compliance with limitations imposed by law. Holders
of shares of common stock are entitled to receive dividends only when, as and if approved by our board of directors from funds
legally available for the payment of dividends. The holders of our preferred stock have priority over the holders of common stock
with respect to dividends as described in our Articles of Incorporation in that the preferred shareholders are entitled to receive
dividends in a per share amount equal to 105% of that declared on the shares of common stock.

 

Our
shareholders are entitled to share ratably in our assets legally available for distribution to our shareholders in the event of
our liquidation, dissolution or winding up, voluntarily or involuntarily, after payment of, or adequate provision for, all of
our known debts and liabilities. These rights are subject to the preferential rights of any series of our preferred stock that
may then be outstanding.

 

Holders
of our shares of common stock have no preference, conversion, exchange, sinking fund or redemption rights and have no preemptive
rights to subscribe for any of our securities. Our board of directors may issue additional shares of our common stock without
the approval of our shareholders.

 

Transfer
Agent and Registrar

 

The
transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company, located at 1 State Street
30th Floor, New York, NY 10004-1561.

 

Anti-Takeover
Effect of Certain Articles of Incorporation and Bylaws Provisions 

 

Our
Articles of Incorporation and Bylaws, in addition to the SCBCA, contain certain provisions that make it more difficult to acquire
control of us by means of a tender offer, open market purchase, a proxy fight or otherwise. Several of these provisions are designed
to encourage persons seeking to acquire control of us to negotiate with our board of directors. We believe that, as a general
rule, the interests of our shareholders would be best served if any change in control results from negotiations with our board
of directors.

 

The
following description of certain provisions of our Articles of Incorporation and Bylaws that may have anti-takeover effects is
a summary only and is subject to, and is qualified by reference to, applicable provisions of our Articles of Incorporation and
our Bylaws as well as applicable provisions of the SCBCA.

 

Factors
to be Considered in Certain Transactions

 

Our
Articles of Incorporation require our board of directors, when considering whether a proposed plan of merger, consolidation, exchange,
or sale of all, or substantially all, of the assets of the Company, to consider the interests of the Company’s employees
and the communities in which the Company and its subsidiaries do business in addition to the interests of the Company’s
shareholders.

 

Authorized
but Unissued Preferred Stock

 

The
authorization of the preferred stock could have the effect of making it more difficult or time-consuming for a third party to
acquire a majority of our outstanding voting stock or otherwise effect a change of control. Shares of the preferred stock may
also be sold to third parties that indicate that they would support the board of directors in opposing a hostile takeover bid.
The availability of the preferred stock could have the effect of delaying a change of control and of increasing the consideration
ultimately paid to our shareholders. Our board of directors may authorize the issuance of preferred stock for capital-raising
activities, acquisitions, joint ventures or other corporate purposes that have the effect of making an acquisition of us more
difficult or costly, as could also be the case if the board of directors were to issue additional common stock for such purposes.

 

Supermajority
Shareholder Approval Required for Certain Transactions

 

Our
Articles of Incorporation provide that any plan of merger, consolidation or exchange or any plan for the sale of all or substantially
all of the assets of the Company that has not been adopted by at least two-thirds of the full board of directors must be approved
by the affirmative vote of holders of 80% of the outstanding shares of the Company.

    	2

    	 

    

Business
Combinations with Interested Shareholders

 

The
South Carolina business combination statute provides that a 10% or greater shareholder of a South Carolina corporation cannot
engage in a “business combination” (as defined in the statute) with such corporation for a period of two years following
the date on which the 10% shareholder became such, unless the business combination or the acquisition of shares is approved by
a majority of the disinterested members of such corporation’s board of directors before the 10% shareholder’s share
acquisition date. This statute further provides that at no time (even after the two-year period subsequent to such share acquisition
date) may the 10% shareholder engage in a business combination with the relevant corporation unless certain approvals of the board
of directors or disinterested shareholders are obtained or unless the consideration given in the combination meets certain minimum
standards set forth in the statute. This law is very broad in its scope and is designed to inhibit unfriendly acquisitions, but
it does not apply to corporations whose articles contain a provision electing not to be covered by the law. Our Articles of Incorporation
do not contain such a provision and, in fact, expressly provide that the business combination statute applies to the Company,
but our Articles of Incorporation could be amended to include such an opt-out provision.

 

Advance
Notice Requirement for Shareholder Proposals and Director Nominations

 

Our
Bylaws establish advance notice procedures with regard to shareholder proposals, generally providing that, in connection with
an annual meeting of shareholders, a shareholder must submit notice of such shareholder’s proposal not less than 30 or more
than 60 days in advance of the annual meeting. In connection with any such notice, a shareholder must provide certain information,
including: (i) a description of the business desired to be brought before the annual meeting (including the specific proposal(s)
to be presented) and the reasons for conducting such business at the annual meeting; (ii) the name and record address of the shareholder
proposing such business; (iii) the class and number of shares of the Company that are owned of record, and the class and number
of shares of the Company that are held beneficially, but not held of record, by the shareholder as of the record date for the
meeting, if such date has been made publicly available, or as of a date within ten days of the effective date of the notice by
the shareholder if the record date has not been made publicly available; and (iv) any interest of the shareholder in such business.
We may reject a shareholder proposal that is not made in accordance with the procedures set forth in our Bylaws. These provisions
could reduce the likelihood that a third party would propose business to be brought before an annual meeting.

 

Our
Bylaws also establish advance notice procedures with regard to shareholder director nominations, providing that such nominations
must be made in writing to the secretary of the Company no later than 90 days in advance of the annual meeting. Each such notice
must set forth: (i) the name and address of the shareholder who intends to make the nomination and of the person or persons to
be nominated; (ii) a representation that the shareholder is a holder of record of stock of the Company entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;
(iii) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (iv) such other
information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the SEC, had the nominee been nominated, or intended to be nominated, by the board of directors;
and (v) the consent of each nominee to serve as a director of the Company if so elected. We may reject a shareholder director
nomination that is not made in accordance with the procedures set forth in our Bylaws. These provisions could reduce the likelihood
that a third party would nominate and elect individuals to serve on our board of directors.

 

Exclusive
Forum Provision

 

Our
Bylaws contain an exclusive forum provision. Under such provision, unless we consent in writing to the selection of an alternative
forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action
asserting a claim of breach of a fiduciary duty owed by any director or officer or other employee of the Company to the Company
or its shareholders, (iii) any action asserting a claim against the Company or any director or officer or other employee of the
Company arising pursuant to any provision of the South Carolina Business Corporation Act or our Articles of Incorporation or Bylaws
(as either may be amended from time to time), or (iv) any action asserting a claim against the Company or any director or officer
or other employee of the Company governed by the internal affairs doctrine shall be the United States District Court for the District
of South Carolina, Greenville Division (or, if such court shall not have jurisdiction a state court located within the State of
South Carolina). This exclusive forum bylaw is intended to assist us in avoiding costly and unnecessary sometimes lawyer-driven
litigation, where multiple lawsuits are being filed in multiple jurisdictions regarding the same matter. By limiting the ability
of third parties and our shareholders to file lawsuits relating to intra-corporate disputes in the forum of their choosing, this
exclusive forum bylaw could increase the costs to a plaintiff of bringing such a lawsuit and could have the effect of deterring
such lawsuits, which could include potential takeover-related lawsuits. This exclusive forum bylaw does not apply to actions arising
under the Securities Act or Exchange Act and we will provide investors written disclosure confirming that this provision does
not apply to such actions in future periodic filings with the SEC.

    	3SEE REVERSE FOR IMPORTANT NOTICE REGARDING OWNERSHIP AND TRANSFER RESTRICTIONS AND CERTAIN OTHER INFORMATION

NO PAR VALIUE

INCORPORATED UNDER THE LAWS OF THE STATE OF SOUTH CAROLINA

CUSIP	386627  30  1

COMMON STOCK	SEE REVERSE FOR CERTAIN DEFINITIONS

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
GrandSouth Bancorporation
Grandsouth.Bancorporation (hereinafter called the "Company"), transferable on the books of the Company in person or by duly authorized attorney, upon surrender
of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Articles of Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.

WITNESS the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.

Chief Financial Officer	President

    	 

    	 

    

JT TEN

 	Shares of  the  common  stock  represented  by  this  certificate  and  do  hereby  irrevocably constitutes  and  appoint

Attorney, to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.

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