GA Code § 11-8-204 (2021)
2021 Georgia Code|Title 11 - Commercial Code|Article 8 - Investment Securities|Part 2 - Issue and Issuer|§ 11-8-204. Effect of Issuer's Restriction on Transfer

 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:    The security is certificated and the restriction is noted conspicuously on the security certificate; or   The security is uncertificated and the registered owner has been notified of the restriction.     (Code 1981, §11-8-204, enacted by Ga. L. 1998, p. 1323, § 1.)   Law reviews.   - For article, "Restricting the Transferability of Stock in Georgia Corporations," see 5 Mercer L. Rev. 242 (1954).   JUDICIAL DECISIONS   Liability of transfer agent.    - The class of persons for whom information regarding restrictions on the transfer of certificated securities was intended, either directly or indirectly, includes, at a minimum, those who regularly buy and sell such securities and those who regularly accept pledges of such securities as collateral for loans, margin accounts and similar transactions; as a result, a broker-dealer's complaint stated a cause of action for negligent misrepresentation for a transfer agent's failure to disclose restrictions on the transfer of stock certificates. Neidiger/Tucker•runer, Inc. v. Suntrust Bank, 242 Ga. App. 369, 530 S.E.2d 18 (2000).    Construction with § 11-8-401. - Taken together, O.C.G.A. §§ 11-8-204 and § 11-8-401 require the issuer to register a transfer presented in proper form, even if there were secret restrictions, if the purchaser or pledgee was ignorant of the restrictions. Neidiger/Tucker•runer, Inc. v. Suntrust Bank, 242 Ga. App. 369, 530 S.E.2d 18 (2000).    Cited in Brown v. Momar, Inc., 201 Ga. App. 542, 411 S.E.2d 718 (1991)(decided under former § 11-8-204 prior to 1992 repeal).   RESEARCH REFERENCES   Am. Jur. 2d.   - 15A Am. Jur. 2d, Commercial Code, § 87. 18 Am. Jur. 2d, Corporations, § 386.   C.J.S.   - 18 C.J.S., Corporations, §§ 219-225. 19 C.J.S., Corporations, § 664. 64A C.J.S., Municipal Corporations, § 1701 et seq. 81A C.J.S., States, § 186.   U.L.A.   - Uniform Commercial Code (U.L.A.) § 8-204.   ALR.    - Constructive notice to purchaser or pledgee of stock of corporation's lien thereon, 33 A.L.R. 1272.    Priority as between lien of corporation and rights of pledgee or bona fide purchaser of corporate stock, 81 A.L.R. 989.    Conflict of laws as to title and transfer of corporate stock, 131 A.L.R. 192.    Right or duty of corporation to refuse to transfer stock on books to one presenting properly endorsed certificate, because of knowledge or suspicion of conflicting rights of registered holder or of third person, 139 A.L.R. 273; 75 A.L.R.2d 746.    Uniform Stock Transfer Act as applicable to shares in savings and loan associations or building and loan associations, 143 A.L.R. 1152.   Valuation of property for purposes of estate, succession, or gift tax as affected by contract or bylaw specifying price at which property may or must be sold, purchased, or offered, 5 A.L.R.2d 1122.   Construction and effect of § 15 of Uniform Stock Transfer Act prohibiting restriction on transfer of shares unless such restriction is stated on the certificate, 29 A.L.R.2d 901.   What constitutes waiver of stockholder's or corporation's right to enforce first-option stock purchase agreement, 55 A.L.R.3d 723.   Restrictions on transfer of corporate stock as applicable to testamentary dispositions thereof, 61 A.L.R.3d 1090.