CO Code § 4-8-401 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 8 - Investment Securities|Part 4 - Registration|§ 4-8-401. Duty of Issuer to Register Transfer

  If a certificated security in registered form is presented to an issuer with a request to register transfer or an instruction is presented to an issuer with a request to register transfer of an uncertificated security, the issuer shall register the transfer as requested if:   Under the terms of the security the person seeking registration of transfer is eligible to have the security registered in its name;    The indorsement or instruction is made by the appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;    Reasonable assurance is given that the indorsement or instruction is genuine and authorized (section 4-8-402);    Any applicable law relating to the collection of taxes has been complied with;    The transfer does not violate any restriction on transfer imposed by the issuer in accordance with section 4-8-204;    A demand that the issuer not register transfer has not become effective under section 4-8-403, or the issuer has complied with section 4-8-403 (b) but no legal process or indemnity bond is obtained as provided in section 4-8-403 (d); and    The transfer is in fact rightful or is to a protected purchaser.       If an issuer is under a duty to register a transfer of a security, the issuer is liable to a person presenting a certificated security or an instruction for registration or to the person's principal for loss resulting from unreasonable delay in registration or failure or refusal to register the transfer.     History. Source: L. 96: Entire article R&RE, p. 223, § 2, effective July 1.    Cross references:   For offenses relating to this title, see part 5 of article 5 of title 18.   Official Comments   Copyright by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. Reproduced with the permission of the Permanent Editorial Board for the Uniform Commercial Code. All rights reserved. —   Editor's note:   The Official Comments to the Uniform Commercial Code are available only in the printed book form of Colorado Revised Statutes. As noted above, the Official Comments are subject to copyright by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. At this time, Colorado has a license to reprint the Official Comments in the printed book form.   Editor's note:    The numbering and sequencing of C.R.S. subsections do not necessarily correspond with the numbering and sequencing of subsections in the uniform act.    This article was numbered as article 8 of chapter 155, C.R.S. 1963. The provisions of this article were repealed and reenacted in 1996, resulting in the addition, relocation, and elimination of sections as well as subject matter. For amendments to this article prior to 1996, consult the Colorado statutory research explanatory note and the table itemizing the replacement volumes and supplements to the original volume of C.R.S. 1973 beginning on page vii in the front of this volume. Former C.R.S. section numbers are shown in editor's notes following those sections that were relocated. For a detailed comparison, see the “Table of Disposition of Sections in Prior Versions” in the prefatory note at the beginning of this article.     Law reviews:   For article, “Limited Partnership Interests as Uncertificated Securities”, see 13 Colo. Law. 1194 .   Editor's note:   This section is similar to former § 4-8-401 as it existed prior to 1996.   OFFICIAL COMMENT   1. This section states the duty of the issuer to register transfers. A duty exists only if certain preconditions exist. If any of the preconditions do not exist, there is no duty to register transfer. If an indorsement on a security certificate is a forgery, there is no duty. If an instruction to transfer an uncertificated security is not originated by an appropriate person, there is no duty. If there has not been compliance with applicable tax laws, there is no duty. If a security certificate is properly indorsed but nevertheless the transfer is in fact wrongful, there is no duty unless the transfer is to a protected purchaser (and the other preconditions exist).   This section does not constitute a mandate that the issuer must establish that all preconditions are met before the issuer registers a transfer. The issuer may waive the reasonable assurances specified in paragraph (a)(3). If it has confidence in the responsibility of the persons requesting transfer, it may ignore questions of compliance with tax laws. Although an issuer has no duty if the transfer is wrongful, the issuer has no duty to inquire into adverse claims, see Section 8-404.   2. By subsection (b) the person entitled to registration may not only compel it but may hold the issuer liable in damages for unreasonable delay.   3. Section 8-201(c) provides that with respect to registration of transfer, “issuer” means the person on whose behalf transfer books are maintained. Transfer agents, registrars or the like within the scope of their respective functions have rights and duties under this Part similar to those of the issuer. See Section 8-407.   Definitional Cross References:   “Appropriate person”. Section 8-107   “Certificated security”. Section 8-102(a)(4)   “Genuine”. Section 1-201(18)   “Indorsement”. Section 8-102(a)(11)   “Instruction”. Section 8-102(a)(12)   “Issuer”. Section 8-201   “Protected purchaser”. Section 8-303   “Registered form”. Section 8-102(a)(13)   “Uncertificated security”. Section 8-102(a)(18)   ANNOTATION   Annotator's note. The following annotations include cases decided under former provisions similar to this section.   Under this section an issuer has a duty to register the transfer of securities as requested if certain preconditions are clearly met. Dempsey-Tegeler & Co. v. Otis Oil & Gas Corp., 293 F. Supp. 1383 (D. Colo. 1968 ).   The transfer of cancelled certificates is not rightful. Where evidence establishes that stock certificates are no longer valid, having been cancelled on the books of the company, and no evidence is offered to contradict the correctness of the company records or to establish that the certificates are in fact valid, there is not a rightful transfer, since transfer of cancelled, invalidated, certificates does not constitute a rightful transfer. Folsom v. Sec. Nat'l Bank, 32 Colo. App. 91, 507 P.2d 1114 (1973).   The court could not conclude, as a matter of law, that a transfer agent was immune from liability absent a legal opinion that the proposed transfer was permissible. Am. Sec. Transfer, Inc. v. Pantheon Indus., Inc., 871 F. Supp. 400 (D. Colo. 1994 ).   Request to reissue a stock certificate without the restrictive legend is considered a “request to transfer shares” within the meaning of this section. Therefore it falls within the duties of § 4-8-406 . Am. Sec. Transfer, Inc. v. Pantheon Indus., Inc., 871 F. Supp. 400 (D. Colo. 1994 ).   This section preempts common law remedies relating to the placement and removal of restrictive legends. Clancy Sys. Int'l, Inc. v. Salazar, 177 P.3d 1235 (Colo. 2008).   A party requesting reissuance of a stock certificate cannot claim status as a purchaser for value. Am. Sec. Transfer, Inc. v. Pantheon Indus., Inc., 871 F. Supp. 400 (D. Colo. 1994 ).   Former provisions voided all transfers unless they were recorded on the books of the company within 60 days. Conway v. John, 14 Colo. 30 , 23 P. 170 (1890); Weber v. Bullock, 19 Colo. 214 , 35 P. 183 (1893); First Nat'l Bank v. Hastings, 7 Colo. App. 129, 42 P. 691 (1895); Nat'l Bank v. Graham, 16 Colo. App. 498, 66 P. 684 (1901); Richardson v. Longmont Supply Ditch Co., 19 Colo. App. 483, 76 P. 546 (1904); Isbell v. Graybill, 19 Colo. App. 508, 76 P. 550 (1904); Equitable Sec. Co. v. Johnson, 36 Colo. 377 , 85 P. 840 (1906); Pueblo Sav. Bank v. Richardson, 39 Colo. 319 , 89P. 799 (1907); Central Sav. Bank v. Smith, 43 Colo. 90 , 95 P. 307 (1908); O'Neil v. Wolcott Mining Co., 174 F. 527 (8th Cir. 1909); Shires v. Allen, 47 Colo. 440 , 107 P. 1072 (1910); Ironstone Ditch Co. v. Equitable Sec. Co., 52 Colo. 268 , 121 P. 174 (1911); Lucifer Coal Co. v. Buster, 64 Colo. 179 , 171 P. 61 (1918); Carlton v. Camfield, 64 Colo. 373 , 171 P. 1140 (1918); Hexter v. Shahan, 66 Colo. 156 , 180 P. 92 (1919); Valleyview Consol. Gold Mining Co. v. Whitehead, 66 Colo. 237 , 180 P. 737 (1919); Capitol Petroleum Co. v. Haldeman, 66 Colo. 265 , 180 P. 758 (1919); Snider v. Bourquin, 68 Colo. 207 , 188 P. 727 (1920); McClelland v. Merchants' Miners' Nat'l Bank, 77 Colo. 30 2, 236 P. 774 (1925); Hawkins v. Hershey, 78 Colo. 539 , 242 P. 975 (1925); Mulvihill v. First Nat'l Bank, 80 Colo. 72 , 249 P. 504 (1926); Hollingsworth v. Multa Trina Ditch Co., 51 F.2d 649 (10th Cir. 1931); Hertz Drive-Ur-Self Sys. v. Doak, 94 Colo. 200 , 29 P.2d 625 (1934) (decided under repealed C.L. 1921, § 2268 and laws antecedent thereto).