2023 Wisconsin Statutes & Annotations › Chapter 180 - Business corporations. › 180.0627 - Restriction on transfer of shares and other securities.

180.0627
Restriction on transfer of shares and other securities.
(1)
In this section:
(a)
“Other securities" include securities that are convertible into or carry a right to subscribe for or acquire shares.
(b)
“Transfer restriction" means a restriction on the transfer or registration of transfer of shares and other securities of a corporation.
(2)
(a)
Except as provided in par. (b), the articles of incorporation, bylaws, an agreement among shareholders and holders of other securities, or an agreement between shareholders and holders of other securities and the corporation may impose a transfer restriction on shares and other securities of the corporation for any reasonable purpose, including but not limited to any of the following purposes:
1.
Maintaining the corporation's status when it is dependent on the number or identity of its shareholders.
2.
Preserving exemptions under federal or state securities law.
(b)
A transfer restriction may not affect shares and other securities issued before the restriction is adopted unless the holders of the shares and other securities are parties to the transfer restriction agreement or vote in favor of the transfer restriction.
(3)
A transfer restriction is valid and enforceable against the holder or a transferee of the holder if the transfer restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by s. 180.0626 (2). Unless so noted, a transfer restriction is not enforceable against a person who does not know of the transfer restriction.
(4)
The transfer restrictions permitted under this section include, but are not limited to, transfer restrictions that do any of the following:
(a)
Obligate the shareholder or holder of other securities first to offer the corporation or other persons, whether separately, consecutively or simultaneously, an opportunity to acquire the restricted shares or other securities.
(b)
Obligate the corporation or other persons, whether separately, consecutively or simultaneously, to acquire the restricted shares or other securities.
(c)
Require the corporation, the holders of any class of its shares or other securities or another person to approve the transfer of the restricted shares or other securities, if the requirement is not manifestly unreasonable.
(d)
Prohibit the transfer of the restricted shares or other securities to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.
History:  1989 a. 303.
If a right-of-refusal renders the sale of stock impossible to anyone except to the corporation at whatever price the corporation wishes to pay, it is illegal. However, requiring a right-of-refusal at book value, if that book value is honestly calculated, does not guarantee a sale to the corporation at whatever price the corporation wishes to pay. Additionally, the failure to require fair market value does not amount to a breach of fiduciary duty. Dewey v. Bechthold, 384 F. Supp. 3d 971 (2019).