Corporate Stock-Transfer Restriction and Certificate-Legend Requirements in Maine

At a glance

Requirements one by one

General restriction authorization and earlier-issued shares

13-C M.R.S. § 628 permits a restriction in the articles of incorporation, bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation. A share issued before adoption is unaffected unless its holder is a party to the restriction agreement or voted for the restriction.

For this section, “share” includes a security convertible into or carrying a right to subscribe for or acquire shares. The instrument and security must fit the statutory authorization, and earlier-issued shares remain subject to the separate party-or-vote gate.

Permitted purposes and forms

Section 628(4) authorizes restrictions used to maintain a corporate status dependent on shareholder number or identity, preserve a federal or state securities-law exemption, or serve another reasonable purpose.

The listed forms are a first offer to the corporation or other people; an obligation for the corporation or other people to acquire the shares; approval by the corporation, holders of a class, or another person; and a prohibition involving designated people or classes. The offer and acquisition routes may operate separately, consecutively, or simultaneously. Approval and designated- person terms must not be manifestly unreasonable (13-C M.R.S. § 628(5)).

The surveyed provision does not separately prescribe an ownership percentage cap, mandatory or automatic transfer, tax-attribute or general regulatory- compliance route, purchase price, valuation formula, funding method, or remedy.

Corporate and UCC notice rules

An authorized general restriction is valid and enforceable against the holder or the holder's transferee when its existence is noted conspicuously on the front or back of the certificate or included in the written information statement for uncertificated shares. Without that notice, 13-C M.R.S. § 628(3) says it is not enforceable against a person who has no knowledge.

For Maine's UCC, 11 M.R.S. § 1-1202(2) defines “knowledge” as actual knowledge. Section 8-1204 separately makes an issuer-imposed restriction ineffective against a person without actual knowledge unless a certificated security conspicuously notes the restriction or the registered owner of an uncertificated security was notified.

Unless the articles or bylaws provide otherwise, 13-C M.R.S. § 627 lets the board authorize some or all classes or series without certificates. Existing certificates remain until surrender. Within a reasonable time after an uncertificated issue or transfer, the corporation sends the shareholder the applicable certificate and restriction information.

Unanimous shareholder-agreement overlay

13-C M.R.S. § 743 covers a special shareholder agreement. It must be in the articles or bylaws and approved by all current shareholders, or in a written agreement signed by all current shareholders and made known to the corporation. It is valid for an unlimited term unless it provides otherwise. Amendment ordinarily requires all current shareholders unless the agreement provides otherwise or the special board-elimination rule in subsection 8 governs.

The agreement's existence must be noted conspicuously on each outstanding certificate or on the uncertificated-share information statement. Existing certificates must be recalled and replaced. Missing notice does not invalidate the agreement or an action under it, but a purchaser without knowledge is entitled to rescind. Certificate or statement notice, plus delivery of the statement at or before an uncertificated purchase, deems the purchaser to have knowledge. The rescission action is due by the earlier of 180 days after discovery or two years after purchase (13-C M.R.S. § 743(3)).

The special agreement ceases to be effective when the corporation becomes a public corporation. Section 743(4) then permits a board cleanup amendment without shareholder action when the agreement was contained or referred to in the articles or bylaws.

What trips people up

Maine's discovery period is 180 days. The special-agreement purchaser must still sue by the earlier of that discovery-based period or two years after the purchase. The general restriction provision does not supply that rescission remedy.

The general and unanimous-agreement consequences differ. Missing general restriction notice prevents enforcement against a protected person. Missing special-agreement notice does not invalidate the agreement or action under it; it creates the purchaser's time-limited rescission right.

The corporate notice is not a universal securities legend. Preserving a federal or state securities-law exemption is an authorized purpose. Restricted- securities notices, intermediary systems, transfer-agent procedure, and other UCC Article 8 rules remain separate.

Common questions

May a Maine restriction appear in the bylaws?

Yes. 13-C M.R.S. § 628(2) expressly names the bylaws. A qualifying section 743 agreement may also be placed there, but all current shareholders must approve it.

May Maine require the corporation to buy restricted shares?

Yes. Section 628(5)(B) permits a restriction obligating the corporation or other people, separately, consecutively, or simultaneously, to acquire the shares. It does not set the trigger, price, valuation method, funding, or remedy.

How long may the special shareholder agreement last?

Section 743(2) says the agreement is valid for an unlimited term unless the agreement provides otherwise. That duration rule is distinct from its notice and purchaser-rescission rules.

Can Maine shares be issued without certificates?

Yes, when the articles or bylaws do not provide otherwise. Section 627 preserves existing certificates until surrender and requires the written information statement after an uncertificated issuance or transfer.

Statutes and sources

• 13-C M.R.S. § 628(1)-(3) — covered securities, authorized records, earlier-share assent, certificate or information-statement notice, knowledge, and holder/transferee enforcement. Official Maine Revisor text, accessed August 26, 2026.
• 13-C M.R.S. § 628(4)-(5) — authorized purposes, enumerated forms and sequencing, and manifest-unreasonableness limits. Official Maine Revisor text, accessed August 26, 2026.
• 13-C M.R.S. § 627 — board authorization of uncertificated shares, surrender of existing certificates, and the written information statement. Official Maine Revisor text, accessed August 26, 2026.
• 13-C M.R.S. § 743(1)(H), (2)-(3) — unanimous-agreement form, amendment, and duration; certificate and information-statement notice; certificate recall; purchaser rescission; and limitation period. Official Maine Revisor text, accessed August 26, 2026.
• 13-C M.R.S. § 743(4) — public-corporation cutoff and board cleanup amendment. Official Maine Revisor text, accessed August 26, 2026.
• 11 M.R.S. § 1-1202(2) — actual knowledge. Official Maine Revisor UCC text, accessed August 26, 2026.
• 11 M.R.S. § 8-1204 — UCC effectiveness rule for issuer-imposed restrictions on certificated and uncertificated securities. Official Maine Revisor UCC text, accessed August 26, 2026.