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

At a glance

Requirements one by one

Authorized records and earlier-issued shares

Miss. Code § 79-4-6.27 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, “shares” 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 79-4-6.27 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.

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

Corporate and UCC notice rules

An authorized 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, § 79-4-6.27 says it is not enforceable against a person without knowledge.

Miss. Code § 75-1-202 defines UCC “knowledge” as actual knowledge. Section 75-8-204 likewise 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, § 79-4-6.26 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 information, including restriction information.

What trips people up

Earlier-share assent and transferee notice are separate gates. Party status or a favorable vote determines whether an after-adopted restriction affects an earlier-issued share. Certificate or uncertificated-share notice, and actual knowledge, determine effectiveness against a later person.

The information statement and UCC notification must reach the right record. The corporation statute requires a written statement after an uncertificated issue or transfer, while § 75-8-204 speaks specifically of notifying the registered owner. A restriction agreement alone does not replace either statutory notice inquiry for a person without actual knowledge.

Status and exemption authority do not supply transaction mechanics. A restriction may serve those purposes, but the actual instrument must provide its ownership, trigger, acquisition, price, and process terms within the statute's limits.

Common questions

May a Mississippi restriction appear in the bylaws?

Yes. Section 79-4-6.27 expressly names the bylaws, along with the articles and the two shareholder-agreement routes. The earlier-share party-or-vote rule still applies.

May Mississippi require the corporation to buy restricted shares?

Yes. Section 79-4-6.27 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.

Does the statute reach convertible securities?

Yes. Section 79-4-6.27 includes a security convertible into or carrying a right to subscribe for or acquire shares.

Can Mississippi shares be issued without certificates?

Yes, unless the articles or bylaws provide otherwise. Section 79-4-6.26 preserves existing certificates until surrender and requires the written information statement after an uncertificated issuance or transfer.

Statutes and sources

• Miss. Code § 79-4-6.27 — authorized records, earlier-share assent, permitted purposes and forms, manifest-unreasonableness limits, covered securities, certificate or information-statement notice, knowledge, and holder/transferee enforcement. Official Code of Mississippi Annotated Title 79, accessed August 26, 2026.
• Miss. Code § 79-4-6.26 — board authorization of uncertificated shares, surrender of existing certificates, and the written information statement. Official Code of Mississippi Annotated Title 79, accessed August 26, 2026.
• Miss. Code §§ 75-1-202 and 75-8-204 — actual knowledge and the UCC effectiveness rule for issuer-imposed restrictions on certificated and uncertificated securities. Official Code of Mississippi Annotated Title 75, accessed August 26, 2026.