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

At a glance

Requirements one by one

Articles, regulations, and adoption routes

Ohio expressly authorizes transfer conditions and restrictions in corporate regulations. Section 1701.11(B)(8) reaches both certificated and uncertificated securities and the shares they represent. Section 1701.04(B)(4)-(5) permits the articles to contain a lawful provision regulating corporate or shareholder authority and any provision that may be placed in the regulations.

Regulations use the adoption route that fits the corporation's records. Section 1701.11(A)(1) permits initial-director adoption within 90 days after formation; a shareholder-meeting vote by a majority of voting power, subject to a stated higher requirement; written consent by two-thirds, subject to an authorized greater or lesser proportion not below a majority; or director action if the articles or regulations authorize it without divesting or limiting shareholder power.

The surveyed provisions state no separate consent rule for shares issued before a restriction is adopted. That makes the actual articles, regulations, written agreement, amendment history, share form, notice, and holder knowledge necessary; the certificate statement alone does not establish that the underlying restriction was lawfully adopted.

Certificate statements and the five-day copy duty

For a certificated security, Section 1701.25(B) requires more than a generic restricted-shares label. The face or back must provide one of four alternatives: the full terms; a summary plus a promise to send a free copy within five days of a written request; identification of the articles, regulations, or a corporation-party writing plus that free-copy promise; or identification of another writing by title, date, and parties.

Section 1701.25(C) makes the promised copy a corporate duty and permits delivery by mail, overnight delivery, or another communication method authorized by the shareholder. The section describes how a writing is disclosed; it does not make every restriction found in a writing substantively lawful.

Uncertificated securities, knowledge, and transferee effect

Section 1701.25(B) incorporates the UCC rule in Section 1308.11. A restriction imposed by the issuer, even if otherwise lawful, is ineffective against a person without actual knowledge unless a certificate conspicuously notes it or, for an uncertificated security, the registered owner has been notified (§ 1308.11(A)).

For a certificated share, the corporation-law provision adds its specified statement choices to that conspicuous-notice rule. The surveyed provisions state ineffectiveness against a transferee; they do not create a separate successor or fiduciary class, void the transfer, or provide a damages, valuation, funding, or injunction formula (§§ 1701.25(B) and 1308.11(A)-(B)).

What trips people up

Ohio separates adoption, certificate detail, and UCC notice. A regulation must clear the applicable Section 1701.11 adoption route. A certificated share then needs one of Section 1701.25(B)'s detailed statements, and Section 1308.11 separately protects a person without actual knowledge when conspicuous certificate notice or registered-owner notice is missing.

A reference to an agreement is a notice route, not a blanket validity rule. Section 1701.25(B)(3)-(4) lets the certificate point to a corporation-party writing or another writing identified by title, date, and parties. The statute still conditions transferee effect on compliance with Section 1308.11 and does not say every referenced term is lawful.

The public-company control-share branch is different. Section 1701.11(B)(9) addresses restrictions involving issuing public corporations and certain control-share acquisitions. This page covers an ordinary private corporation and does not import that takeover branch into its answer.

Common questions

Must the entire restriction appear on an Ohio share certificate?

No. Section 1701.25(B) permits the full terms, a summary plus a free-copy promise, a reference to the articles, regulations, or corporation-party writing plus that promise, or identification of another writing by title, date, and parties.

How quickly must the corporation send a requested copy?

When the certificate uses the summary or source-reference alternative that includes a copy promise, Sections 1701.25(B)-(C) require the corporation to send the copy without charge within five days after receiving the shareholder's written request.

Does Ohio prescribe a buyout price for restricted shares?

Sections 1701.04, 1701.11, 1701.25, and 1308.11 provide authority and notice rules but no purchase price, valuation method, funding mechanism, or appraisal procedure for a bespoke restriction.

Can an Ohio transfer restriction apply to uncertificated securities?

Yes. Section 1701.11(B)(8) reaches conditions on uncertificated securities, and Section 1308.11(A)(2) makes registered-owner notice the ordinary substitute for a conspicuous certificate notation.

Statutes and sources

• Ohio Rev. Code § 1701.04(B)(4)-(5) — lawful authority-regulating article provisions and the article route for provisions permitted in regulations. Official 136th General Assembly H.B. 96 enrolled act, accessed August 26, 2026.
• Ohio Rev. Code § 1701.11(A)(1), (B)(8) — regulation adoption routes and authority for certificated- and uncertificated-share transfer conditions and restrictions. Official 130th General Assembly S.B. 202 enrolled act, accessed August 26, 2026.
• Ohio Rev. Code § 1701.25(B)-(C) — transferee effect, four certificate statement alternatives, and the free-copy duty. Official 124th General Assembly H.B. 278 enrolled act, accessed August 26, 2026.
• Ohio Rev. Code § 1308.11(A)-(B) — actual knowledge, conspicuous certificate notation, registered-owner notice for uncertificated securities, and issuer-lien notice. Official 122nd General Assembly H.B. 170 enrolled act, accessed August 26, 2026.