Where must restrictions on the transfer of shares in a close corporation appear to be binding on a purchaser in good faith?
Restrictions on the right to transfer shares in a close corporation must appear in three mandatory locations to be binding on any purchaser in good faith (SEC. 97, Revised Corporation Code of the Philippines). These restrictions must be explicitly stated in the articles of incorporation. They must also be included in the corporate bylaws. Finally, the restrictions must conspicuously appear in the certificate of stock itself. Failure to include the restriction in all three documents renders the restriction non-binding on a good faith purchaser.
02 November 2025
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