17-7207.   Issuance or transfer of stock of closecorporation inbreach of restrictions or conditions thereon; effect; conclusivepresumptions; transfer defined; applicability and effect of section.(a) If stock of a close corporation is issued or transferred to anyperson who is not entitled under any provision of the articles ofincorporation permitted by subsection (b) of K.S.A. 17-7202 to be a holderof record of stock of such corporation, and ifthe certificate for such stock conspicuously notes the qualifications ofthe persons entitled to be holders of record thereof, such person isconclusively presumed to have notice of the fact of his ineligibility tobe a stockholder.

      (b)   If the articles of incorporation of a close corporation statethe number of persons, not in excess of 35, who areentitled to be holders of record of its stock, and if the certificate forsuch stock conspicuously states such number, and if the issuance or transfer ofstock to any person would cause the stock to be held by more than suchnumber of persons, the person to whom such stock is issued ortransferred is conclusively presumed to have notice of this fact.

      (c)   If a stock certificate of any close corporation conspicuouslynotes the fact of a restriction on transfer of stock of the corporation,and the restriction is one which is permitted by K.S.A. 17-6426, the transfereeof the stock is conclusively presumed to havenotice of the fact that he has acquired stock in violation of therestriction, if such acquisition violates the restriction.

      (d)   Whenever any person to whom stock of a close corporation hasbeen issued or transferred has, or is conclusively presumed under thissection to have, notice either (1) that he is a person not eligible tobe a holder of stock of the corporation, or (2) that transfer of stockto him would cause the stock of the corporation to be held by more thanthe number of persons permitted by its articles of incorporation to holdstock of the corporation, or (3) that the transfer of stock is inviolation of a restriction on transfer of stock, the corporation, at itsoption, may refuse to register transfer of the stock into the name ofthe transferee.

      (e)   The provisions of subsection (d) shall not be applicable if thetransfer of stock, even though otherwise contrary to subsection (a), (b)or (c), has been consented to by all the stockholders of the closecorporation, or if the close corporation has amended its articles ofincorporation in accordance with K.S.A. 17-7206.

      (f)   The term "transfer," as used in this section, is not limited toa transfer for value.

      (g)   The provisions of this section do not impair in any way anyrights of a transferee regarding any right to rescind the transaction orto recover under any applicable warranty, express or implied.

      History:   L. 1972, ch. 52, § 131;L. 2009, ch. 23, § 1; July 1.