Check transfer restrictions before recording a private share sale

Collect the seller, proposed buyer, share class, quantity, consideration and intended closing date. Ask for the signed or proposed transfer agreement and identify whether the transfer is a sale, gift or another transaction. Give counsel the facts without assuming that a different label avoids the company's restrictions.

Keep the existing holder in the official record until the authorized transfer process is complete. A purchase agreement between two people may still leave company consents, notice periods or other conditions unresolved. Record the pending event separately so a preliminary cap-table scenario is not mistaken for completed ownership.

Delaware section 202 recognizes restrictions arising through the charter, bylaws and qualifying agreements. It also addresses how restrictions are noted on certificates or communicated for uncertificated shares. Give counsel all relevant documents, including stock purchase agreements and any later investor agreements, rather than reviewing only the certificate legend.

Ask counsel for a transaction-specific checklist identifying consent rights, first-refusal procedures, permitted-transfer conditions and required joinders where applicable. Securities-law questions and contractual enforceability require their own assessment. The company's administrator should track the resulting instructions rather than make those legal determinations.

For a notice requirement, retain the approved notice, recipient list and delivery evidence. For a consent or waiver, identify the authorized decision-maker and the executed document. Record when a response period begins and ends using counsel's interpretation of the agreement.

Do not treat silence as a waiver unless the governing terms and counsel's instructions support that conclusion. If the buyer, price or number of shares changes, ask whether earlier notices or approvals still apply. The file should show which precise transaction the recipients considered.

Check the final agreement, required endorsements or surrender documents, approvals and buyer joinders against the released instructions. Confirm the names and capacities of signers. Escalate an unexpected estate, trust or entity holder before substituting a convenient individual name.

Have counsel or the authorized transfer agent confirm that the company may register the transfer. Record the effective event and update the holder register accordingly. Deliver any new certificate or uncertificated notice through the approved process, preserving applicable restrictions in the new record.

Archive the final transfer evidence, canceled or surrendered certificate where relevant, revised register and delivered holder documents. Preserve the pre-transfer position so later voting or distribution questions can be answered for the correct date.

If the transaction does not close, label the proposal abandoned and retain the reason. Remove it from current ownership calculations without deleting the historical correspondence. A future buyer's request should start from the actual completed holdings, with the earlier uncompleted proposal visible only as history.