Legal Question in Business Law in Texas

Consideration and sale of stock

If a shareholder transfers his/her shares to another shareholder, is there a need for consideration of money, property, or other thing of value be given to the transferring shareholder? Can ''$10.00 and other valuable consideration'' be sufficient to make this transaction valid?


Asked on 1/31/01, 11:22 am

1 Answer from Attorneys

Re: Consideration and sale of stock

The short answer is 'yes' there does need to be consideration in order to make this a valid transfer and not an outright gift. 'Ten dollars and other valuable consideration' would be sufficient, if it is in fact tendered.

Of course, there could be other things invalidating the tranfer, such as a shareholder's agreement, pre-emptive rights, or some sort of fraud.

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Answered on 3/15/01, 11:11 am


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