Reference no: EM131948250
Select the best answer, and why.
CASE: Lea, Cindy, and Dana form Dine Inc. (LCD), a closely held corporation, and agree to restrict the transfer of its stock to anyone else.
A reasonable purpose for a stock transfer restriction in a closely held corporation, like the agreement between Lea, Cindy, and Dana, is
1. an attempt to restrain the free flow of commerce among investors.
2. a wish to restrict the transfer of the shareholders' physical assets.
3. a desire to limit the participation of outsiders in the firm.
4. a goal to restrain insiders from taking advantage of their position.
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A desire to limit the participation of outsiders in the firm
: CASE: Lea, Cindy, and Dana form Dine Inc. (LCD), a closely held corporation, and agree to restrict the transfer of its stock to anyone else.
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