Fact Pattern 38-1B

question 84

Multiple Choice

Fact Pattern 38-1B
Standard Company and Typical Corporation form United, Inc., a close corporation, and agree to restrict the transfer of its stock to anyone else. SC sells its physical assets, but not its United stock, to Variety, Inc. TC files a suit against SC.
-Refer to Fact Pattern 38-1B. Ac?cording to the court in Case 38.2, Salt Lake Tribune Publishing Co. v. AT&T Corp., a reasonable purpose for a stock transfer re?striction in a close corpora?tion, like the agreement between SC and TC, is

• A) a desire to limit the participation of outsiders in the firm.
• B) a goal to restrain insiders from taking advantage of their position.
• C) an attempt to restrain the free flow of commerce among investors.
• D) a wish to restrict the transfer of the shareholders' physical assets.

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