Transfer restriction

Also called: transfer restrictions, restriction on transfer

In one line

Rules in your equity documents that limit when, to whom and how you can sell or transfer your private shares.

In plain English

Private shares aren't freely tradable. Your agreements can require company approval, restrict who can buy, impose a ROFR, or ban transfers entirely until an exit.

If you were explaining it to a 5-year-old

The toy club has rules: you can't just give your toy to anyone — you need permission, and some kids aren't allowed to buy at all.

Why it matters when you sell

These restrictions decide whether a sale is even possible. Reading them is the very first thing to do before planning any secondary.

Put it to use

Can I sell before exit?

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Sources

A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.

Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.

Transfer restriction

Related terms

Put it to use