Can board of directors restrict members for transfer of shares?Discuss.

1. Director is under fiduciary duty since trust and confidence are reposed on them by shareholders, creditors and employees.
2. It shall be used in good faith by the director for the company interest as a whole.- Re Smith v. Fawcett Ltd
3. Restriction on transfer of shares must be spelled out in A/A and restriction must comply with the provisions.
4. Power to refuse a transfer must be for the interest of the company.- Australian Life Assurance Co. Ltd v. Ure
5. Shares are personal property belonging to shareholders.
6. It is movable and transferable subject to provisions in A/A.
7. If it is a private company, it can be restricted by the virtue of section 15.
8. Board of directors must give valid reason for the refusal, it must be strictly in accordance to the provisions.
9. The court will then investigate the validity of the reason. - Lim Ow Goik v. Sungei Merah Bus Co Ltd.