After an heir inherits the equity, can the company restrict their transfer of it?
A measured restriction is permissible. The succession clause may provide that “if the heir transfers the equity within X years of acquiring shareholder qualification, the other shareholders have a right of first refusal on equal terms”—this mirrors the preemptive-rights rule under Article 84 of the Company Law and is generally upheld. A complete prohibition on transfer, however, carries higher risk and is not recommended.
