Such as limiting stock ownership to natural persons, and if so, only up to a certain share/percentage per person?

To, for example, prevent that any one person gains a controlling interest?

  • I believe it's possible to issue different classes of shares with different voting rights, some of which are privately owned, and thus ensure that control of a company remains with a small number of people. However such restrictions have a serious impact on the willingness of other people to invest and thus on the price. Commented May 4 at 21:29
  • 2
    If this is about retaining control, the company can issue non voting stock shares publicly only. If this is about not allowing any single person to take too much control, I the articles of incorporation can specify the rule of voting by capping voting rights. (Can't think of anything prohibiting this, but I may be wrong.)
    – xuhdev
    Commented May 5 at 1:32

3 Answers 3


No, generally publicly traded shares are governed by the law and the stock exchange rules where they're listed. That's what "publicly" means.


There are techniques used to limit stock purchases when publicly traded companies are concerned about hostile takeovers. They are changes implemented by the Board of Directors which initiate some type of defensive strategy in the event that an outside entity acquires a specified ownership interest. These are known as poison pills.

An example would be a provision that says if an entity acquires more than 10% of the shares in the company, then the company will issue additional shares to all shareholders except the one which acquired 10%. This would dilute the acquirer's ownership to less than 10%.

As described in the reference, poison pills have been used by Twitter, Papa John's, and Netflix in recent years.


Even if it's legal, it would be difficult to enforce effectively. Say you could limit any one person to owning no more than, whatever, say 5%. What would stop a rich person who wants to take over your company from getting 10 friends, each buy 5%, and now between him and his friends they own 55%? What would stop the rich person from hiring 10 random people, giving them each the money to buy the stock, and then they each buy stock in their own name but he controls it?

Never mind the mechanics of how you would prevent a sale. If Al offers to sell shares to Bob and Bob already owns 5%, how would you stop him?

Depending on what restrictions you tried to put on stock ownership, you might run into anti-discrimination laws. Like a blatant case would be if you said that black people are not allowed to buy your stock.

So I'm not aware of a specific law against this, and I couldn't find one in an (admittedly brief) web search. But it would be tough to really make it effective anyway.

  • Would or wouldn't?
    – littleadv
    Commented May 8 at 8:16
  • @littleadv Sorry, I meant "would". Brain freeze. Fixed.
    – Jay
    Commented May 8 at 15:11

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