Arkansas Statement or Legend on Stock Certificate - Notice of Restriction on Transfer - Stock not Registered - Intrastate Exemption

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• Control #: US-1057BG
• Format: Word; Rich Text

Description

A Legend is a statement on a stock certificate noting restrictions on the transfer of the stock, often due to SEC requirements for unregistered securities. The Securities Act of 1933 regulates the initial sale of securities to the public. Some securities are exempt from coverage of the Act. Certain stock issue transactions are also exempt (i.e., exempt from registration with the Securities and Exchange Commission). The most common exempt transaction that close corporations take advantage of is the intrastate offering. To qualify for this exemption, both the investors and the issuer must all be residents of the same state. The issuer must also meet the following requirements: • 80% of its assets must be located in the state; • 80% of its income must be earned from operations within the state; and • 80% of the proceeds from the sale must be used on operations within the state. Also, for nine months after the issuance, the stock can only be sold to state residents. The Arkansas Statement or Legend on a stock certificate, specifically the "Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption," serves as an important provision regulating the transfer of stock within the state of Arkansas. This exceptional statement or legend denotes specific restrictions and requirements that must be adhered to in order to comply with Arkansas state securities laws. When a stock certificate bears this statement or legend, it signifies that the stock is not registered with the Securities and Exchange Commission (SEC) and therefore falls under the intrastate exemption. This exemption allows the stock to be traded and transferred exclusively within the boundaries of Arkansas, subject to certain conditions and limitations. The purpose of this restriction on transfer is to safeguard investors and maintain transparency within the local stock market. It ensures that the buyers of stocks covered by this legend are aware that the securities are exempt from SEC registration, implying potential risks associated with investing in unregistered securities. It should be noted that there might be variations or different types of Arkansas Statements or Legends on Stock Certificates, such as: 1. Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption (Class A): This version of the statement specifically applies to "Class A" stocks, denoting a particular class or category of stock with distinct characteristics or shareholder rights. The restrictions and obligations outlined within this legend pertain only to Class A stocks. 2. Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption (Class B): Similar to the previous type, this statement exclusively applies to "Class B" stocks, which might possess different rights or characteristics compared to Class A stocks. The restrictions and requirements detailed in this legend are specific to Class B stocks. 3. Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption (Non-Voting): This variation of the statement is intended for stocks that carry no voting rights. While the ownership and transfer of these stocks are still subject to the intrastate exemption, the legend emphasizes the absence of voting privileges associated with this particular class of securities. In conclusion, the Arkansas Statement or Legend on a stock certificate, specifically the "Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption," is a crucial provision that enforces regulatory measures within the state's securities market. By clearly indicating that the stock is unregistered and subject to intrastate trading limitations, this legend helps protect investors and promote compliance with Arkansas state securities laws.

The Arkansas Statement or Legend on a stock certificate, specifically the "Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption," serves as an important provision regulating the transfer of stock within the state of Arkansas. This exceptional statement or legend denotes specific restrictions and requirements that must be adhered to in order to comply with Arkansas state securities laws. When a stock certificate bears this statement or legend, it signifies that the stock is not registered with the Securities and Exchange Commission (SEC) and therefore falls under the intrastate exemption. This exemption allows the stock to be traded and transferred exclusively within the boundaries of Arkansas, subject to certain conditions and limitations. The purpose of this restriction on transfer is to safeguard investors and maintain transparency within the local stock market. It ensures that the buyers of stocks covered by this legend are aware that the securities are exempt from SEC registration, implying potential risks associated with investing in unregistered securities. It should be noted that there might be variations or different types of Arkansas Statements or Legends on Stock Certificates, such as: 1. Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption (Class A): This version of the statement specifically applies to "Class A" stocks, denoting a particular class or category of stock with distinct characteristics or shareholder rights. The restrictions and obligations outlined within this legend pertain only to Class A stocks. 2. Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption (Class B): Similar to the previous type, this statement exclusively applies to "Class B" stocks, which might possess different rights or characteristics compared to Class A stocks. The restrictions and requirements detailed in this legend are specific to Class B stocks. 3. Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption (Non-Voting): This variation of the statement is intended for stocks that carry no voting rights. While the ownership and transfer of these stocks are still subject to the intrastate exemption, the legend emphasizes the absence of voting privileges associated with this particular class of securities. In conclusion, the Arkansas Statement or Legend on a stock certificate, specifically the "Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption," is a crucial provision that enforces regulatory measures within the state's securities market. By clearly indicating that the stock is unregistered and subject to intrastate trading limitations, this legend helps protect investors and promote compliance with Arkansas state securities laws.