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

• Category: Corporations - Shareholders and Stock
• State: Multi-State
• City: Chicago
• 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. Chicago, Illinois is a vibrant city located in the Midwestern United States. It is the third-most populous city in the country and offers a diverse cultural scene, iconic architecture, and a rich history. Known for its stunning skyline, Chicago boasts world-renowned landmarks such as the Willis Tower (formerly known as the Sears Tower), Millennium Park, and Navy Pier. When it comes to the financial world, Chicago has a significant presence in the stock market. Stock certificates issued by companies based in Chicago often feature specific statements or legends, including the "Notice of Restriction on Transfer" and "Stock not Registered" indicators. These legends play a crucial role in ensuring compliance with applicable securities laws and regulations. The "Notice of Restriction on Transfer" statement on a stock certificate is used to communicate limitations and conditions on the transfer of the stock. This could include restrictions related to the shareholder's agreement, company bylaws, or regulatory requirements. By including this notice, the company informs shareholders and potential buyers about any restrictions in place. On the other hand, the "Stock not Registered" legend denotes that the stock has not been registered with the Securities and Exchange Commission (SEC) or any other regulatory body. This legend is commonly used for stocks that fall under an exemption from registration requirements, such as the intrastate exemption. The intrastate exemption refers to the exemption from federal registration requirements for securities that are only sold within the boundaries of a single state. This exemption allows companies to issue stock without going through the extensive registration process required for publicly traded companies. The inclusion of the "Intrastate Exemption" legend on a stock certificate indicates that the issuing company is taking advantage of this exemption. In summary, the Chicago, Illinois Statement or Legend on Stock Certificate includes the "Notice of Restriction on Transfer" and "Stock not Registered" legends. These legends serve to inform shareholders and potential buyers of any transfer restrictions and the exemption status of the stock. Additionally, there may be variations and specific types of legends depending on the company and their unique circumstances. It is essential for shareholders and investors to carefully review these statements to understand the limitations and regulatory compliance associated with the stock.

Chicago, Illinois is a vibrant city located in the Midwestern United States. It is the third-most populous city in the country and offers a diverse cultural scene, iconic architecture, and a rich history. Known for its stunning skyline, Chicago boasts world-renowned landmarks such as the Willis Tower (formerly known as the Sears Tower), Millennium Park, and Navy Pier. When it comes to the financial world, Chicago has a significant presence in the stock market. Stock certificates issued by companies based in Chicago often feature specific statements or legends, including the "Notice of Restriction on Transfer" and "Stock not Registered" indicators. These legends play a crucial role in ensuring compliance with applicable securities laws and regulations. The "Notice of Restriction on Transfer" statement on a stock certificate is used to communicate limitations and conditions on the transfer of the stock. This could include restrictions related to the shareholder's agreement, company bylaws, or regulatory requirements. By including this notice, the company informs shareholders and potential buyers about any restrictions in place. On the other hand, the "Stock not Registered" legend denotes that the stock has not been registered with the Securities and Exchange Commission (SEC) or any other regulatory body. This legend is commonly used for stocks that fall under an exemption from registration requirements, such as the intrastate exemption. The intrastate exemption refers to the exemption from federal registration requirements for securities that are only sold within the boundaries of a single state. This exemption allows companies to issue stock without going through the extensive registration process required for publicly traded companies. The inclusion of the "Intrastate Exemption" legend on a stock certificate indicates that the issuing company is taking advantage of this exemption. In summary, the Chicago, Illinois Statement or Legend on Stock Certificate includes the "Notice of Restriction on Transfer" and "Stock not Registered" legends. These legends serve to inform shareholders and potential buyers of any transfer restrictions and the exemption status of the stock. Additionally, there may be variations and specific types of legends depending on the company and their unique circumstances. It is essential for shareholders and investors to carefully review these statements to understand the limitations and regulatory compliance associated with the stock.