California 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 California Statement or Legend on Stock Certificate, specifically the Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption, serves as an important disclosure and restriction on the transferability of stock certificates in California. This statement or legend is typically found on stock certificates issued for companies that qualify for an Intrastate Exemption under California securities laws. The purpose of this legend is to inform the holder of the stock certificate that the stock is not registered with the Securities and Exchange Commission (SEC) and can only be sold or transferred to California residents in compliance with specific regulations governing intrastate offerings. Intrastate offerings are exempt from federal registration requirements but subject to certain conditions under California law. These conditions include limitations on resale and transferability outside of California. The Notice of Restriction on Transfer signifies that the stock being transferred or sold must only be done within the state boundaries of California. There are different types of California Statements or Legends on Stock Certificates related to the Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption. These variations may include: 1. Standard California Notice of Restriction on Transfer: This legend clearly outlines that the stock certificate is not registered with the SEC and can only be transferred or sold to California residents in accordance with applicable intrastate exemption rules. 2. California Intrastate Exemption — Resale Prohibited: This type of statement emphasizes that the stock certificate can only be sold once and not resold to any other party, maintaining the restriction on transferability beyond the initial transaction. 3. California Intrastate Exemption — Limited Resale: In this case, the stock certificate may be resold or transferred to other parties, but only under certain conditions, such as to California residents who are also eligible for the intrastate exemption, ensuring compliance with state regulations. It is essential for stockholders, investors, and potential buyers to carefully review and understand the California Statement or Legend on Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption. Adhering to these restrictions is crucial to comply with California securities laws and to ensure the legality of any stock transfers or sales within the state.

The California Statement or Legend on Stock Certificate, specifically the Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption, serves as an important disclosure and restriction on the transferability of stock certificates in California. This statement or legend is typically found on stock certificates issued for companies that qualify for an Intrastate Exemption under California securities laws. The purpose of this legend is to inform the holder of the stock certificate that the stock is not registered with the Securities and Exchange Commission (SEC) and can only be sold or transferred to California residents in compliance with specific regulations governing intrastate offerings. Intrastate offerings are exempt from federal registration requirements but subject to certain conditions under California law. These conditions include limitations on resale and transferability outside of California. The Notice of Restriction on Transfer signifies that the stock being transferred or sold must only be done within the state boundaries of California. There are different types of California Statements or Legends on Stock Certificates related to the Notice of Restriction on Transfer — Stock noRegisteredre— - Intrastate Exemption. These variations may include: 1. Standard California Notice of Restriction on Transfer: This legend clearly outlines that the stock certificate is not registered with the SEC and can only be transferred or sold to California residents in accordance with applicable intrastate exemption rules. 2. California Intrastate Exemption — Resale Prohibited: This type of statement emphasizes that the stock certificate can only be sold once and not resold to any other party, maintaining the restriction on transferability beyond the initial transaction. 3. California Intrastate Exemption — Limited Resale: In this case, the stock certificate may be resold or transferred to other parties, but only under certain conditions, such as to California residents who are also eligible for the intrastate exemption, ensuring compliance with state regulations. It is essential for stockholders, investors, and potential buyers to carefully review and understand the California Statement or Legend on Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption. Adhering to these restrictions is crucial to comply with California securities laws and to ensure the legality of any stock transfers or sales within the state.