Guam 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 Guam Statement or Legend on a Stock Certificate serves as a Notice of Restriction on Transfer, indicating that the stock is not registered and qualifies for an Intrastate Exemption. This statement or legend is important in providing information and legal protections concerning the restricted transferability of the stock. Here is a detailed description of what the Guam Statement or Legend on Stock Certificate encompasses, along with its different types: 1. Guam Statement or Legend on Stock Certificate: The Guam Statement or Legend on a Stock Certificate is a printed text or label that appears on the face or back of the certificate. It serves legal and regulatory purposes, specifically notifying the holder of the stock of certain restrictions placed on its transferability. This statement is usually found in companies that issue stock that is not registered with the U.S. Securities and Exchange Commission (SEC). 2. Notice of Restriction on Transfer: The Notice of Restriction on Transfer is a key element of the Guam Statement or Legend, drawing attention to the fact that the stock is not freely transferable. This restriction is usually imposed by the company issuing the stock to comply with state securities laws or regulations, particularly regarding Intrastate Exemptions. 3. Stock not Registered: Another crucial aspect of the Guam Statement or Legend is its disclosure that the stock is not registered with the SEC. This means that the stock is not subject to the extensive reporting and disclosure requirements imposed upon registered securities, and therefore it may not be freely traded on national securities exchanges. 4. Intrastate Exemption: The Guam Statement or Legend on Stock Certificate highlights that the stock being issued qualifies for an Intrastate Exemption. This exemption permits companies to offer and sell securities exclusively within the borders of a single state as long as specific conditions and criteria outlined by state securities laws are met. The Intrastate Exemption is often used by smaller local companies to raise capital without having to comply with the extensive regulations associated with registered securities. Different Types of Guam Statement or Legend on Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption: 1. Basic Guam Statement or Legend: This is the most common type of Guam Statement or Legend, providing a straightforward notice of restriction on transfer, highlighting the stock's unregistered status, and indicating its qualification for an Intrastate Exemption. 2. State-specific variations: Each state may have its own specific requirements or language for the Guam Statement or Legend. State securities laws may dictate unique disclosures or restrictions to be included within the statement to ensure compliance with local regulations. It is crucial for stockholders, investors, and anyone involved in stock transactions to thoroughly understand the implications of the Guam Statement or Legend on Stock Certificates. The statement serves as a protective measure for both the issuing company and the stockholder, conveying important information about the restricted nature of the stock's transferability and its compliance with applicable intrastate exemption requirements.

The Guam Statement or Legend on a Stock Certificate serves as a Notice of Restriction on Transfer, indicating that the stock is not registered and qualifies for an Intrastate Exemption. This statement or legend is important in providing information and legal protections concerning the restricted transferability of the stock. Here is a detailed description of what the Guam Statement or Legend on Stock Certificate encompasses, along with its different types: 1. Guam Statement or Legend on Stock Certificate: The Guam Statement or Legend on a Stock Certificate is a printed text or label that appears on the face or back of the certificate. It serves legal and regulatory purposes, specifically notifying the holder of the stock of certain restrictions placed on its transferability. This statement is usually found in companies that issue stock that is not registered with the U.S. Securities and Exchange Commission (SEC). 2. Notice of Restriction on Transfer: The Notice of Restriction on Transfer is a key element of the Guam Statement or Legend, drawing attention to the fact that the stock is not freely transferable. This restriction is usually imposed by the company issuing the stock to comply with state securities laws or regulations, particularly regarding Intrastate Exemptions. 3. Stock not Registered: Another crucial aspect of the Guam Statement or Legend is its disclosure that the stock is not registered with the SEC. This means that the stock is not subject to the extensive reporting and disclosure requirements imposed upon registered securities, and therefore it may not be freely traded on national securities exchanges. 4. Intrastate Exemption: The Guam Statement or Legend on Stock Certificate highlights that the stock being issued qualifies for an Intrastate Exemption. This exemption permits companies to offer and sell securities exclusively within the borders of a single state as long as specific conditions and criteria outlined by state securities laws are met. The Intrastate Exemption is often used by smaller local companies to raise capital without having to comply with the extensive regulations associated with registered securities. Different Types of Guam Statement or Legend on Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption: 1. Basic Guam Statement or Legend: This is the most common type of Guam Statement or Legend, providing a straightforward notice of restriction on transfer, highlighting the stock's unregistered status, and indicating its qualification for an Intrastate Exemption. 2. State-specific variations: Each state may have its own specific requirements or language for the Guam Statement or Legend. State securities laws may dictate unique disclosures or restrictions to be included within the statement to ensure compliance with local regulations. It is crucial for stockholders, investors, and anyone involved in stock transactions to thoroughly understand the implications of the Guam Statement or Legend on Stock Certificates. The statement serves as a protective measure for both the issuing company and the stockholder, conveying important information about the restricted nature of the stock's transferability and its compliance with applicable intrastate exemption requirements.