Nevada 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 Nevada Statement or Legend on a Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption is an important aspect of stock ownership within the state of Nevada. This statement or legend signifies certain restrictions and exemptions applied to stock certificates issued by companies in Nevada. Let's delve into the details to understand its significance and the different types that exist. In the context of Nevada, the statement or legend on a stock certificate serves as a legal notice, informing the holder of the various limitations and conditions related to the transfer and registration of the stock. It also highlights that the stock in question is not registered with the Securities and Exchange Commission (SEC) due to its eligibility for an Intrastate Exemption under Nevada securities law. The Intrastate Exemption refers to an exemption given to a stock offering that is exclusively offered and sold to residents within the borders of Nevada. This exemption allows companies to raise capital within the state without having to undergo the stringent registration process with the SEC, which can be time-consuming and costly. However, the exemption comes with certain requirements and restrictions that are reflected in the Nevada Statement or Legend on the stock certificate. The Nevada Statement or Legend on a Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption can vary based on the specific circumstances of the stock issuance. Here are a few types that can be found: 1. 144 Rule Compliance: This type of Nevada Statement or Legend highlights that the stock issued is subject to Rule 144 of the SEC's regulations. Rule 144 specifies the conditions under which restricted securities (stocks acquired through private offerings or non-public transactions) can be sold to the public. The legend might state that the stock can only be sold in compliance with Rule 144, which includes holding periods, manner of sale, and volume limitations. 2. Legend for pre-IPO Stock: If the stock certificate represents shares in a company that has not yet gone public, a legend may be included stating that the stock cannot be transferred until a specific event occurs. This event is often the company's initial public offering (IPO) or a subsequent registration with the SEC. This legend ensures that the stock remains restricted and cannot be freely traded until the specified condition is met. 3. Investment Representation and Restrictions: This type of legend typically confirms that the stockholder has represented to the company that they are acquiring the stock for investment purposes only and not with the intention of distributing or reselling it. This legend aids in asserting compliance with the exemption requirements and helps prevent unauthorized transfers or sales. It is crucial for stockholders in Nevada to thoroughly understand the implications of the Nevada Statement or Legend on their stock certificates. By providing this information, it enables investors to make informed decisions regarding the buying, selling, and transfer of their stock in compliance with Nevada state securities laws.

The Nevada Statement or Legend on a Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption is an important aspect of stock ownership within the state of Nevada. This statement or legend signifies certain restrictions and exemptions applied to stock certificates issued by companies in Nevada. Let's delve into the details to understand its significance and the different types that exist. In the context of Nevada, the statement or legend on a stock certificate serves as a legal notice, informing the holder of the various limitations and conditions related to the transfer and registration of the stock. It also highlights that the stock in question is not registered with the Securities and Exchange Commission (SEC) due to its eligibility for an Intrastate Exemption under Nevada securities law. The Intrastate Exemption refers to an exemption given to a stock offering that is exclusively offered and sold to residents within the borders of Nevada. This exemption allows companies to raise capital within the state without having to undergo the stringent registration process with the SEC, which can be time-consuming and costly. However, the exemption comes with certain requirements and restrictions that are reflected in the Nevada Statement or Legend on the stock certificate. The Nevada Statement or Legend on a Stock Certificate — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption can vary based on the specific circumstances of the stock issuance. Here are a few types that can be found: 1. 144 Rule Compliance: This type of Nevada Statement or Legend highlights that the stock issued is subject to Rule 144 of the SEC's regulations. Rule 144 specifies the conditions under which restricted securities (stocks acquired through private offerings or non-public transactions) can be sold to the public. The legend might state that the stock can only be sold in compliance with Rule 144, which includes holding periods, manner of sale, and volume limitations. 2. Legend for pre-IPO Stock: If the stock certificate represents shares in a company that has not yet gone public, a legend may be included stating that the stock cannot be transferred until a specific event occurs. This event is often the company's initial public offering (IPO) or a subsequent registration with the SEC. This legend ensures that the stock remains restricted and cannot be freely traded until the specified condition is met. 3. Investment Representation and Restrictions: This type of legend typically confirms that the stockholder has represented to the company that they are acquiring the stock for investment purposes only and not with the intention of distributing or reselling it. This legend aids in asserting compliance with the exemption requirements and helps prevent unauthorized transfers or sales. It is crucial for stockholders in Nevada to thoroughly understand the implications of the Nevada Statement or Legend on their stock certificates. By providing this information, it enables investors to make informed decisions regarding the buying, selling, and transfer of their stock in compliance with Nevada state securities laws.