New York 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. A New York Statement or Legend on a stock certificate refers to a specific notice or restriction placed on the transfer of stock. This legend is primarily used when the stock is not registered or when an exemption is being claimed under the intrastate securities laws of New York State. The purpose of this statement or legend is to inform potential buyers about the limitations or restrictions on transferring the stock and to ensure compliance with state securities regulations. It serves as a warning to investors that buying or selling this stock may not be permissible under certain circumstances. There are different types of New York Statements or Legends on Stock Certificates — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption, and they can include: 1. Restricted Stock Certificate: This legend indicates that the stock certificate is subject to certain restrictions on its transferability. It signifies that the stock is not freely tradable in the market, and any transfer must comply with specific conditions outlined in the legend. 2. Unregistered Stock Certificate: This legend indicates that the stock has not been registered with the Securities and Exchange Commission (SEC) and may not be offered or sold to the public without registration or an exemption from registration. It warns potential buyers that they must meet specific criteria to legally purchase or transfer the stock. 3. Intrastate Exemption Stock Certificate: This legend indicates that the stock is being offered and sold exclusively within the boundaries of New York State and is exempt from federal registration requirements. It emphasizes that any transfer of the stock should only occur within New York State and should adhere to the applicable intrastate exemption rules. It is crucial for investors and market participants to carefully read and understand the New York Statement or Legend on a stock certificate before engaging in any transfer or purchase activities to ensure compliance with the relevant securities laws. Failure to heed these restrictions could lead to legal consequences or the invalidation of the stock's transfer.

A New York Statement or Legend on a stock certificate refers to a specific notice or restriction placed on the transfer of stock. This legend is primarily used when the stock is not registered or when an exemption is being claimed under the intrastate securities laws of New York State. The purpose of this statement or legend is to inform potential buyers about the limitations or restrictions on transferring the stock and to ensure compliance with state securities regulations. It serves as a warning to investors that buying or selling this stock may not be permissible under certain circumstances. There are different types of New York Statements or Legends on Stock Certificates — Notice of Restrictiotransfereefe— - Stock not Registered — Intrastate Exemption, and they can include: 1. Restricted Stock Certificate: This legend indicates that the stock certificate is subject to certain restrictions on its transferability. It signifies that the stock is not freely tradable in the market, and any transfer must comply with specific conditions outlined in the legend. 2. Unregistered Stock Certificate: This legend indicates that the stock has not been registered with the Securities and Exchange Commission (SEC) and may not be offered or sold to the public without registration or an exemption from registration. It warns potential buyers that they must meet specific criteria to legally purchase or transfer the stock. 3. Intrastate Exemption Stock Certificate: This legend indicates that the stock is being offered and sold exclusively within the boundaries of New York State and is exempt from federal registration requirements. It emphasizes that any transfer of the stock should only occur within New York State and should adhere to the applicable intrastate exemption rules. It is crucial for investors and market participants to carefully read and understand the New York Statement or Legend on a stock certificate before engaging in any transfer or purchase activities to ensure compliance with the relevant securities laws. Failure to heed these restrictions could lead to legal consequences or the invalidation of the stock's transfer.