The Puerto Rico Legend on Stock Certificate with Reference to Separate Document Restricting Transfer of Shares is a specific type of certification used in Puerto Rico to indicate that a stock certificate is subject to certain restrictions on its transferability. These restrictions are outlined in a separate document, often referred to as a transfer restriction agreement, which accompanies the stock certificate. The purpose of this legend is to ensure that the terms and conditions regarding the transfer of shares are clearly stated and understood by all parties involved. The legend serves as a visible reminder to both current and potential shareholders that there are limitations on the ability to sell, transfer, or otherwise dispose of the shares. The Puerto Rico Legend serves as a legal safeguard, protecting the interests of the company and its shareholders. It can serve various purposes, such as preventing the shares from being transferred without the consent of certain parties, restricting the transfer of shares to specific individuals or entities, or requiring the shares to be offered for sale to existing shareholders before being sold to outside parties. Different variations of the Puerto Rico Legend on Stock Certificate with Reference to Separate Document Restricting Transfer of Shares may exist depending on the specific restrictions outlined in the accompanying document. Some common types include: 1. "Restrictive Transfer Agreement" Legend: This legend signifies that the transfer of shares is subject to a separate agreement that imposes specific limitations on its transferability. These limitations may include restrictions on transferring shares to competitors or requiring shareholder approval for any transfer. 2. "Right of First Refusal" Legend: This legend indicates that existing shareholders have the right to purchase the shares before they can be sold to third parties. It provides shareholders with the opportunity to maintain control over the ownership structure of the company. 3. "Lock-Up" Legend: This legend signifies that the shares are subject to a predetermined lock-up period, during which the shares cannot be transferred. Lock-up periods are commonly implemented during initial public offerings (IPOs) to prevent early investors and insiders from flooding the market with shares immediately after the offering. 4. "Voting Rights Agreement" Legend: This legend states that the stock certificate is subject to a separate agreement that outlines specific voting rights and limitations associated with the shares. These agreements may include provisions restricting voting rights for certain shareholders or requiring super majority approval for certain actions. It is important to note that the specific language and content of the Puerto Rico Legend on Stock Certificate with Reference to Separate Document Restricting Transfer of Shares may vary depending on the company and the nature of the transfer restrictions. The legend's purpose is to transparently communicate the existence of the separate document while highlighting the specific limitations on the transferability of the shares.