The Minnesota Legend on Stock Certificate refers to a specific clause or statement included on stock certificates issued by companies in the state of Minnesota, United States. This legend serves as a legal provision, defined by Minnesota Statutes Section 302A.2101, that restricts the transferability of shares issued by corporations incorporated under Minnesota laws. The Minnesota Legend is usually found on the face or back of the stock certificate and consists of a bold, conspicuous statement informing the shareholders and potential buyers about certain limitations or restrictions imposed on the transfer of shares. It acts as a notice to all parties involved in the stock transaction that there are additional requirements or obligations associated with the transfer of these shares which may not be evident on the face of the certificate itself. The purpose of the Minnesota Legend is to formalize various restrictions imposed by either the company's Articles of Incorporation, their Bylaws, or other relevant legal agreements, such as shareholder agreements or voting rights agreements. The specific content and details of the restrictions may vary depending on the company's individual circumstances and the provisions outlined in the separate document that accompanies the stock certificate. The separate document, which is referenced by the Minnesota Legend, typically contains more detailed information regarding the transferability of the shares. It may outline specific conditions or requirements that must be met before a transfer of shares can occur. These conditions may include obtaining board or shareholder approval, imposing restrictions on who can hold company stock (such as prohibiting transfers to competitors or restricting transfers to existing shareholders only), or requiring the company's right of first refusal in case of a proposed transfer. Different types of Minnesota Legends on Stock Certificates may exist, depending on the specific restrictions or limitations imposed by each company. Common types include: 1. Standard Minnesota Legend: This legend alerts shareholders that the transfer of shares is subject to certain restrictions outlined in the separate document accompanying the certificate. 2. Prohibition on External Transfer: In some cases, the Minnesota Legend may indicate that the shares are not transferable to parties outside a specific group, such as employees, directors, or existing shareholders. 3. Preemptive Rights: The Minnesota Legend may highlight the company's right to prior approval or first refusal before any proposed transfer of shares can take place. It is essential for shareholders and potential buyers to carefully review the Minnesota Legend on the stock certificate and refer to the separate document for a comprehensive understanding of the restrictions and conditions related to transferring the shares. Consulting legal professionals is recommended to clarify any uncertainties and ensure compliance with Minnesota laws.
Minnesota Legend on Stock Certificate with Reference to Separate Document Restricting Transfer of Shares
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How to fill out Minnesota Legend On Stock Certificate With Reference To Separate Document Restricting Transfer Of Shares?
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FAQ
The purpose of the restrictive legend or notation is to protect the issuing company from loosing its private placement exemption for the initial sale of the securities and to notify the investor that the restricted securities cannot be resold into the public securities market without satisfying certain requirements.
Restricted stock refers to unregistered shares of ownership in a corporation that are issued to corporate affiliates, such as executives and directors. Restricted stock is non-transferable and must be traded in compliance with special Securities and Exchange Commission (SEC) regulations.
Only a transfer agent can complete the task of removing a restrictive stock legend. The transfer agent will require an opinion letter from the issuer's counsel or from his or her own lawyer plus 144 papers completed by a broker?stating that the restricted legend can be removed.
Only a transfer agent can complete the task of removing a restrictive stock legend. The transfer agent will require an opinion letter from the issuer's counsel or from his or her own lawyer plus 144 papers completed by a broker?stating that the restricted legend can be removed.
In general, restricted securities are acquired in a nonpublic transaction (private placement). Such securities are unregistered, can only be resold under certain conditions and usually bear a legend to that effect.
In order to have the legend on a stock certificate removed, investors should contact the company's shareholder relations department to find out the details of the removal process. Following that, the company will send a confirmation authorizing its transfer agent to remove the legend.
The process of removing the restrictive legend from a stock certificate is done only to facilitate a public resale, and in no way alleviates an investor from complying with all aspects of Rule 144 at all times.
