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3 registration gives investors the right to demand that a company registers their shares using Form 3. Form 3 is a shorter registration form than Form 1, which is used in an initial stock launch or IPO. Form 3 can be used by a company one year after an IPO.
The Holder waives any rights the Holder may have had with respect to registration of the Exchange Securities under the Securities Act and confirms that the Company is under no obligation to register the Securities pursuant to the Securities Act.
With demand registration rights, investors have a right to force a company to register shares with the SEC. Once registered, the shareholders can then sell their shares to outside investors and exit the company.
What Are Piggyback Registration Rights? Piggyback registration rights are a form of registration rights that grants the investor the right to register their unregistered stock when either the company or another investor initiates a registration.
What Is Registration Right? A registration right is a right entitling an investor who owns restricted stock to require that a company list the shares publicly so that the investor can sell them. Registration rights, if exercised, can force a privately-held company to become a publicly-traded company.