North Dakota Statement or Legend on Stock Certificate - Notice of Restriction on Transfer - Stock not Registered - Intrastate Exemption

State:
Multi-State
Control #:
US-1057BG
Format:
Word; 
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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.

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FAQ

Rule 147 is a rule that can be used by a company to raise funds without actually registering with the Securities and Exchange Commission (SEC).

Rule 505 allows companies to decide what information to give to accredited investors, so long as it does not violate the antifraud prohibitions of the federal securities laws. But companies must give non-accredited investors disclosure documents that generally are equivalent to those used in registered offerings.

Private placements are unregistered, non-public securities offerings that rely on an available exemption from registration with the Securities and Exchange Commission (SEC).

Rule 147 & Integration of Other Offerings Offerings are integrated if two or more offerings are considered a single offering. Under these circumstances all requirements for the exemption relied upon in each of the offerings must be present.

Requirements of Intrastate Offerings The issuing company must be registered in that state; The company must do a significant amount of business in the state; and. The resale of securities into other states cannot take place within six months of their initial sale.

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North Dakota Statement or Legend on Stock Certificate - Notice of Restriction on Transfer - Stock not Registered - Intrastate Exemption