Investment Letter for a Private Sale of Securities
What is this form?
The Investment Letter for a Private Sale of Securities is a legal document that confirms a buyer's intention to acquire securities for investment purposes rather than for resale. This form is crucial for transactions that qualify for the private offering exemption under Section 4(2) of the Securities Act of 1933. Unlike other securities transactions that require public registration, this form allows both parties to document the investment nature of the purchase, ensuring compliance with relevant securities regulations and protecting the interests of the issuer and the investor.
Key components of this form
- Identification of the board of directors of the issuing corporation
- Details regarding the number of shares and par value of the stock being purchased
- A representation by the buyer that shares are for investment only and not intended for resale
- Requirements for further actions if the buyer intends to resell the shares in the future
- Signature and printed name of the investor, along with the date of the transaction
When to use this form
This form should be used when an investor purchases restricted securities directly from an issuer during a private offering. It is essential when the offering does not involve a public solicitation or advertisement, allowing the issuer to avoid the extensive registration process. This form protects the issuer by affirming that the investment is made solely for personal use and not for resale in the public market.
Who needs this form
- Investors acquiring restricted securities from a corporation
- Issuers who are offering securities under the private offering exemption
- Corporate legal representatives or advisors managing private sales of shares
How to prepare this document
- Identify the board of directors and provide the name of the issuing corporation.
- Specify the number of shares and par value of the stock being purchased.
- Clearly state that the shares are being acquired for investment purposes only.
- Indicate that any future sales will comply with the Securities Act of 1933.
- Sign and date the form at the bottom to finalize the transaction.
Notarization guidance
This form usually doesn’t need to be notarized. However, local laws or specific transactions may require it. Our online notarization service, powered by Notarize, lets you complete it remotely through a secure video session, available 24/7.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Common mistakes to avoid
- Failing to include the full name and address of the corporation.
- Not clearly stating the intent to hold shares for investment only.
- Omitting the date of signature, which may lead to confusion about the transaction timeline.
- Neglecting to retain a copy of the signed letter for personal records.
Why complete this form online
- Convenience of instant downloads that can be completed anytime and anywhere.
- Editable templates that allow users to input their specific details easily.
- Access to forms drafted by licensed attorneys, ensuring legal compliance.
- Secure storage options for keeping vital documents organized and accessible.
Legal use & context
- This form is legally recognized under the Securities Act of 1933 for private transactions.
- Ensures that investors are acknowledging their investment intent.
- Protects both the buyer and issuer from future legal disputes regarding the nature of the securities.
Summary of main points
- The Investment Letter is crucial for confirming that securities are bought for investment, not resale.
- It's important for protecting parties involved in private sales of securities.
- Complete accuracy in filling out the form is essential for its legality.
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FAQ
Form 144, required under Rule 144, is filed by a person who intends to sell either restricted securities or control securities (i.e., securities held by affiliates.The securities may be sold within the 90-day period after Form 144 is filed.
You can redeem your mutual fund shares or transfer securities to another financial institution using a letter of instruction. This letter gives your financial institution the authority to sell or transfer shares on your behalf.
This Form must be filed with the SEC by an affiliate of the issuer as a notice of the proposed sale of securities in reliance on Rule 144 , when the amount to be sold under Rule 144 by the affiliate during any three-month period exceeds 5,000 shares or units or has an aggregate sales price in excess of $50,000.
You can sell shares by speaking to a broker or through a DIY investing platform. The cost of trading shares varies depending on the platform or broker you are using and whether you are selling your shares online, or in the case of paper certificates, on the phone or by post.
Identify your letter as a letter of intent to sell shares. Define the company and who is meant by "seller" and "buyer." Include contact information for all the parties. Include the postal and registered address of the company, if they're different. Name every shareholder involved in the sale.
Employees or investors can sell the public company shares through a broker. To sell private company stockbecause it represents a stake in a company that is not listed on any exchangethe shareholder must find a willing buyer. In addition, the company must approve the sale.
Rule 144 does not apply to private transactions, including sales, gifts, estate distributions and pledges, but does apply to the purchaser, donee, beneficiary and pledgee, when they sell the stock into the public market.
Sell the shares back to the company. Sell the shares to another investor. Sell the shares on a private-securities market. Get your company to do an IPO.
Rule 144 provides an exemption and permits the public resale of restricted or control securities if a number of conditions are met, including how long the securities are held, the way in which they are sold, and the amount that can be sold at any one time.
