This review list is being supplied to you in order to inform you about the document in question and to assist you in preparing it for submission. If the certificate is issued by a private firm, this consent legend shall be placed on the back of each certificate produced by the company. It explicitly advises any prospective purchaser of the stock of the restrictions imposed on it, so protecting the firm, its officers, directors, and indirectly, its shareholders from liability
Consent Legend For Private Shares
Consent Legend for Private Shares
Not Transferable Without the Consent of a Majority
of the Stockholders.The securities represented by this certificate have not
been registered under the (Federal) Securities Act of
1933 or applicable securities act of any state but have
been issued in reliance upon exemptions from
registration contained in said acts. No sale, offer to
sell or other transfer of the securities represented by this
certificate may be made unless a registration statement
under said acts is in effect with respect to the securities
or an exemption from the registration provisions of such
acts is then applicable.Consent Legend for Private Shares
Review ListThis review list is provided to inform you about this document in question and assist you in its preparation. This consent legend should be printed on the back of each certificate issued in a private company. It clearly notifies any purchasing party of the restrictions placed upon the stock and thereby protects the company, its officers, directors, and indirectly its shareholders.
Frequently Asked Questions
What is a consent legend for private shares?
A consent legend for private shares is a statement printed on the back of each certificate issued in a private company. It notifies any purchasing party of the restrictions placed upon the stock and protects the company, its officers, directors, and indirectly its shareholders.
Why is a consent legend required on private share certificates?
The consent legend is required to clearly notify any purchasing party of the restrictions placed upon the stock. This protects the company, its officers, directors, and indirectly its shareholders.
What does the consent legend say about transferability of private shares?
The consent legend states that the securities are not transferable without the consent of a majority of the stockholders. It also indicates that no sale, offer to sell, or other transfer may be made unless a registration statement is in effect or an exemption is applicable.
What securities laws are referenced in the consent legend?
The consent legend references the Federal Securities Act of 1933 and applicable securities acts of any state. It notes that the securities have not been registered under these acts but have been issued in reliance upon exemptions from registration.
Where should the consent legend be printed?
The consent legend should be printed on the back of each certificate issued in a private company. This ensures that any purchaser is aware of the restrictions.
What are the consequences of not having a consent legend on private share certificates?
Without a consent legend, purchasing parties may not be clearly notified of the restrictions placed upon the stock. This could fail to protect the company, its officers, directors, and indirectly its shareholders.
Can private shares be sold without registration under the Securities Act of 1933?
Private shares may be sold without registration if an exemption from the registration provisions of the Securities Act of 1933 is applicable. The consent legend states that no sale, offer to sell, or other transfer may be made unless a registration statement is in effect or an exemption is then applicable.
What is the purpose of the consent legend review list?
The consent legend review list is provided to inform you about the document in question and assist in its preparation. It helps ensure that the consent legend is properly understood and applied.
Who does the consent legend protect?
The consent legend protects the company, its officers, directors, and indirectly its shareholders. It does so by clearly notifying any purchasing party of the restrictions placed upon the stock.
What must a purchaser agree to when acquiring private shares with a consent legend?
A purchaser must agree that the securities are not transferable without the consent of a majority of the stockholders. They must also acknowledge that no sale, offer to sell, or other transfer may be made unless a registration statement is in effect or an exemption is applicable.
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