A legend on a stock certificate is a statement setting forth any restrictions on the sale of the company's stock. While stock legends are usually established by the Securities and Exchange Commission (SEC) for unregistered or restricted securities, legends are also placed on stock certificates by management to control who can become a shareholder. This becomes particularly important when shareholders have entered into buy-sell agreements and want to limit how much stock can be sold during defined periods of time. For example, if a shareholder owns 10,000 shares, legends may limit sales to 1,000 shares per twelve month period as defined on the stock certificates.

Stock certificates are physical documents that represent a shareholder's ownership in a corporation. The corporation may be a public or private company. Stock certificates include information, including the number of shares owned, the date the stock certificate was issued, an identification number, sometimes a corporate seal, and an authorized signature which may be an electronic signature. Today, stock certificates are not always used by corporations. Stock ownership may be recorded electronically and maintained by the corporate secretary. The first stock certificates were issued in 1606 by the Dutch East India Company which was a public trading company.

Stock Swaps

Unregistered Securities - Stock

Non-voting Stock - Limited Voting Stock