Unregistered Securities - Stock

Before securities such as stocks, bonds,and promissory notes can be offered for sale to the public, they must be registered with the Securities and Exchange Commission (SEC). Any security that is not formally registered with the SEC is unregistered and cannot be sold to the public unless it meets an exemption.

The most common exemption permits a corporation to issue shares of stock to its executives and board members. However, any new shareholders, beyond the initial executives and board members, must notify and get the consent of the SEC before selling their stock to a third party.

Another exemption allows corporations to raise capital by soliciting investors outside the company who qualify as accredited investors.

Before buying, selling, or issuing unregistered securities, it is wise to consultant with a qualified business attorney since the penalties for violating SEC regulations are substantial, and the law is constantly charging and complex.

SEC Rule 144 provides an exemption and permits the public resale of restricted 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 anyone time.

Securities and Securitization

Restricted Corporate Stock

Non-Voting Stock

Stock Swaps


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