Legal Opinions and Restrictive Legends
Legal opinions and restrictive legends play a critical role in ensuring securities are issued, transferred, and traded in compliance with federal and state law. Restrictive legends help protect investors by signaling limitations on resale, while legal opinions—typically prepared by securities counsel—verify that removal or transfer meets applicable regulatory requirements.
Restricted and control securities are common in private placements, employee compensation, and merger transactions. Although these shares are “restricted” at issuance, they may later become eligible for resale under Rule 144 or other exemptions if sp…
Read MoreUnder Rule 405 and Rule 12b-2 of the Securities Exchange Act, a ‘shell company’ is defined as a company with no or nominal operations and no or nominal assets other than cash or cash equivalents. This classification is subject to significant resale r…
Read MoreSection 5 of the Securities Act of 1933 , as amended, (the “Securities Act”) requires the offer and sale of securities to be registered under the Securities Act, unless the security or transaction qualifies for an exemption from registration. Rule 14…
Read MoreIf you are interested in learning more about legal opinions and restrictive legends, the resources below offer valuable information for issuers, shareholders, and securities professionals navigating compliance and transfer requirements.
