Rule 144 applies to the resale by a shareholder of stock acquired by means other then a
registration. The purpose of the rule is to prevent issuers from selling stock on an
exempt basis (without registering the shares) to a purchaser who then distributes the
stock to others. This is considered an underwriting unless Rule 144 is followed.
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. Once the conditions of rule 144 are met, you can start the process of selling the shares.
Some of the requirements to be met under Rule 144
- * There must be adequate current public information available about the issuer to comply with rule 144.
- * The shareholder must have held the security for a specified holding period.
- * Shares must be sold within certain sales volume limitations.
- * The resale must comply with the manner of sale requirements of the rule.
Once all the rules are met you can contact the company to have them issue an opinion that you may resale the share under rule 144. You would then send the shares to the transfer agent in order to have them remove the legend and issue free and clear shares.
Rule 144 prescribes holding periods for stocks and makes a distinction between "affiliates" and non-control persons. When you acquire restricted securities or hold control securities, you must find an exemption from the SEC's registration requirements to sell them in the marketplace. Rule 144 allows public resale of restricted and control securities if a number of conditions are met. This overview tells you what you need to know about selling your restricted or control securities. It also describes how to have a restrictive legend removed.
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