Selling Corporate Shares – Be Careful
If you want to sell your company’s stock, you need to be meticulous in filing the papers with the Securities and Exchange Commission. Failure to do so will result in a fine of up to $50,000 for an individual or up to $100,000 for a business. Make sure you are aware of all of the rules regulating transactions before engaging in them!
This is one post that will keep your business safe. Selling corporate shares can be tricky because there are rules and regulations that you need to follow if you want it done properly. If you do not follow these rules, you could end up facing some hefty fines.
There are four major things you need to know in order to sell your company’s shares:
1. Keep your papers legally in order. This means using the correct documents and ensuring that they are filed properly. Failure to do so will result in a fine of up to $50,000 for an individual or up to $100,000 for a business. If it seems like something is off and you aren’t sure what kind of paper work is needed, always check with the SEC before proceeding. This is a good way to avoid costly fines.
2. There are multiple different types of stock sales you can make. These include:
A. Open-market transactions, which are sales that occur on a public exchange or market, such as the New York Stock Exchange (NYSE) or the NASDAQ (National Association of Securities Dealers Automated Quotations). In order for this kind of sale to be legal, you will need to file with the SEC and have its approval before the sale takes place. In some cases, even after getting this approval you may still need to get clearance from other regulatory agencies as well. These kinds of sales are fast and fairly simple.
B. Private sales, which aren’t sold on any public exchanges. They are simply deals made between the seller and the buyer and are not subject to the same kind of SEC scrutiny as those that are. These kinds of sales can be made privately with the approval of company stockholders, who can also decide if they want to approve any kind of additional terms.
C. Purchases made by original security holders who already have stock in their possession (such as founders or family members). This type of sale is considered private and doesn’t require any special documents or filings with the SEC.
D. Purchases made by employees who receive stock options. These are normally not considered private sales because they are made under the auspices of the law that is already on the books. However, there are occasions in which this might be a moot point and in which it would be better to make sure that everything is done properly.
3. There are certain terms you want to make sure you include in any private sale. The most obvious of these is to require that the seller posts an escrow account before any shares are transferred. This means that at some point in the future a check will have to be written from this account for some amount of money (usually between $5,000 and $10,000). This is an important line of defense to make sure that the seller actually follows through on any promises they make.
4. There are instances in which the buyer of shares may be required to obtain a legal opinion from an attorney or qualified accountant before they can be sold. This is not necessarily common, but it’s a good idea to check into it before you proceed with any kind of sale. You’ll find that this advice is especially true if you want to sell shares in your company to foreign nationals or people who are going to resell them very soon afterwards. It’s not just the SEC that you need to make sure is assured of the legitimacy of any sale, but also whoever the seller happens to be!
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Article: Selling Corporate Shares – Be Careful [Motivational article]
In this article we are going to talk about selling corporate shares in an easy manner. We will also look at some important points. For details, you can read this article.
The first thing is to keep your papers legally in order. This means using the correct documents and ensuring that they are filed properly. Failure to do so will result in a huge financial loss for you.
Next, you should know about the multiple types of stock sales available:
A. Open-market transactions, which are sales that occur on a public exchange or market, such as the New York Stock Exchange (NYSE) or the NASDAQ (National Association of Securities Dealers Automated Quotations). In order for this kind of sale to be legal, you will need to file with the SEC and have its approval before the sale takes place. In some cases, even after getting this approval you may still need to get clearance from other regulatory agencies as well. These kinds of sales are fast and fairly simple.
B. Private sales, which aren’t sold on any public exchanges. They are simply deals made between the seller and the buyer and are not subject to the same kind of SEC scrutiny as those that are. These kinds of sales can be made privately with the approval of company stockholders, who can also decide if they want to approve any kind of additional terms.
C. Purchases made by original security holders who already have stock in their possession (such as founders or family members). This type of sale is considered private and doesn’t require any special documents or filings with the SEC.
D. Purchases made by employees who receive stock options. These are normally not considered private sales because they are made under the auspices of the law that is already on the books. However, there are occasions in which this might be a moot point and in which it would be better to make sure that everything is done properly.
3. There are certain terms you want to make sure you include in any private sale. The most obvious of these is to require that the seller posts an escrow account before any shares are transferred. This means that at some point in the future a check will have to be written from this account for some amount of money (usually between $5,000 and $10,000). This is an important line of defense to make sure that the seller actually follows through on any promises they make.
4. There are instances in which the buyer of shares may be required to obtain a legal opinion from an attorney or qualified accountant before they can be sold. This is not necessarily common, but it’s a good idea to check into it before you proceed with any kind of sale.
Conclusion:
If you follow all these simple rules, you can easily sell shares in your company. Our very first point is to go through the proper legal procedures. Using correct documents and only using your authorized officer makes it possible for other people to trust you and thus gives a boost to your company. You should also make sure that the seller is well known in the industry and has a good reputation. You will generally receive the best price when selling shares to someone who is already shareholder or administrator of the company. As for private sales, it is easy to lock up any issues by requiring them to take out an escrow account before they are able to transfer shares.