Build a Successful Business: The Entrepreneurship Collection (10 Items)

APPENDIX E

Rule 144

Selling Restricted and Control Securities

The trading of common stock acquired before an IPO is “restricted” by the U.S. Securities and Exchange Commission. A number of rules govern how that restriction can be lifted. Here is the SEC’s own description of its key rule governing restricted shares.

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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