Rule 144: What You Need to Know

by | Jul 2, 2024 | Stock Market

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Rule 144 is a term you have probably heard used but don’t have a clue what it is or what it has to do with you. By definition, it’s the most common exemption, which allows you to resell unregistered securities on a public stock market in a legal manner. Most people don’t understand that. The following information can help you gain a grasp of this rule.

Why Is This Rule Important?

This is one of the most common questions asked about rule 144. The importance of the rule is to small business owners or investors who might own some restricted or even controlled securities. They’re usually given in cases, such as being a part of an employees benefit package, payment for professional services, seed money or capital for a startup, and may even be part of a merger or acquisition agreement. The rule is important because it gives these small businesses and investors an exemption, allowing them to resell these securities without getting into legal trouble.

Who Does This Rule Apply To?

Who the rule applies to can be confusing as well. There are a few rules in place for this, each of which is somewhat complicated. Your best bet is to do your research before you decide to invoke rule 144 for your business or investments.

Still Confused?

It’s not difficult to still be confused, even after researching and reading up on this rule. The best thing to do is contact a reputable stock transfer company, make an appointment with the professionals and go from there. They will answer your questions and put you on the right path.

For more information on rule 144 and other services offered, contact the professionals at Colonial Stock Transfer Company, Inc. for help and an appointment.