Rule 144 Opinion: Affiliate Sale of Restricted Shares

A Rule 144 Opinion: Affiliate Sale of Restricted Shares is a legal template that outlines the legal opinion regarding the sale of restricted shares by an affiliate of a company under Rule 144 of the Securities Act of 1933.

Rule 144 provides a safe harbor exemption from registration requirements for the sale of restricted securities, including shares acquired through private placements or employee stock options, by certain affiliates and non-affiliates. An affiliate generally refers to a person or entity that has a direct or indirect control over the issuing company, such as executives, directors, or large stakeholders.

This legal template focuses specifically on the sale of restricted shares by affiliates, who typically face additional restrictions and requirements compared to non-affiliates when selling their securities. It provides a comprehensive analysis and opinion as to whether the proposed sale of restricted shares by an affiliate complies with the requirements of Rule 144, ensuring that the transaction is conducted within the bounds of federal securities laws.

The template may include an examination of various factors such as the timing and manner of the sale, holding periods, volume limitations, and reporting requirements. It assesses whether the affiliate has satisfied all the necessary conditions prescribed by Rule 144, including the availability of adequate current public information about the company, compliance with holding period requirements, and the absence of any prohibited solicitation or engagement in any market manipulation activities.

By utilizing this legal template, attorneys can provide a legal opinion to the affiliate and potential buyers, attesting that the proposed sale of restricted shares meets the requirements of Rule 144. This opinion helps facilitate the sale of restricted shares in a compliant manner, avoiding potential legal repercussions and enabling the smooth transfer of shares between parties.