Legal Question in Securities Law in California

Re: Registering stock in California

The placement of illiquid securities in a retirement account has implications that include not only the qualifications of the investor, but the make up of the retirement account, the type of investment, i.e. stock, bond, etc.

Not only do you need to have the proper registration, or exemption docs available to your potential investor. But you need to provide disclosure and other information that are necessary for him to make an informed decision.

This is not a simple issue, proper direction and assistance is necessary to complete this task.

Odds are he will not be able to place it in his account and if he does, you may not enjoy the risks associated with it.

Re: Registering stock in California

The investor who wants to put his purchased stock into his retirement plan is the tip of a rather large iceberg. You need to have attorney assistance and review throughout the process of issuing stock to outsiders. This would include determining the proper exemption or registration process, preparing disclosure documents, and other steps necessary to keep your corporation and its officers, promoters and directors out of hot water.

It is sometimes said of securities issues that they are of three kinds: registered, exempt and illegal. In order to avoid falling into that third category, you'll need professional assistance in making sure you're registered or, if not, why you are exempt from registration and what you must do or not do to become and remain qualified for the relied-upon exemption.