DUE DILIGENCE GUIDE FOR STOCK DEPOSITS

Make depositing shares smoother with proper documentation preparation.


OVERVIEW

Brokers must perform due diligence before accepting shares for deposit and resale. Having the right documentation ready can significantly speed up this process and avoid delays.


GETTING STARTED

Create a digital due diligence folder as soon as you acquire shares. This folder should document:

  • Share acquisition details
  • Payment confirmation
  • Source of shares
  • Proof of tradability


DOCUMENTATION FOR DIRECT ISSUER PURCHASES

  • Payment Evidence

    • Cancelled check copies
    • Wire transfer confirmations
    • Other payment verification

  • Supporting Documents

    • Private placement memorandums
    • Subscription agreements
    • Consulting contracts
    • Original certificate copies
    • Account statement

  • Legal & Compliance

    • Share registration evidence (S-1, S-3, S-8)
    • Current legal opinion establishing the tradability of the shares (dated within 90 days)
    • NOTE: Many brokers will not accept opinions written by these attorneys: Prohibited Attorney List

DOCUMENTATION FOR SHAREHOLDER PURCHASES


Obtain documentation when first acquiring shares, as seller cooperation is highest during the transaction.

  • Original Share Information

    • Original issuance details
    • Consideration paid to issuer
    • Complete share ownership history

  • Transaction Records

    • Payment consideration (from you to seller)
    • Purchase agreement
    • Copies of stock certificates
    • Declaration of seller's affiliate status
    • Any communications between transfer agent, seller, the issuer, and you.

  • Legal & Compliance

    • Share registration evidence (S-1, S-3, S-8)
    • Current legal opinion establishing the tradability of the shares (dated within 90 days)
    • NOTE: Many brokers will not accept opinions written by these attorneys: Prohibited Attorney List


Learn more about legend removals and stock deposits.

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