Q: Can you purchase shares of a private Company on the Secondary Market but NOT disclose the purchase to the Company?
In other words, does the Seller of the shares have to disclose the sale to the Company, inclusive of who the Buyer is?
A: Greetings. It appears you would like to purchase shares of a non-public company. A purchaser who meets the SEC definition of a qualified purchaser may buy shares of a non-public company. Often brokers are required to facilitate the purchase. Due diligence is also required. During the due diligence process, certain information would be reviewed, such as stock sale restrictions or protections. These may include a "right of first refusal" giving the non-public company the right to first purchase the stock before the investing purchaser. If such restrictions do not exist, then the purchaser is free to buy the shares. All purchasers should want their purchases recorded with the company to ensure their shareholder rights. Please contact a good New York lawyer for further information.
1 user found this answer helpful
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.