The 'Stock Transfer' upload workflow permits the capturing of either a secondary sale or a stock transfer. A secondary sale is the sale of shares from one stockholder to a third party (or third parties), which is not in connection to a company's acquisition. A stock transfer involves switching the owner of stock from one person/entity to another person/entity. In other words, secondary sales involve cash, and transfers don't.
The generative Stock Transfer workflow is intended to handle "permitted" transfers, which do not require compliance with any right of first refusal or co-sale rights and/or related agreements. Typically, these types of permitted transactions include transfers from an individual to his/her family trust or transfers from one investment fund to another affiliated fund(s). In such cases, the transfers are without payment.
Please note that there can be tax consequences to a transfer of shares, so if you're uncertain whether or not your transaction meets the "permitted transfer" guidelines above, we recommend that you speak with your lawyer before starting a Stock Transfer workflow in the platform.
You’ll find the “Stock Transfer or Secondary Sale” workflow under the “Equity” section of workflows. You'll want to select either the "Upload" version of the workflow, if the transfer or secondary sale occurred outside of the platform and you already have signed documents in hand, or "Transfer" if you'd like Shoobx to lead you through transferring shares from one individual/entity to another individual/entity.
Start by defining the transfer(s), by clicking "Add Transfer." Then, enter the name of the person who's transferring shares and select the stock certificate associated with the shares. Next, enter the name of the person to whom the equity is being transferred and the number of shares. Please note that you can enter several transferees on this screen.
Enter Transfer Agreement Language
You'll most likely want to work with your lawyer at this point in the workflow, as Shoobx will ask you to enter the details about the recipient(s) and agreement document. For example, you'll craft the language or terms for the Transfer Agreement document (like what agreements are restricting the transfer and what agreements are being joined by the transferee). You'll notice these pieces of information are placeholders below, which require your explicit input. You'll then have the ability to grant the transferees access to the documents associated with transferor's stock certificate at the "Grant Document Access" step.
The Stock Transfer Agreement, Stock Power Agreement, and Common Stock Certificate will be generated by Shoobx, which you can review at the Checkpoint. There will also be an opportunity for you to send the documents for legal review.
If you've used the generative path to complete your transaction, the transferor, transferee, and company representative will all sign documents. Once signed, all documents will be automatically added to the data room, and the stock ledger and cap table will be adjusted accordingly.
Fidelity does not provide legal or tax advice
Screenshots are for illustrative purposes only.
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