144 Stock in Exchange for Consulting Services

When Does My Holding Period Start if I Receive 144 Stock for Consulting?

If you provide consulting services for the issuing company, under SEC Rule 144, your holding period begins only after you have actually and completely performed the services.  The reason is intuitive:  after you have completed the services, there are no conditions under which you are not entitled to receive and keep your 144 stock.

Rule 144 Opinions Need to Clarify Vague or Ambiguous Consulting Agreements

The problem with many Consulting Agreements is that they are worded ambiguously.  The reader cannot tell when (or if) the 144 shares were ever due.  Transfer Agents need 144 opinions in order to remove any question as to whether or not the 144 stock has been “earned” by the consultant.  The answer to that question depends on exactly what the Consulting Agreement says.

We Help Request Needed Documents from the Issuer So Rule 144 Conditions Are Met

When that document was drafted poorly or is unclear, we can request affidavits or other supporting documentation from the Issuer.  Often the Board Resolutions written at the time of the Consulting Agreement will document that the services were performed.  Affidavits from the Issuer’s CEO can confirm the date on which services were actually rendered–and this is the date on which your holding period starts (not the date of the Consulting Agreement.)

Some contracts may state that your 144 stock compensation was fully earned when issued or at a specified date in the past, even though your consulting services are still to be rendered.  In those cases, your holding period starts on the contract date or specified date but this is often when additional documentation is needed.  Part of our services include identifying when more documents are required, and we can request these for you from the appropriate party.

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