Key Takeaways

  • An assignment of stock is a legal document that transfers ownership of shares from one party to another.
  • A lectl assignment of stock free legal form should clearly identify the seller, buyer, corporation, number of shares, and certificate number.
  • Assignments can be used in a variety of contexts—private sales, gifts, estate planning, or transfers to trusts.
  • Unlike a stock purchase agreement, which governs the terms of a sale, an assignment of stock is usually a short document that evidences the actual transfer of title.
  • Proper execution often requires signatures, witnesses, and sometimes notarization, depending on state law or corporate bylaws.
  • Stock transfers may have legal and tax implications, so parties should understand corporate restrictions, securities regulations, and tax reporting requirements.
  • Using a free form is convenient, but it’s important to ensure the form complies with corporate governance rules and any shareholder agreements.

Assignment of Stock Form

For good and valuable consideration, receipt of which is hereby acknowledged, I, [Name] the undersigned, residing at [Address] hereby sell, assign and transfer to [Name], residing at [Address], [Number] shares of the stock of [Name of Corporation] (the "Corporation") standing in my name on the books of the Corporation, represented by Certificate No. [Certificate Number], and hereby irrevocably constitute and appoint [Name], attorney-in-fact to transfer the stock on the books of the within named Corporation, with full power of substitution in the premises.

Dated: [Month, Day, Year]In the presence of:________________________Signature of Witness________________________Signature

Legal and Tax Considerations

Before finalizing a stock transfer, parties should consider:

  • Corporate bylaws or shareholder agreements – Some corporations restrict transfers without board or shareholder approval.
  • Securities laws – Even private transfers must comply with applicable federal and state securities regulations.
  • Tax implications – Transfers may trigger capital gains taxes, gift taxes, or estate taxes, depending on the transaction.
  • Record keeping – Corporations must update their stock ledger to reflect new ownership.

Because of these complexities, even when using a free assignment form, it may be wise to consult with an attorney to ensure compliance.

Key Elements to Include in the Form

A properly drafted lectl assignment of stock free legal form should include:

  • Names and addresses of both the assignor (seller) and assignee (buyer).
  • Corporation name and certificate number of the shares being transferred.
  • Number of shares involved in the transfer.
  • A clause granting authority to transfer the stock on the corporation’s books.
  • Date of execution and signatures of the assignor and a witness.
  • Optional: notary acknowledgment for added validity.

Assignment of Stock vs. Stock Purchase Agreement

It is important to distinguish between an assignment of stock and a stock purchase agreement.

  • Assignment of Stock: A short, often one-page document that simply transfers ownership of shares. It focuses on the mechanics of the transfer.
  • Stock Purchase Agreement: A more detailed contract that governs the terms of a purchase, including representations, warranties, indemnities, and payment terms.

For example, if two parties are negotiating the purchase of a significant percentage of a company, they would use a stock purchase agreement. Once the deal closes, an assignment of stock (or stock power) is typically executed to transfer the actual certificates to the buyer.

When to Use an Assignment of Stock

An assignment of stock form is commonly used when shares are being transferred outside of a large-scale sale transaction. Examples include:

  • A shareholder gifting stock to a family member.
  • Transfer of shares to a trust for estate planning.
  • Settlement of business debts by transferring stock ownership.
  • Reallocation of shares during restructuring or dissolution of a corporation.

In these cases, a lectl assignment of stock free legal form provides a straightforward way to document the change of ownership without the need for extensive agreements.

Frequently Asked Questions

  1. What is the difference between a stock assignment and a stock power?
    A stock power is a separate form that authorizes the transfer of shares without physically transferring the certificate. An assignment of stock is often written on or attached to the certificate itself.
  2. Do all stock transfers require notarization?
    Not always. Some corporations or state laws require notarization, while others only require witness signatures. Check corporate bylaws for specific requirements.
  3. Can I use a lectl assignment of stock free legal form for any corporation?
    You can, but the form must comply with corporate governance documents and applicable securities laws. Some companies have their own prescribed forms.
  4. What happens if the corporation does not update its records?
    The transfer may not be legally recognized, which could cause disputes over voting rights, dividends, or ownership. Always ensure the corporation’s stock ledger is updated.
  5. Is an assignment of stock the same as a stock purchase agreement?
    No. The assignment is a transfer document, while the stock purchase agreement contains the negotiated terms of the sale. Both may be used in the same transaction.

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