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· Exchange of Stock Workflow

Updated

Introduction

Recording an exchange of stock (or recording the change of shares from one class of stock in your company to another class of stock) can be accomplished by running the Exchange of Stock workflow.

This workflow requires that you upload evidence of this transaction and will not generate any documentation for this exchange.

To see the steps of the workflow and what's required please click the links below:

Exchange of Stock Workflow

Getting Started

To start the workflow, from the company workspace go to Start New Workflow > Equity > Exchange of Stock (Upload Only). 

Upload/Pick Agreement

You will need to provide the stock exchange agreement. Click on Document Options to upload the document from your computer or select the file if it has already been uploaded into the Data Room. Once uploaded, you will be prompted to enter the Effective Date of the agreement. 

Define Transactions

Define each of the transactions included as part of the exchange. This is done in two parts: First, select the original certificate that is being exchanged, and second, define the details of the exchange.

Typically, stock exchanges are performed for the entire certificate. If you need to reflect a partial exchange, you must click Add New Certificate Details again to indicate the number of shares that are not included in the exchange.
  1. Click Add Exchange.
  2. Select the existing stockholder.
  3. Select the original certificate. 
  4. Click Add New Certificate Details.
  5. Enter the number of shares exchanged, the new stock class, and the value represented and click Save.
  6. Click Add New Certificate Details again and repeat the previous steps if you need to show any additional exchanges for the certificate. 
  7. If necessary, click the Edit button to make changes to any of the details, or click the X to delete. 
  8. If you need to show an exchange for additional certificates, click Add Exchange and repeat the previous steps. Otherwise click Continue. 
  9. Once all original certificates have been added, click Continue. 

Provide Certificates

Select if you want to upload or generate the certificates that were created through the exchange process. During this step you will need to know the certificate number and any applicable legends.

  1. Click the Create Certificate button. 
  2. Select to either generate new stock certificates, or to upload already executed certificates. 
  3. Follow the prompts to either upload the certificate or define the terms for the new certificate. 
  4. Click Continue. 

Checkpoint

At the Checkpoint you will be able to review all uploaded documents and any generated stock certificates. Clicking Continue will send the documents out for legal review. Once the legal review has been accepted, your cap table will update to reflect the exchange. If certificates were generated as part of the exchange the system will send out notifications to obtain the necessary signatures. 

Screenshots are for illustrative purposes only.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

Fidelity Private Shares LLC provides cap table management and other administrative services to private companies and their equity compensation plans.

Fidelity Private Shares LLC

© 2024 FMR LLC. All rights reserved.

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