Introduction

The Record Common Stock Sale workflow is designed for recording purchases of Common Stock. Since these financings are less involved than normal Equity Financings (which create new stock classes), the Equity Financing workflow is too complex and doesn't always apply for these purchases. As such, the Record Common Stock Sale workflow functions as a simpler process which allows clients to upload these unique financings.

It's important to note that this workflow is only for recording Common Stock purchases. If the purchase is happening as part of a broader round of funding which includes sales of preferred stock, you can use the Equity Financing Workflow.

Running the Workflow

Getting Started

The Record Common Stok Sale workflow is found in the Financing section of the Start New Workflow page. This is an upload workflow; you'll need to have the Stock Purchase Agreement(s), Board Approval, and Stockholder Approval if applicable.

Upload Documents

During this step, you will be able to upload the Stock Purchase Agreement, and record the initial closing date. If there were multiple Stock Purchase Agreements, unchecking that box will prompt you to upload additional information in later steps of the workflow.

Select Investors

Click the Add Investor button to list out all of the investors who purchased Common Stock in this financing. You'll be listing the investor's name, the amount invested, and the number of shares purchased.

If you have multiple stock purchase agreements, you will be prompted to upload the agreement as part of the Add Investor step.

Provide Certificates

For each purchase, you'll be able to either upload, defer, or generate a stock certificate.

Upload Approvals

For the Board Approval, you'll be able to upload or defer the document and record the effective date. The same is true of the Stockholder Approval; however, it can be waived.

Checkpoint

Review the documents carefully and indicate if the workflow should first be reviewed by your legal counsel. When you are ready, click Continue. If you uploaded Stock Certificates, the workflow will now be complete, otherwise the generated certificates will be sent out for signature.

Charter Amendments

Sometimes, a round of financing requires a Charter amendment. Clients can still process the financing if it breaches the number of authorized shares available to the company; however, we encourage users to make an amendment to their charter first if the sale surpasses the authorized share limit. A constraints check within the workflow brings this to the client's attention.

Screenshots are for illustrative purposes only.

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

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