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πΊπΈ US · US taxRestricted securities
Also called: restricted securities, restricted stock (securities-law)
In one line
Shares acquired privately that can't be freely resold until a holding period and conditions (under Rule 144) are met.
In plain English
Shares you get from a private company are 'restricted' under securities law: you can't just sell them on the open market. Rule 144 sets when and how you eventually can, usually after an IPO.
If you were explaining it to a 5-year-old
Special toys with a 'do not resell yet' sticker β you have to wait and follow rules before you can sell them in the big shop.
Why it matters when you sell
Your shares' restricted status limits how and when you can sell, which is why private secondaries need specific structures and approvals.
Related terms
Put it to use
When you're ready to go deeper, there's an optional Equity Toolkit and Report.
Sources
Primary references for this term: US SEC / Investor.gov, IRS (US tax). Our definitions are written in plain English and kept evergreen β see the glossary methodology. General information, not advice.
Educational information only β not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.