Shares of stock that the holder could trade on an exchange without restrictions. In other words, free-trading shares are shares in a company that have been registered for sale or resale or which can be traded pursuant to an exemption from registration. Technically, there are no purely free-trading shares as there are always specific resale restrictions on sellers of publicly or privately issued shares. Free-trading shares are typically subject to Rule 144 transfer restrictions. However, the Securities and Exchange Commission (SEC) has considered free-trading shares acquired in a “shell” transaction not qualified as free trading. Obtaining control of a clean company requires a sophisticated due diligence process.