Enter to open, tab to navigate, enter to select
Blank Check Company
Practical Law Glossary Item 4-382-3272 (Approx. 2 pages)
Glossary
Blank Check Company
A company that meets the following criteria:
- It is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person.
- It is issuing penny stock.
(Rule 419(a), Securities Act.)
Rule 419 imposes restrictions on any blank check company that wishes to conduct a public offering of its securities through the SEC registration process. Almost all money raised is put in escrow pending an acquisition. The securities being offered are also placed in escrow, so no trading occurs before completion of the acquisition.
For information on special purpose acquisition companies, see Practice Note, SPACs: Overview.
For information on reverse mergers, see Practice Note, Reverse Mergers: The IPO Alternative.