Blank-Check Company

DEFINITION of 'Blank-Check Company'

A company in a developmental stage that either doesn't have an established business plan or has a business plan that revolves around a merger or acquisition with another firm.

BREAKING DOWN 'Blank-Check Company'

These companies are generally speculative in nature and will issue penny stock in order to finance future operations.

According the Securities Act of 1933 (under Rule 419), blank-check companies are required to disclose the terms and conditions of their offering as well as place any funds received from the offering into an escrow account.

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RELATED FAQS
  1. What is a blank-check company?

    A blank-check company is a development-stage company that either does not have an established business plan or its business ... Read Answer >>
  2. What's the difference between a merger and an acquisition?

    Learn about the difference between mergers and acquisitions. Discover what factors may encourage a company to merge or acquire ... Read Answer >>
  3. Why are the terms 'merger' and 'acquisition' always used together if they describe ...

    Learn about mergers and acquisitions and how these two corporate actions differ based on the size and participation of the ... Read Answer >>
  4. What is the difference between a merger and an acquisition?

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    In a general sense, mergers and takeovers (or acquisitions) are very similar corporate actions - they combine two previously ... Read Answer >>
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