Blank-Check Company

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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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Blank Endorsement

    A signature by the creator of an instrument, such as a check, ...
  3. Penny Stock

    A stock that trades at a relatively low price and market capitalization, ...
  4. Blank Check Preferred Stock

    A method companies use to simplify the process of creating new ...
  5. Escrow

    A financial instrument held by a third party on behalf of the ...
  6. Merger

    The combining of two or more companies, generally by offering ...
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