Blank check company

{
  "id": "MLC-T-FIN-000047",
  "term": "Blank check company",
  "field": "Finance and investing",
  "term_source": "Blank Check Company",
  "definition": "A blank check company is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person. These companies typically involve speculative investments and often fall within the SEC’s definition of \"penny stocks\" or are considered \"microcap stocks.\"\n\nIn addition, a blank check company registering for a securities offering may be subject to additional requirements for the protection of investors, including depositing most of the raised funds in an escrow account until an acquisition is agreed to and requiring shareholder approval of any identified acquisition.\n\nA type of blank check company is a “special purpose acquisition company,” or SPAC for short. A SPAC is created specifically to pool funds in order to finance a merger or acquisition opportunity within a set timeframe. For more information, see our Investor Bulletin on SPACS.",
  "references": [
    "SEC Investor.gov Glossary"
  ],
  "url": "https://mlchart.com/terminology/finance/blank-check-company/"
}