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Types of Public Shell CompaniesNon Reporting, Non Trading This type of shell company has never done a registered offering or completed a registration with the SEC. Non Reporting shell companies are not required to file reports with the SEC. Most brokerage firms will not trade Non Reporting company shares. Non Reporting shells can’t be listed on any exchange except the Pink Sheets. Rule 419 Shell, Non Trading This type of shell company has completed a registration with the SEC and is subject to Rule 419. This rule requires an additional SEC filing and shareholder approval prior to completing a Reverse Merger transaction. This is the only type of shell company that requires shareholder approval prior to a Reverse Merger. When the procedure has been completed and the Reverse Merger closes, most brokerage firms will trade Rule 419 companies. Reporting, Non Trading This type of shell company has completed a registered offering or a registration with the SEC. Reporting shell companies are required to file reports with the SEC and abide by the 1934 Securities Act. All brokerage firms trade Reporting companies. Reporting companies can be listed on all U.S. stock exchanges. Non Reporting, Trading This type of shell company has never done a registered offering or completed a registration with the SEC. Non Reporting shell companies are not required to file reports with the SEC. Most brokerage firms will not trade Non Reporting company shares. These shells trade on the Pink Sheets and can’t be listed on any of the other stock exchanges unless they are able to complete a registration, which most cannot. Reporting, Trading Shell This type of shell has completed a registered offering or a registration with the SEC. . Reporting shell companies are required to file reports with the SEC and abide by the 1934 Securities Act. All brokerage firms trade Reporting companies. Reporting, Trading shells trade on the OTC Bulletin Board and can be listed on any U.S. stock exchanges if the merged company meets the financial qualifications of a particular stock exchange. Bankruptcy Shells The bankruptcy court has the power to allow a Chapter 11 debtor to issue new securities to creditors and stakeholders that are not subject to the distribution and registration requirements of the SEC. In some circumstances the securities issued can be free of restriction and allowed to trade. If these companies were reporting companies prior to bankruptcy, they retain their reporting status. Most companies in Chapter 11 are non-reporting which would require the company to file a registration statement with the SEC prior to the shell benefiting for the bankruptcy courts allowing a securities distribution.
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