Search
  
Home Contact Us About Us

You cannot create your own trading public shell.

 
You cannot create a shell without free trading stock, that is - stock that can be sold free and clear of all SEC restrictions on resale.  These are the reasons you will not be able to create free trading stock necessary for a "trading shell:"
 
  • The SEC doesn’t allow you to register stock in a shell company under the 1933 “Selling Stock” Act. Thus, you cannot obtain free trading stock by filing with the SEC.
 
  • The SEC, under Rule 144, does not allow stock in a shell company sold in a private offering without registration to be free trading.
 
  • You probably can’t raise $5,000,000 and have a stock price above $5.00 per share.  If you could, you would be creating what is called a SPAC or Special Purpose Acquisition Company, which is the sole exception to bullet point 1 above in which the SEC will actually let you file a 1933 Act Registration Statement and get free trading stock.

Notwithstanding the foregoing, professionals are asked all the time to help create trading shells.  They can't.  Here's why:


A “blank check company” doesn’t work: Even though this company is created through a filing with the SEC under the 1933 “Selling Stock” Act, the SEC has a specific rule, Rule 419, that provides that, even though registered, stock in this kind of a shell cannot trade so long as the company is a shell company.


A Form 10 shell doesn’t work: A Form 10 shell has no free trading stock because it has no stock registered under the 1933 “Selling Stockholder” Act.
 

A phony business plan Footnote 32 Shell doesn’t work: Although this shell has free trading stock because it was created through a filing with the SEC under the 1933 “Selling Stock” Act, the company's business plan is phony, meaning the company didn't really intend to enter in to the business as claimed.  The filing is a ruse to get around the law and inappropriately and illegally create a trading shell.  The SEC has said in Footnote 32 to a 2005 Release concerning shell companies that it is illegal to create a shell this way.
 
 
 
 
 
Additional Resources:
This site provided by Williams Securities Law Firm, Michael T. Williams, Esq., Tampa, FL