OTC Business Solutions
New York Ft. Lauderdale
Los Angeles
954-254-9064
After the privately held company selects a shell they obtain a majority of the stock at a minimum and over 90% at a maximum. A private company never obtains 100% of the stock of the shell as at least some of the stock is necessarily held by the public in the float. Name change documents are filed to update the name of the shell so it matches the name of the acquiring company. A board of directors is then formed.
Reverse Mergers are generally structured so that corporate officers and insiders of the privately held company retain more than 80% of the outstanding stock. Once again, exchange requirements vary in order for the shell to be listed and anywhere from 5% to 20% of the outstanding stock needs to be publicly traded stock; meaning not in the hands of insiders and affiliates.
