A public shell company whose shares trade on the Pink Sheets, i.e., it is listed by the National Quotation Bureau (NQB). The NASD and the SEC do not require pink sheet companies to maintain up-to-date reporting status or carry out expensive annual audits. Furthermore, there are no listing requirements for the pink sheets such as amount of capital, market cap, number of shareholders, share price, or amount of assets. A pink sheet company is subject to state and federal securities laws, but not to separate exchange regulations. In terms of pricing, pink sheet companies are normally priced lower than bulletin board companies because they are subject to the limitations of the Penny Stock Rules promulgated under the Securities Exchange Act of 1934.

Pink sheet companies exist in various forms including reporting and non-reporting as well as trading and non-trading. A pink sheet can be an excellent choice for a new or start-up entity on its way to morph into a publicly traded company.