The stocks of commonly known businesses, such as General Mills and Microsoft do business on major, well-known exchange, such as the Nasdaq; however, they must be listed - that means, acknowledged for trading purposes by a regulated exchange – before truly trading on the exchange. When a business isn't listed, it will often trade on the Pink Sheets.
When a business is undergoing growth and is not able to meet the requirements for listing on the Nasdaq or NYSE, it may choose to be listed on the Pink Sheets. In such a case, a company may choose to test the waters of the Pink Sheets, using it as a stepping stone before going into the larger exchanges and markets.
Companies that are listed on the Pink Sheets are not required to meet minimum revenue or asset requirements, or file with the SEC. The Pink Sheets got their name because they used to be printed on ….guess what? Pink paper!, The Pink Sheets started out as a daily quotation service offered by the National Quotation Bureau. In general, businesses are listed on the Pink Sheets because they are too little to be listed on a national exchange. Large foreign companies, such as Nestle S.A. and Heineken have entered the American markets via the Pink Sheets.
When a company goes public on the Pink Sheets it helps if you have an investor relations program in place. Trading on the Pink Sheets can help aid your company in raising capital and with regulation d, private placements, and 506 offerings.
To trade on the Pink Sheets you need the services of a market maker and a 15c211 filled with the NASD, now known as FINRA (Financial Industry Regulatory Authority).