Shelf Corporations/Aged Corporations
View PDF | Print View
by: searchrankpros1
Total views: 4
Word Count: 679
When it comes to starting a business, one of your most important concerns will be building credibility for that business. This can take years upon years to achieve through traditional business practices. If you’re looking for a faster means of gaining credibility, consider purchasing a shelf corporation rather than starting fresh.
What’s a shelf corporation? A shelf corporation, also known as an aged corporation, is one that has been created but hasn’t actually conducted business since it was first created. In most cases, no assets or liabilities have been purchased or acquired by these companies, and they don’t have any stocks or material value. They’re ultimately an existing company that isn’t operational because they’ve been set aside for aging purposes.
What makes people want to purchase these shelf corporations?
First of all, purchasing a shelf corporation is a much faster process than starting a new business from scratch. There’s no start up to be done. Everything has already been taken care of. All that needs to take place with a shelf corporation acquisition is the transferring of documents and rights, which usually only takes a few hours of paperwork.
A shelf corporation also has more credibility than a new business, with everyone involved. Patrons are more likely to shop with or use the services of a company that’s been around longer, because they recognize the name and are familiar with the company. Also, lenders are more inclined to loan money to shelf corporations because they’ve been established long enough to have a good corporate credit standing; getting loans with a brand new company is very difficult. Another benefit of shelf corporations comes in dealing with government contracts. Usually, government contracts require businesses being operational for at least two years before being awarded these contracts, so buying a shelf corporation makes you immediately eligible.
When you decide to purchase a shelf corporation, there are many things to consider. You need to check the reason for the company being shelved. After all, you don’t want to purchase a company that has been set aside because of bad business practices, liabilities, or other negative associations. By acquiring a shelf corporation to add history to your company, you will influence potential investors; whether the influence is positive or negative depends on the company you buy, so be sure to check everything out before you agree to acquire any shelf corporation.
One way to check up on the different companies that already exist is to search the internet. Some companies will have existing relationships with other companies or lenders, which will be a benefit to you. Other shelf corporations might not have any relationships built yet, so they won’t help you to establish credibility as fast when nothing exists but the company itself. You need to be sure that you’re making a good investment before you purchase anything.
The cost is a major factor in shelf corporations. Obviously, the more established corporations that have been around longer will be much more expensive than younger companies that don’t have as many relationships. Prices range from a few hundred dollars to hundreds of thousands of dollars, so be sure that you’re not paying too much for a company that isn’t worth it.
What you get for your money is also important to consider. If you’re purchasing a shelf corporation that comes complete with all the documents, bylaws, articles of incorporation, and so on, you will always pay more, but you’ll have less work to do on your end. Other companies will only offer the minimum information and documentation, so they will cost less but require more work. It all depends on how much you want to do on your end, and what you can afford.
You need to weigh the pros and cons of purchasing a shelf corporation in order to determine if it’s advantageous for you or not. If the advantages are more numbered than the negatives, then this could be a good investment. If not, you might want to consider another route for business ownership.
About the Author
United Business Credit can help you build up to $250,000 in Business Credit without any personal credit or guarantees. We can also help you get <a href="http://www.ubcredit.net/">unsecured Business Credit</a> cards and Business line of credit. Give us a call today.
Rating: Not yet rated