This is a company or corporation that is inert and carries no active functions. The shelf company that has had no activities can then be sold to person(s) who have the interest in it and do not want to go through the procedures of starting a new company. Usually there are numerous reasons and interests making one want to purchase a shelf company. Some of the reasons are:
• So that the buyer(s) gets in business of getting contracts and orders as soon as possible. Some rules and regulations require a company to have been in operation for along period of time before it is allowed to carry out bidding requests. But after buying such companies that are registered but have been inactive you stand a chance of getting the contracts
• Another main reason for buying a shelf company is to save time, hustle, and bustle involved in the process of doing the of paperwork and necessary documents required to set the company up
• To create a sense of trust and boost to other investors who will perceive your company to have stayed in the market for long and hence do business with you. No one wants to work with an amateur, so the longer your corporation has withered the storm the better it gets when it comes to fervors.
• To get access to resources such as loans and other credits. It is very easy for another company to get a guarantor if it has been in operation for long than one starting today.
• To get a leeway to investing capital. Investing here stands for directing a resource from being consumed today to creating profits tomorrow. Or simply it is the use of assets to gain income.
Those are some of the reasons as to why individuals go for shelf companies. Though setting up a company might be tedious some countries are making their jurisdictions more flexible in-fact some care even registering companies in a couple of hours Countries like the Belize, British Virgin Island and Seychelles are encouraging investors by registering a company in few hours.
Shelf companies may come as a result of poor governance and bad taste of business history. In-fact there has been debates as to whether financial institutions are giving the shelf companies capital anymore because it is understood that a business’s history is looked upon as due diligence before an investor or a creditor grants cash. Remember before an investor grants your company he has to investigate the asset, liability and other factors if a bad reputation is discovered then the dream of funding sublimes.
One very important factor to consider when re-ageing or purchasing a shelf company is that you should be careful the credit givers do not learn that your company is re-ageing because they will definitely include that in their reports. This report may tarnish your chances of acquiring the loan that you badly need to set-up this company.
If you successfully acquire a shelf company then get control over the establishment’s board of directors and shareholders profile.
• So that the buyer(s) gets in business of getting contracts and orders as soon as possible. Some rules and regulations require a company to have been in operation for along period of time before it is allowed to carry out bidding requests. But after buying such companies that are registered but have been inactive you stand a chance of getting the contracts
• Another main reason for buying a shelf company is to save time, hustle, and bustle involved in the process of doing the of paperwork and necessary documents required to set the company up
• To create a sense of trust and boost to other investors who will perceive your company to have stayed in the market for long and hence do business with you. No one wants to work with an amateur, so the longer your corporation has withered the storm the better it gets when it comes to fervors.
• To get access to resources such as loans and other credits. It is very easy for another company to get a guarantor if it has been in operation for long than one starting today.
• To get a leeway to investing capital. Investing here stands for directing a resource from being consumed today to creating profits tomorrow. Or simply it is the use of assets to gain income.
Those are some of the reasons as to why individuals go for shelf companies. Though setting up a company might be tedious some countries are making their jurisdictions more flexible in-fact some care even registering companies in a couple of hours Countries like the Belize, British Virgin Island and Seychelles are encouraging investors by registering a company in few hours.
Shelf companies may come as a result of poor governance and bad taste of business history. In-fact there has been debates as to whether financial institutions are giving the shelf companies capital anymore because it is understood that a business’s history is looked upon as due diligence before an investor or a creditor grants cash. Remember before an investor grants your company he has to investigate the asset, liability and other factors if a bad reputation is discovered then the dream of funding sublimes.
One very important factor to consider when re-ageing or purchasing a shelf company is that you should be careful the credit givers do not learn that your company is re-ageing because they will definitely include that in their reports. This report may tarnish your chances of acquiring the loan that you badly need to set-up this company.
If you successfully acquire a shelf company then get control over the establishment’s board of directors and shareholders profile.
