I am not certain is you are aware of shelf corporations or not. It seems most people are not.
A shelf corporation, also known as a dormant or aged corporation, is a legally formed company that has been left inactive without any business activities for a certain period of time.
Key points about shelf corporations:
Purpose and Benefits:
– Shelf corporations are often created and left dormant to “age” before being sold to buyers who want an established company without going through the process of forming a new one.
– Common reasons for purchasing a shelf corporation include saving time, gaining the ability to bid on contracts requiring a certain length of business history, demonstrating corporate longevity to attract consumers or investors, and potentially accessing corporate credit more easily.
Characteristics:
– Shelf corporations have no prior business activity or operations.
– They have a clean financial history with no assets, liabilities, bank accounts, or credit lines.
– They are maintained in good standing with the state through payment of required fees.
– They come with articles of incorporation, bylaws, and other formation documents.
Considerations:
– Legitimate shelf corporations should have no existing credit lines or financial history.
– Buyers should be cautious of vendors claiming to sell shelf corporations with built-in credit, as this may indicate fraudulent activity.
– The age and price of shelf corporations can vary significantly, from recently formed to decades old.
– Foreign entity registration may be required to operate the corporation in a state different from its formation state.
Legal and Ethical Concerns:
– Creating fake financial documents or misrepresenting the corporation’s history is illegal.
– Lenders may require actual financial history and documentation for the company.
– The practice of “re-aging” a shelf corporation by hiding the change in ownership can be problematic.
It’s important for potential buyers to thoroughly research and understand the implications of purchasing a shelf corporation before proceeding.