Is it your goal to buy a limited company but you’ve no idea of how to tackle the paperwork and necessary legal regulations? There is a simple answer – a fast track to buying a limited company without any of the headaches. The easy solution is to buy a shelf company.
What is a shelf company?
It’s a ready made business previously registered at Companies House (if in the UK) but one that never went into trading but has merely lain dormant as a limited company. In other words it’s a business that has been put to one side or, as the name suggests, put “on the shelf” to age and the longer the better.
What are the benefits of buying a shelf company?
Immediate trading can start.
Although such a company won’t have a trading history, once it’s been bought, the investor will be able to start using the name for business immediately. Think of the instant credibility that brings to your business dealings.
No paperwork worries
With a shelf company, a business can be sold to a person or group without them having to worry about doing any of the official paperwork. The company will already have a URL, so you’d be buying a finished product.
As you’re buying a ready made company, there’s none of the time consuming process that goes into registering and creating a new corporation. All you have to worry about is getting on with trading.
These aged companies can help you gain opportunities to bid on contracts, as some jurisdictions require companies to have been in business for a certain length of time.
Access to corporate credit
Obtaining bank loans and credit facilities is made easier if you can show your company is not brand new. Most lenders require a minimum of two or three years history in order to establish corporate credit. Most credit card companies ask that a business has been in existence for at least 24 months before they will agree to corporate credit cards and leases.
Proof of corporate longevity
This corporate longevity gives greater ability to attract consumers or investors. Establish longevity improves your corporate image. Many large companies will refuse trading credit to newly formed companies. Some big companies will only do business with companies, which have existed for at least a year or more.
Benefits of hiring a professional broker
What you get when you buy a shelf company can differ enormously between brokers but with a good firm, should include some of the following:
- Registration at Companies House or the equivalent overseas
- A domain name
- A website hosting and design template
- Company email addresses
- Free accounting
- A Certificate of incorporation
- Statutory rights