A shelf corporation, shelf company, or aged corporation is a

company A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared ...

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...

that has had no activity. It was created and left with no activity – metaphorically put on the "shelf" to "age". The company can then be sold to a person or group of persons who wish to start a company without going through all the procedures of creating a new one.

Reasons for buying

Common reasons for buying a shelf corporation include: * To save the time involved in taking the steps to create a new corporation. * To gain the opportunity to bid on contracts. Some

jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. J ...

s require that a company be in business for a certain length of time to have this ability. * To show corporate longevity in order to attract consumers or investors. * To gain access to corporate credit. These reasons are open to criticism. Many years ago, it would take months to properly incorporate a business. However, it is now quite easy, at least in

Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country by ...

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by to ...

, the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

Western Europe Western Europe is the western region of Europe. The region's countries and territories vary depending on context. The concept of "the West" appeared in Europe in juxtaposition to "the East" and originally applied to the ancient Mediterranean ...

and

Dubai Dubai (, ; ar, wikt:دبي, دبي, translit=Dubayy, , ) is the List of cities in the United Arab Emirates#Major cities, most populous city in the United Arab Emirates (UAE) and the capital of the Emirate of Dubai, the most populated of the 7 ...

, to do so. In fact, it can now be done in as little as a couple of hours in some jurisdictions. In Australia, a new company can get registered within 10 minutes. A corporation might end up "on the shelf" precisely because of a bad business history. A number of consortia "produce" and sell shelf corporations, promoting the fact that the new buyer can at the same time have a corporation with a long history, and yet have complete control over the establishment of the corporation's

board of directors A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit orga ...

and shareholder profile. One item to be aware of is the re-aging of the shelf corporation. If the credit bureaus learn about the company being under new management, they will list it on their reports, effectively "re-aging" the company.

Examples

A Reuters report described Wyoming Corporate Services as an example of a vendor of shelf companies, which were literally stored in mailboxes labelled as "corporate suites" in the main room of a brick house a few blocks from the Wyoming State Capitol. Over 700 companies were available at prices depending on their age, ranging from $5,995 for a six-year-old company to $645 for one recently created. It is one of scores of similar businesses setting up shop, primarily in Delaware, Wyoming, and Nevada due to regulatory considerations.

References

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Reasons for buying

Examples

See also

References

Further reading