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

company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common p ...

or corporation 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 jurisdictions 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 state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

, Canada, the United States, Western Europe and Dubai, 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 organiz ...

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

{{reflist

Reasons for buying

Examples

See also

References

Further reading