Introduction of the representatives » Shelf company acquisition

A shelf company, also sometimes called a shelf or aged corporation, is a company that has been incorporated some time ago, but was not operationally active, therefore – has been put on shelf. While a ready-made company has similar characteristics, the main difference between both is that ready-made company has been registered recently as opposed to a shelf company.

Shelf companies are generally divided into two categories: a new shelf company, or an aged company:

Acquisition of a new shelf company provides you with a guarantee that this business has not engaged in trading, is clear of debts and has a perfectly clear history. The investor can be certain that it will be possible to start the business operations without any administrative or financial burdens that could have occurred prior to purchase. Generally, these companies have been created in the past with the sole purpose of selling them later as a ready-made company. In this case, the seller is able to show a certificate confirming that no trading has taken place and the company is free of any business debts and liabilities;
Acquisition of an aged shelf company provides you with a previously active business with its trading history and possible liabilities. Therefore it is crucial to receive a letter of confirmation from the seller that any commitment – including debt – prior to acquisition are incumbent upon the seller instead of the buyer. Aged shelf companies are preferred for commercial and branding purposes.
Advantages of a shelf company acquisition
The new shareholders can gain from various benefits if they prefer an acquisition of already established company instead of incorporating a new one. Below are the most common benefits:

Often may be done remotely – generally, an acquisition of a ready-made company is also allowed from abroad – the shareholders are not required to take part in the process of acquisition in person. In this case, the buyer receives a sample of power of attorney via e-mail, which then needs to be signed, legalized and sent back by post. With the power granted by the power of attorney, new shareholders of the company are registered and all corporation documents are sent to the buyer by post. Afterwards, bank account can also be opened remotely. This procedure may differ among countries and service providers;
Less time-consuming – among other benefits, one of the most important one is a possibility to save time through an acquisition of a shelf company. While the average time needed to incorporate a new company differs greatly among countries, according to World Bank, the average time to start a business in the world was almost 21 day in 2016. The acquisition process is believed to be simple and straight forward and the company is able to begin its operations immediately. Furthermore, all service providers will advise on all uncertainties, facilitating the acquisition process;
May be acquired as a whole package – one of the reasons why an acquisition of a ready-made company is less time consuming is the fact that the buyer is able to acquire a fully registered company with a VAT and registration number, particular licenses, if needed, and even a bank account. In addition, usually the new owner receives all documents and tax returns that have been submitted to the office prior the purchase. Although an acquisition of a shelf company will cost you more than opening a new company, this option can even be more cost-effective if taking account the time saved and a possibility to start earning money almost immediately.