Shelf Corporations

Shelf Corporations

Shelf corporations are those that have no activity so they are said to have been placed on a shelf. The reason that the corporation is kept in this manner rather than ended is because there are plenty of people out there who would rather purchase one of these shelf corporations than start one from scratch. This helps them obtain contracts that require the business to be established for a length of time before they can place a bid on them. Since it gives the appearance they have been in business for a long period of time it can be easier to establish relationships with customers and with creditors.

For this reason shelf corporations aren’t always seen as the most legitimate method of establishing a business for yourself. While you aren’t committing fraud when you promote shelf corporations you aren’t being honest either about the time frame of your particular business. Many lenders have caught on to the way shelf corporations are promoted and they will ask specific questions to find out if you have something to hide along these guidelines.

The selling of shelf corporations continues to be quite profitable though in the United States, Canada, and parts of Europe. Many shelf corporations are established with the goal of being able to sell them later for a profit. If you are considering buying any shelf corporations make sure you take a close look at the reputation they have as well as their financial dealings. You don’t want to find out your shelf corporation doesn’t have a good record with consumers or creditors because you will have a difficult time as well under that business name.

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