Readymade or established companies, at times also known as shelf companies, are the companies which are incorporated in previous years and also these companies remained to be inactive. The shelf companies will have certificate of non-trading that confirm that they are completely free from liens, free from judgements, and the shelf companies should not have any business debts or any business liabilities.
When you are buying the shelf company, you should always check that a company is dormant since its incorporation. As the Dormant companies will not have the bank account and also they will not be able to apply for the loans. You should always confirm about the non-trading of the business operations.
Reasons to acquire a shelf company!
- If you are planning to avail business loan from bank, or acquire the corporate credit cards, leases along with different credit facilities, the shelf company will be always in better standing as compared to the new incorporation
- Having an image and business history of a company may be significant to you – if the existence of the company is quite long, so definitely the credibility of the company will be high.
- Manufacturers and distributors often require a company for be in the business specific time period prior to doing the business
- In a similar fashion, other companies will also do business with older company prior to the brand new one
- Offering the longevity and improving the image of company with lenders and with client.
- In few countries, the government contracts are only being awarded to the companies which are trading for some years – hence, it is always a plus point with aged or shelf company.
- It also becomes hassle free to obtain a Business Visa and Work Permits for the directors of company directors of an established company
- For creating the appearance of corporate permanency, that may boost the confidence level of customer or investor
- It also helps to acquire access to the capital investment
- To get easy access to the corporate credit
What is the usability of Shelf Company?
The banking and business relationships are easily established with previously registered company, instead with the one which is lately incorporated. If the company is quite old, so definitely it will be able to acquire more confident business and business will feel trust to deal with them.
The manufacturers, Government Agencies and distributors often require the company for tenders who are in the business for any specific time period and age of a company is usually the key factor in business contracts, corporate banking relationships and to get the government tenders.
The Shelf companies also provides established longevity with operating history and this can certainly improve the Corporate image – it is always better if it is older and corporate credit becomes easy with age.
Large companies do the business only with aged or older company instead of working with the brand-new company. Also, there are some particular companies that will only do the business with old companies that are existed for no less than 12 months or even more.
Obtaining the bank loans is easy when you may show your company’s history, the age of the company is that matters the most. On the other hand, establishing the credit with banks, investors as well as with the leasing companies (many lenders need a minimum of 2 years history and generally 3 years of history to establish the great corporate credit history)
Procuring leases and corporate credit cards– Many credit card companies need that the business is in existence for last 2 years.
Advantages of Immigration and Business Visa for the directors of company and also their work Permit– with the help of an established and ready-made shelf company having more than 3 years history or track record is always a better option as compared to registering a new company.
The shelf company is basically an existing company with empty transaction, which might or mightnot be involved in the earlier business transactions.
However, buying a shelf company require some documents such as notarial deed, but process of transfer is yet quite less time consuming as compared to the process of incorporation of a new company.
The benefits of buying the shelf company usuallywere time factor as technically the shelf company may also be acquired in single day. However, disadvantage is that the shelf companies also are sold with some premium that makes the acquisition process of shelf company to be more expensive as compared to incorporating a new company.