Increasingly, new business owners are turning toward shelf corporations and companies as a way to gain almost instant credibility for their businesses. In short, a shelf corporation is one that was created, but has not conducted business. Typically, it has neither assets nor liabilities and it has not issued stock. It has been set aside to age; hence these self corporations are also often referred to as aging or aged corporations. Similarly, a shelf company refers to a limited liability company (LLC) that has been allowed to age.

• It can be quicker to buy a shelf corporation than it is to go through all the steps of creating a new one, which might take weeks, if not months. Buying a shelf corporation and transferring the associated documents can be completed within a few hours.
• Potential investors often see an established corporation as being more attractive than a new one.
• Potential lenders may be more inclined to offer credit to an older corporation than to a newly created one.
• Customers often feel more confident about doing business with a corporation that has a history.
• In some cases, government contracts can only be awarded to a business that has been in operation a minimum amount of time, usually two years.

However, there are a few potential problems with shelf corporations. For example, you want to make sure that the shelf corporation you plan to purchase was not shelved because of previous bad business practices, such as poor credit, and that there are no liabilities attached to it. Also, investors and lenders most likely will take a close look at any business before making a commitment. This means that they will discover that it is an aged or shelf corporation. This may or may not influence their business decisions.

With all this in mind, before purchasing a shelf corporation or company, you want to make sure that it is legitimate, has a positive history and provides what you need. A quick search of the Internet shows hundreds, if not thousands of sources for shelf corporations. Not all are created equally, so make sure you know what you are getting for your money. Some may offer little more than the entity itself, while others have taken the extra steps to include existing relationships with lenders, established lines of credit and credit ratings.

Another consideration is age. You will find some shelf corporations that are only a few months old, while others may have been created years ago. As a rule of thumb, the longer the lifetime, the greater the cost. Cost can range from a few hundred to thousands of dollars.

Cost may also depend upon content. Some providers may include almost everything you need to get started, including articles of incorporation, bylaws, meeting minutes, stock certificates, an employee identification number and other similar documents. Others provide only the minimum and you will need to create the rest for yourself.

When deciding whether a shelf corporation is right for you, first make sure that the benefits outweigh the cost. If you don’t, you may find that you are spending money that could better be invested elsewhere in your business. Ultimately, however, only you can make the final determination if a shelf corporation can give your business the jumpstart it needs