What is a shelf company?

A shelf company is a company that has been in existence for some time - this can be relatively short time or long time. They are sometime referred to as pre-formed companies or aged companies. Shelf companies usually have not had any previous business, but where created just to be sold as shelf companies.

Why would you want a shelf company?

There are many reason to have shelf company, but most people buy shelf companies, because it allows them to optain corporate credit. Most banks and other businesses will not give you corporate credit until you have been in operation for serveral year. It doesn't matter that your personal credit is good, they will not give the company credit. You can avoid this by buying a company that has already been in existance for more than the number of years that is required by the company offering you credit.

There can also be some benefit to appearing to be a existing player instead of a newley formed company. This is particularly true in bidding processes and also true with consumers who are more likely to buy your service because they think you will continue to be around.

How old should my shelf company be?

If you are buying the shelf company for credit reasons, you should just get it old enough that it qualifies you for credit. Since it costs more for an older shelf company, you should only get exactly what you need.