| | Shelf company acquisition (5th Sep 22 at 11:46am UTC) |   | A shelf company, sometimes also called shelf or legacy company, is a company that was founded some time ago but was not operational, i.e. was put on hold. While a ready-made society has similar characteristics, the main difference between the two is that the ready-made society has only recently been registered as opposed to a shelf society.
Shelf companies are generally divided into two categories: a new shelf company or a legacy company:
Buying a new shelf company gives you the guarantee that this company has not traded, is debt free and has a complete history. The investor has the certainty that business operations can be started without the administrative or financial outlay that could have arisen prior to the purchase. As a rule, these companies were founded in the past only for the purpose of later selling them as ready-made companies. In this case, the seller can provide a certificate confirming that no trade has taken place and the company is free of business debts and liabilities;
Acquiring an aging shelf company provides you with a previously active company with its trading history and potential liabilities. Therefore, it is important to get a letter from the seller confirming that all pre-acquisition obligations – including debts – lie with the seller and not the buyer. Aged shelf companies are preferred for commercial and branding purposes.
Advantages of a shelf company acquisition
The new shareholders can reap various advantages by choosing to take over an already established company rather than start a new one. Below are the most common benefits:
Often also possible from a distance - in principle, the acquisition of a completed company from abroad is also permissible - the shareholders do not have to personally participate in the acquisition process. In this case, the buyer will receive a sample power of attorney by e-mail, which must be signed, notarized and sent back by post. With the power of attorney granted by the power of attorney, new shareholders of the company are registered and all company documents are sent to the buyer by mail. After that, the bank account can also be opened remotely. This procedure may vary by country and service provider;
Less time consuming – one of the most important benefits, among other benefits, is the ability to save time by acquiring a shelf company. While the average time it takes to start a new business varies greatly from country to country, the average time to start a business in 2016 was almost 21 days, according to the World Bank. The acquisition process is considered to be simple and straight forward. The company can start operations immediately. In addition, all service providers will advise on any uncertainties and facilitate the acquisition process;
Can be purchased as a total package - one of the reasons why acquiring a ready-made business is less time-consuming is the fact that the buyer can purchase a fully registered business with a VAT and registration number, specifically licenses if needed, and even a bank account . In addition, the new owner usually receives all the documents and tax returns that were filed with the office before the purchase. Although acquiring a shelf company will cost more than starting a new business, this option can actually be less expensive when you factor in the time savings and the ability to start making money almost immediately.
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