A few good things to know before buying a shelf corporation

When you want to know about an industry or a niche, it is always good to start from the fundamentals. This allows you to gain an in-depth understanding and prevents you from becoming a fraud victim. It also allows you to maximize the benefit that can accrue from following a particular financial strategy. If you are in the market for a shelf company, we hope that your basics are clear. If you have any doubts, carry on reading, or visit our website, and we'll be glad to give you clarifications.

Fundamentals of shelf corporations

For the shelf corp segment in which we operate, let us begin with the question, what is a shelf corporation? Well, a shelf corp is a company with no previous operational history, but one that has existed for some time. All its regulatory formalities are complete and updated regularly. So, why do owners and sellers do this? The more age a shelf corp acquires, the better are its funding prospects in the hands of a business owner. Banks and financial institutions consider longevity as one of the main parameters on which they evaluate loan applications. So, shelf corps offer the benefit of age, nothing else!

If you understand this fundamental, you will avoid most shelf corporation scams. One such example is where sellers offer shelf corps with previous history and credit lines. But if you go back to the definition, you will see that a shelf corp cannot have an operating track record. Thus, you can make out that the offer is fake. However, buyers have fallen for such scamsters and paid a heavy price. Some found out to their horror that these firms have unpaid liabilities from the past. Instead of access to more funding, they had to assume these liabilities without recourse; the scamsters had disappeared a long time ago.

Another thing to check about your target shelf corp is the regulatory records. Ensure that your due diligence both on the seller as well as the target company is thorough. Ensure that all taxes and fees are paid, and there are no unpaid liabilities. Also, check whether the vendor actually owns the shelf corp in question. If you do this, you will not fall into another common fraud. Scamsters try to sell you a shelf corp, which they do not own! In such a case, you might get tangled in litigation with the owner, and you might not have any recourse but to surrender your stake in the company.

To avoid becoming a victim, it is essential to exercise caution and use prudence in selecting a vendor. You should prefer vendors that have been in the segment for multiple years and have accumulated lots of reviews and feedback. Take our case, for example, you can examine loads of Wholesale Shelf Corporations reviews online and make a balanced call based on these. For those that do not have such a robust presence, exercise abundant caution!