4.
Re: Off-the-shelf corporations, are they real? Jan 16, 2009 2:19 PM

in response to:
luv4freedom
The attorney in the office next to me creates "shelf aged corporations" (also called "seasoned" companies) and sells them (lots of corporate agencies and attorneys do).
Basically, the founder sets up a legal corporation, gets a virtual office and phone number, opens accounts with a few suppliers, maybe files for a DUNS number, etc. -- but doesn't really do any business (the corporation "sits on the shelf"). He'll take care of state filings, tax returns, and all of that as required every year. Over time, the corporation will build a credit history by simply staying in business and not having any bad marks. So, in general, the older the corporation is and the more was done over the years to make it look like a solid, well-established enterprise, the more "valuable" it is and the more that the attorney will be able to sell it for -- which is where the up-front fee you mentioned comes in.
So unless whatever enterprise you are considering would need to look like a solid, well-established enterprise from day one -- and it would be worth it to you to buy the aged entity from the person who set it up -- then there's no benefit. You'll build a brand new company's credit in the same way he did over time, and in most cases, it would be more logical to use your money to capitalize the firm. However, let's say you were
positive that you could bid on and win a government contract, yet the RFP for the job stated that bidders "must have been listed with D&B for at least five years" or something similar. Then buying a shelf aged corporation that met the requirement might make sense.
Hope that answers you question. Best wishes.