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    3 Replies Latest reply on Feb 25, 2009 10:02 PM by NoBullFunding

    Shelf Corporations

    Harold Newbie
      Has anyone ever purchased a shelf corporation and then pursued lines of credit thereafter? If anyone has any information to share about them feel free to post your knowledge and opinions!

      Has anyone ever heard of or worked with Wall Street Capital Financing out of San Diego?
        • Re: Shelf Corporations
          LUCKIEST Guide

           

          A shelf corporation, shelf company, or aged corporation, is a company or corporation
          that has had no activity. It was created and left with no activity -
          metaphorically put on the "shelf" to "age". The company can then be
          sold to a person or group of persons who wish to start a company
          without going through all the procedures of creating a new one.

           

          Common reasons for buying a shelf corporation include:

          • To save the time involved in taking the steps to create a new corporation.
          • To gain the opportunity to bid on contracts. Some* jurisdictions* require that a company be in business for a certain length of time to have this ability.
          • To create an appearance of corporate longevity, which may boost investor or consumer confidence.
          • To gain access to* investment* capital.
          • To gain easier access to corporate* credit* .

          These reasons are open to criticism. Many years ago, it would take
          months to properly incorporate a business. However, it is now quite
          easy, at least in Australia, the United States, Canada and Western Europe;
          to do so. In fact, it can now be done in as little as a couple of hours
          in some jurisdictions. A corporation might end up "on the shelf"
          precisely because of a bad business history. It is questionable whether
          a shelf corporation improves access to capital, since creditors and
          investors look into a company's history as part of due diligence.

           

          A number of consortia "produce" and sell shelf corporations,
          promoting the fact that the new buyer can at the same time have a
          corporation with a long history, and yet have complete control over the
          establishment of the corporation's board of directors and shareholder
          profile.

           

          One item to be aware of is the re-aging of the shelf corporation. If
          the credit bureaus learn about the company being under new management
          they will list it on their reports effectively "re-aging" the company.
          The only way to avoid this is to make sure the credit bureaus do not
          find out.

           

          Hope this help, LUCKIEST
          • Re: Shelf Corporations
            NoBullFunding Scout
            Much like paying to build your credit, this is a waste of your time and money if your intent is to obtain credit in the name of a shelf corp....not to mention that its borderline fraudulent. There are no shortcuts in life, and if it sounds too good to be true, it probably is. Think about it, you pay someone else for their corporation and POOF, you are all of a sudden creditworthy? Please.

            The way to get approved for a line of credit is to have strong cash flow, good credit, and maybe even some collateral. Sure, you might get approved for a small line with this silly method, but for any significant dollar amounts, you need to be able to produce proof that you actually make money.

            In this time when the greedy are being punished, I hope all these snake oil salesmen who push aged corporations and "credit building" services get put in their place. God forbid you actually work for a living instead of bilking novice entreprenuers out of thier money.