It is a business that has a hybrid nature and it has the characteristics of not only a corporation but a partnership as well. This provides more flexibility for the owners as they only have a limited liability for the debts and the actions of the company. The LLC is better suited for the smaller company that only has a single owner. The LLC is rather a new type of business entity here in the United States.

Adopted in Wyoming in 1977, now LLCs are able to be created in every state of the union. The LLC is seen as a way to help the small business gain the benefits that are enjoyed by large corporations; it still allows them to keep a small business model of ownership.

What exactly does limited liability mean for those of us who are not savvy in legal terminology? Once the small business decides to become an LLC, the owner of the business is much less responsible for prosecution and other debt issues which may plague the business. If bankruptcy has to be declared, the business owner can rest assured that his or her personal finances will not be caught up in the problems of the business.

Now on to the next subject which is a shelf corporation. This is also known as an aged corporation. It is called this because it has had no activity. It was formulated and, as it were, put on the shelf to mature. This corporation may then be sold to someone who would rather have an aged corporation and simply not a brand new one. A business entity that has been created by a means other than incorporation is simply known as a shelf company.

What are some of the reasons that a person would want to buy a shelf corporation? Some of them may include the following:

- To act as a time saver. It takes time to create a new corporation.

- There would be the chance to bid on contracts. Some places may require a certain time limit for the company to be in business before it can do this.

- It may appear that the business has been around for a long time which may add to investor or consumer confidence.

- It may be easier to acquire investment capital.

- It may be easier to obtain corporate credit.

There are a number of websites on the Internet that make it their business to produce and sell shelf corporations. This will assure that the new buyer can have a corporation that has a long history while at the same time being able to have entire control over setting up the corporation’s shareholder profile and its board of directors.

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There are tons of companies in the market which are selling Cheapest Aged corporations, but the buying should be done wisely and backed on genuine sellers so that one does not invite troubles in the form of liability and loans. The best place to buy Cheapest Shelf Corporations and too with the quality guarantee is http://www.AgedCorporationStore.com. As the company has just launched and is offering some great rates and the price charged are literally drop down.

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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.

See also

• Shell (corporation)

References

• Michael Spadaccini, Incorporate Your Business: In Any State (2007), p. 253.
• Mark William Walma, Patricia McCann-Smith, The Fundamentals of Corporate Law and Procedure (2000), p. 54.

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Guarantee of Obtaining Corporate Credit

Warning! You have probably heard a lot of different companies making claims about how they can guarantee to get your business or corporation, credit. They may say things like, “with our credit building program, we guarantee that you will get up to $20,000 or $50,000″ and so on.

The key wording is “up to”, because they really do not know if you will get the full amount of funding needed for your business. What they know that you do not is the lending criteria of the common business creditors. They know the most likely creditors that will say yes based off of your business credit profile and your personal credit scores.

These can be valuable services, since they can help to decrease the time it takes to fund your business and help to find the creditors that are more likely to approve your credit application. However, what is not in the sales copy is the fact that most of the credit building relies on retail vendor credit, such as, your local office supply stores or home supply stores to build out a Dun & Bradstreet credit profile.

To obtain “real money” lines of credit, you are going to need a good personal credit score of at least 620 but preferably 680 or better. Don’t worry bad credit does not stop you from building credit in your business the process may just take longer.

Guaranteed credit card or lines of credit

These services may even offer a credit card just for being their client, but it is usually only credit for their services and/or products. There have even been companies offering programs were they claim you can receive up to $100,000.00 in cash credit for a fee of $5,000. Does that sound too easy? Keep in mind, if it was that easy, most small businesses would have an easy time obtaining the needed funding.

If you personally have $5,000 that you can utilize to build corporate credit, you would be better served going to a bank like Wells Fargo and getting a business secured credit card which can become unsecured with a good payment history. Just remember “Buyer Beware.” If it sounds too good to be true, it probably is.

Buying Aged Companies / Aging Your Business

There is a popular belief that you can quickly obtain a large amount of credit by purchasing a Shelf-Corporation. Well in some cases you can. After all, most business credit applications will ask for a personal guarantee if the company is less than 2 years old. In order to do this, you really have to investigate the so-called shelf- corporations.

The first thing you need to investigate is whether or not a negative history is attached to the company and that the tax I.D. number is as old as the company .It is also important to make sure all of the companies documentation is up to date and the company should have a bank account that is no less that 6 months older than the company, unless the company has been in business for a long time and the bank account is about 1-2 years old. Basically this should be a real company that has been doing real business, not just documents someone filed in hope of selling it off as an aged corporation at a later date.

Do your homework, because there are a lot of companies that say they have aged corporations or shelf-corporations they can sell you. Always ask a lot of questions and make sure that the corporation you are purchasing is a real business. Not just papers filed with the state.

Final Word

The business credit industry is not regulated by the government the same way personal credit is, therefore you will have to do your homework when speaking with a credit building service and ask a ton of questions.

Just because a company has been in business for a long time, does not mean they are not over charging for their services or that you are getting the kind of service that is advertised. If the program sounds too easy or too good to be true, then you are most likely wasting your money. Keep this in mind. It takes years to establish a good business credit history not months.

Erik Salmon, CCFC, is the author of “The Art of Corporate Credit & Finance” and has consulted with over 10,000 companies on how to build corporate credit and fund business ventures. If you would like to find out more about business financing visit http://www.makeitandkeepit.com

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An example would be a corporation filed with the Secretary of State in any state but that was never actively used, it was kept on the “shelf”. Usually a company may file many corporations at one time with the intent of not using them but keeping them for resale at a future date. The older they corporation gets the more value it is perceived to have.

One of the reasons they cost more is there are fees associated with keeping the corporation current. The fees differ in every state, some states may cost $850 per year just to keep it active and some may only be $50 per year. These are things you need to weight when thinking of getting a shelf corporation. Depending on your goals it may or may not be an advantage to you to purchase a shelf corporation.

I have seen corporations over 10 years old being sold for $20,000. In my opinion there doesn’t seem to be an advantage of ever purchasing a shelf corporation over 2-3 years old. You may just be spending money on something that will not really provide any value to you.

One thing you definitely want to know is the history of the corporation. It may be a entity that was actually used many years ago and the owners let it lapse so it may have outstanding liens or debts against it. If you take it over you may become responsible for those debts, so always do your homework.

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