No, a “shelf company” is not a company that sells shelves. When someone refers to a “shelf company”, they mean a previously formed corporation or LLC that is already in existence and can be purchased “off the shelf”.
In times past, when forming a company could take quite a while, many who needed to create a company fast would simply buy an existing shelf company. Now, with incorporation services like MaxFilings making it so quick and easy to form a corporation or LLC, you no longer have to buy a shelf company in order to create a company almost immediately.
However, there are other advantages a shelf company can provide. If you wish to acquire a company that already has age, shelf companies that have existed for many years can be found. Some may have established things like bank accounts, federal tax identification numbers (EIN’s), and tax returns. Of course, the older the company and the more it has to offer, the higher its price - and shelf companies can be quite pricey.
Is a shelf company the answer for you? While there may be some advantages, purchasing a shelf company will surely cost more and be more trouble initially than simply forming a new corporation or LLC. There will always be some house cleaning required. For example, shares/ownership must be transferred, directors/members must be replaced, and typically a name change will be desired. You should carefully weigh the advantages against the disadvantages. As usual, we at MaxFilings suggest you seek qualified professional advice if you are considering buying a shelf company.
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