In
many ways, a shelf corporation can strengthen your business presence.
A shelf corporation is often viewed as a great way to get your
business recognized, to establish integrity, and to substantially improve
your ability to get business credit.
For
example, in
most cases, if you contact a bank to apply for a corporate credit card or a
line of credit, you will have better success if your business is a couple of
years old, instead of a couple of months old.
Many large banks will not even consider a business credit application
unless the business has existed for two years, or longer. From the lenders
perspective, an older corporation reduces the risk involved should they
decide to issue you credit. Statistics generally show that at least 50% of
all new businesses fail within the first year, and the fact that your
corporation is a
couple of years old significantly reduces the risk in their eyes.
A
shelf corporation could mean the difference between getting the corporate
credit you need or being denied. It can also affect your credit limit and
the amount of interest that you will pay. Even more so in today’s
turbulent credit market, a shelf corporation can drastically improve your
financial success.
An
added benefit is that clients may find you to be more appealing when you
have some longevity behind you. Savvy clients often become more interested
in finding out how long a business has been in place before doing business
with it. If they see that you have recently opened your business, they may
choose to do business with a more established entity - possibly your
competitor. However, if the
purchase of a shelf corporation makes the business appear older, then they may view
your business as successful. Something
else to consider - if you do business with the government, in many cases contracts are only
offered and awarded to businesses two years or older.
And
it is very likely that your industry business partners may prefer only to do
business with what are perceived to be established partners. If your
business is viewed as new, or as a startup, your partners may feel that you
don't have the stability to handle their business or to meet their ongoing
needs. They may not want to be among your first customers and experience the
issues as a result of your learning curve.
As
a result, a shelf corporation can provide your business with immediate
credibility.
So,
you may ask - Is it legal to invest in a shelf corporation? Is it misleading
to lenders, consumers, and other businesses when promoting a new business?
And
the general response is - Owning and operating a viable business within a
shelf corporation is legal, and has been a common practice of many
successful business people for many decades. As a matter of fact, attorneys,
accountants and other credible professionals often provide shelf
corporations to their clients. You may also find those that say a shelf
corporation is just another strategy for the benefit of your business. As
always, you may need to consult with your legal counsel or accountant to
discuss your particular situation.
In
addition, there are plenty of factors you need to consider when securing a
shelf corporation. Most importantly, make sure it has a clean record with
the State of its origination, as you don't want to be connected with
complaints that have been previously filed against a business name. Also
make sure there are no pending tax liens or liabilities on file against the
corporation. And finally, be very cautious of brokers selling cheap
corporations that have recently been reinstated by the Secretary of State -
as these are generally not true shelf corps! If it is a legitimate shelf corporation that has never been
used, these items shouldn't be an issue.
Finally,
you also need to think about the cost. Depending on your viewpoint, a shelf
corporation can be expensive. But if considered as an investment in your
business growth, it can lead to many short and long-term benefits for your
business, such as increased sales, market penetration and overall financial
success.
NO
Upfront Fees