Know To Read Between The Lines While Purchasing Aged Corporation
33867 08/19/2016 Financial Services 269 /Introduction:
Every country has its own rules about the incorporation of companies. Some of the rules could be stringent whereas some could be lenient. However, you would find red tape prevalent in most of the countries. In fact, an advanced country such as the US has a lot of red tape as far as registering new companies are concerned. This makes people resort to buying shelf companies. There are advantages of buying such companies. This article attempts to highlight the concept as well as the advantages to people buying shelf corporation.
The idea:
This is a very common word in business circles today. The concept of aged corporations has come to stay. If we are to define the aged corporation, we can say that these are ready-made business entities having gone through the entire process of incorporation and registration. They have not transacted a single deal and hence you can call them virgin corporations. There are many advantages of purchasing a shelf corporation.
The advantages:
You would be able to save tremendous time waiting for the registration and incorporation of your new company. These companies have already undergone this process. They are like the ready-made domain names you find when you go for the purchase of website addresses. Many people would like to change the names of the companies. There is no legal bar on doing so. However, one should not do it, as it would entail making changes in all the records. This could be a time-consuming process.
Applying for Government contracts requires you to prove that you have a record of accomplishment. A new entity, you would not be able to do it. Purchasing an aged corporation can help you in this matter.
You can build up your corporate credit history by using piggyback tradelines techniques either on the back of your own companies or your friends’. You get an immediate credibility. This can mask your personal credit score in the event of it not being satisfactory.
You will be able to show to your prospective clients and suppliers that you are in existence for a longer time that you actually are. This can improve the credibility factor and land you more business deals.
Purchasing an aged corporation for funding is the main objective for business enterprises today. This could give them greater access to banking channels and additional facilities. This could include fresh business lines of credit as well.
Points to have in mind while purchasing aged corporations:
The aged corporations have not done a single business transaction since their inception. Hence, these companies would not have any assets, liabilities, tax returns, and so on. Thus, if you come across someone trying to sell you an aged corporation with tax returns in tow, you should be on your guard. This could be a clear recipe for fraud.
You should ensure that your aged corporation is a virgin one. In the case of an existing shelf company, you should understand that you take the responsibility of the assets as well as its liabilities.
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