Shelf companies areready made companieswhose primary purpose is to bypass the lengthy registration or incorporation process that can be required when forming a business.
Certain jurisdictions may take from 3 business days up to 3 weeks for the whole incorporation process to be completed. Shelf companies can be up and running within 4 business days. In some cases banks, government projects and investors will not provide credit ratings, projects or be interested to invest in newly formed companies. This is where shelf companies offer invaluable creditworthiness as they are able to show company history.
Benefits of a shelf company include:
- Shelf companies gain the opportunity to bid on contracts. Some jurisdictions require that a company has been trading for a certain length of time to have this ability.
- To show that the company has been up and running for some time in order to attract consumers or investors.
- Shelf companies can gain access to corporate credit.
- Clients generally trust companies that have been trading for a number of years.
- Usually, the older the company, the higher it’s standing in the business community.
- Opening a bank account for a shelf company is generally a faster process