You may have heard of shelf corporations—companies formedand left “on the shelf” to age until sold. Some business owners see them as shortcuts to credibility, but they come with real pros and cons.
Pros:
- Aged corporations can make it easier to access credit.
- They may help establish vendor trust faster than a brand-new entity.
- Useful for those seeking contracts requiring established businesses.
Cons:
- Not all lenders recognize shelf age—many look at operations, not just incorporation date.
- Some states and banks scrutinize shelf companies closely for fraud risks.
- Can be expensive and unnecessary if not structured properly.
Legal Considerations:
It’s critical to comply with state and federal laws when acquiring or using a shelf corporation. Failing to update ownership records, licenses, and tax IDs can cause major issues.
PAC Consulting helps clients in all 50 states evaluate whether a shelf corporation makes sense and ensures it’s structured legally and effectively.