When opting to start a company, many organisations may choose to go down the route of beginning with a shelf company. They are an ideal option for those looking for a company number instantly or if you need to operate as an older company. 

In this article, we will run through the benefits and possible disadvantages of using a shelf company. 

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• A step-by-step guide to forming a Limited Company

What is a shelf company? 

Shelf companies are essentially ‘ready-made companies’. They are companies that have been incorporated/formed in the past are currently dormant and have never traded. These companies can be bought and begin trading as soon as the transfer of ownership is completed. 

There are a lot of benefits from purchasing a shelf company in comparison to incorporating a brand new company. 

Benefits of using a shelf company.

Your business is up and running quicker 

The most significant advantage of a shelf company is the increased efficiency of formation. Forming a company from scratch does take more time due to the registration and incorporation process. A shelf company is particularly useful for entrepreneurs who need a registered company number right away. 

Instant credibility 

As a shelf company made a few years earlier, due to this it carries the credibility and gravitas of an older organisation. Older companies tend to have the perception of stability and reliability which brand new companies do not. Your shelf company will come with a pre-established corporate history which adds credibility. 

Access to contracts and funding

If you hope to score contracts or funding very early into your business journey, having a company with a corporate history can help. Aged companies may appear more reliable and a ‘better’ bet for funders or partners. For example, if a loan or grant stipulates your company must be one year old, a shelf company can prove it was formed a year or more ago compared to a brand new company. 

Disadvantages of using a shelf company 

Of course, there can be a few drawbacks to opting for a shelf company, primarily down to where you may purchase a shelf company form. 

Fewer customisations 

As a shelf company comes ‘ready-made’ it means it comes with a name. This may not be for you if you are aiming to build a strong brand, or already have an established brand which is tied to the name. However, some companies allow you to file for a Company Name Change service allowing you to update your company name and still purchase an aged company. 

Hidden Liabilities 

A few untrustworthy companies may sell you a shelf company with comes with a dirtied corporate history or debt. It is incredibly important to purchase a shelf company with a company that is reputable and has a proven history of selling legitimate shelf companies. 

All of our existing shelf companies are completely safe to buy, with financially clean records and updated filling history. 

Start today

If you’re in need of a ready-made company, which has been established and aged. We can help you. Our shelf companies are regularly updated and we have a variety of names to choose from. Secondly, we can provide you with additional services like a Company Name Change or a Registered Office service to further protect your details.