Shelf / Ready-madecompany

In plain words

A shelf company (ready-made company) is a legal entity registered in advance and sold as a finished product. The logic is simple: the company already exists, it has a registration number and a date of incorporation, so work can start faster than with registration from scratch.

The problem is that, along with the company, the buyer also acquires its past. Even if the seller assures you that the company is “clean and has not traded”, this must be verified with documents: whether there were any transactions, whether there are reporting or tax arrears, who was listed as director and member, whether the company appeared in disputes or investigations.

In practice the argument of “an earlier registration date” is valued less than it used to be: banks and counterparties look at genuine activity, beneficial owners and transparency, not at the age of the legal entity. That is why in most situations a clean registration for your own purpose is more reliable than saving a few weeks with someone else’s history.

When people consider it

What to check before buying

How to proceed properly

1. 01Compare it with ordinary registration
2. 02Check the company’s history
3. 03Request certificates confirming no arrears
4. 04Complete the deal and change of officers
5. 05Update the information in the registers

What you need to know

• The buyer inherits the company’s history
• A promise that “the company has not traded” must be confirmed with documents
• Overdue reporting from earlier years becomes your problem
• Banks look at activity and beneficial owners, not age
• Changes of directors and members must be registered properly

Common mistakes

• ✕Taking the seller’s word that the company is clean
• ✕Not requesting certificates confirming no arrears
• ✕Saving on legal checks before buying
• ✕Buying a company for the legal entity’s “age”
• ✕Not checking previous directors and members

Read next