Shelf bodies or shelf corporations are typically corporations that have been left on the “Shelf” to age. Typically, individuals buy dormant corporations to
1. Have access to credit that they would not have access to with brand new corporations.
2. Have the ability to apply for a government contract. Some contracts require companies to be two years old or older.
When searching for old corporations, you will notice that there are law firms that sell dormant corporations as well as dormant corporation providers. Many of the shelving sellers who claim to sell shelving and build business credit with it are scammers. In 2010, it is impossible to get $150K in unsecured credit with a corporation. So if you see something like this being advertised, you should know that it is a scam.
You’ll usually be able to get 20K-50K (50K is a bit of a stretch) no PG cash trade credit with a corporation, so if you’re looking for more than this, you’ll need to get more from that corporation. These lines of credit can be obtained in as little as 2 weeks if done correctly. Because of the narrow range of business credit that comes with corporations, you may want to take a hard look at how much you’re paying for a corporation. I suggest you pay no more than $4000 for a shelf corporation with an established credit history and no more than $3000 for one with no paydex.
What you need to know about shelf corporations is that most shelf corporation providers do not sell actual shelf corporations. They acquire corporations that are now out of business, reincorporate them, and sell them. Thing is, these bodies cost the reseller $150-$300 and resell for $2000+. It will be difficult for me to explain everything in this article, but I will cover as much as I can in the little space I have.
Basically, you need to go to the website of the Secretary of State of the state you are interested in and search for corporations that have to pay their state fees. You then check the credit of the corporation you would like to acquire to make sure there is good credit or not bad credit (depending on whether you simply want a dormant corporation with a good paydex score or a clean corporation). Once you have identified the corporation you want, you will want to contact the previous owner of the corporations and ask them to agree to transfer the corporation to you.
This process is simple but there are two parts of the process that are a bit tricky. First of all, checking credit at an affordable price is challenging. You pay DnB $100+ for a full DnB credit file from the specific corporation. The other tricky part of the process is getting the owner to transfer the business to you. I have covered both topics in two of my e-books. My blog also has a lot of free and valuable information on how to build business credit from scratch.
In conclusion, buying a dormant corporation is something that can be very beneficial in building business credit quickly. Just be very careful who you buy it from and consider how much you pay for it.
