Copyright (c) 2009 Marco Carbajo
There has been a growing demand in shelf corporations from many of the investors,small business owners and entrepreneurs that I have the opportunity to speak with on an ongoing basis who are looking for coaching on how to start business credit using a shelf corporation.
By sharing some insight with you on shelf corporations and what are the key business credit advantages will better prepare you in making a more educated decision if this is an option you’re thinking about.
Now, let’s first cover the basics.
What is a shelf corporation?
A “Shelf Corporation, also known as an “Aged Corporation” (or “Aged Company” when referring to an LLC, for example) is a corporation that is already formed, but not in use, and ready for “purchase” by a new owner. There are many reasons that people purchase shelf corporations, and there are certain things to look out for when considering one of these “ready-made” corporations.
Now one of the questions I’m sure you’re thinking is “Why should I buy a Shelf Corporation?”
Shelf corporations allow you to engage into business, credit, or real estate agreements as an established company without having to go through the long waiting period of establishing a brand new corporation.
Most potential creditors or business resources are less likely to extend credit or lend to new or up-start corporations. By approaching them as an established corporation or company, the more likely your business has the opportunity to have access to credit lines, banking relationships, leases, and so on.
For example, during the initial stages of building business credit there are some vendors that will only extend credit to companies that are at least two years in business. In some cases they also require a personal guarantee if the business is less than a year old. By purchasing a shelf corporation that’s three or even ten years old can drastically increase the number of credit opportunities available to you.
Now don’t worry if your existing corporation is less than two years old because you’ll still be able to obtain business credit, but the amount of banks that you can apply at will be limited. If you’re planning on starting a corporation or setting up another corporation then this may be an option to entertain.
Shelf corporations can also offer a large increase in borrowing power as well as enhanced credibility for your business when talking to customers and lenders.
Remember the age of the owners does not necessarily correspond with the age of the company.
When the H.J. Heinz Company advertises that it was established in 1869, it doesn’t mean that all of the shareholders are well over 100 years old. It simply means that the company was filed in that year. You can take advantage of similar credibility benefits when advertising to customers.
The age of your company can give greater credibility to customers and lenders than a business that was recently established. So, purchasing companies with established credit and existing credit lines can give the business a big financial boost.
Here are the Top 5 Advantages of a Shelf Corporation
1. Saving time and expense of forming a brand new corporation
2. Immediate access to contract and government contract bidding. Most states require that your company be in business for a specified minimum length of time.
3. Instant credibility and an appearance of corporate history.
4. More attractive to potential investors and investment capital.
5. Faster and easier access to banking relationships and lines of credit.
As far as purchasing a shelf corporation for the purpose of obtaining a bank loan or line of credit, given the current economic conditions, banks are requiring seeing much more than simply the age of your company. There are bank ratings, credit history, NSF history, and other factors to consider especially if you request more than a $50k line of credit. So if your interest is in applying for bank financing keep in mind shelf corporations have no business history, tax returns, financials and existing revenue.
Another word of caution that you need to consider is there are many businesses that sell shelf corporations that have done business in the past, DO NOT buy these! If a shelf corporation has done business in the past and you purchase it you also assume all past liabilities of that company. So if the company has had any lawsuits brought against the corporation from the past you are now liable because you now own the corporation.
It’s critically important that the shelf corporation you are considering not have any inherent or lingering liabilities. For the most part, this can be assured by looking into the history of the corporation and ensuring that the extent of its business activities was limited or nonexistent except for the application of an Employer Identification Number and maybe the formation of a bank account.
Shelf corporations can be a great option to start business credit if the proper due diligence is taken and there are many aged shelf Nevada corporations, Delaware corporations, Wyoming corporations, offshore corporations and Canadian Corporations that are available but be sure you do your homework.
Watch the video related to start business
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Help answer the question about start business
What would you do to start developping business?This is just a general question.
If you were interested in launching business in Asian countries, done all the marketing research, decided to start business over there, what would you do next?
The main tip that I want to give you is to do lots of research before you begin. A good place to start is the California Business Portal (see below).
Also you need to be informed about federal regulations as well as California.
A good accountant can help you with these issues and can also get your books setup for success financially and when tax time comes.
Associations may be a good avenue to explore. These organizations will address many of the thoughts, questions and concerns you'll inevitably have as well as many you haven't anticipated yet. See the source box for some relevant links.
Research, research, research – this cannot be stressed enough. Read as much as you can about the industry. Here are some book titles that are relevant:
* Start Your Own Clothing Store (Entrepreneur Magazine's Start Up) by Entrepreneur Press
* Start and Run a Profitable Retail Business by Jim Dion, Ted Topping
* Retail Business Kit for Dummies by Rick Segel
* Specialty Shop Retailing: How to Run Your Own Store Revised by Carol L. Schroeder
* So You Want To Own The Store: Secrets to Running a Successful Retail Operation by Mort Brown
There are plenty of free informational resources out there. Check the source box for links to articles.
Hope that helps! I wish you much success & happiness in all your ventures!
@RafaKBLudo Shut up you fool. Your counter argument, “well, if you can do better then go do it” is the standard reply of an ignorant moron.
@hydrolist1 The interviwer is a person.
I’ve seen interviwers who were more comfortable doing their job – this comes with time. But the question is:
Would you have done better? If so, go, interview Tim and post your video so we can watch. We love great interviews.
Most places require a business license from a sole proprietor. Once you are handed your license, you can start.
YES! GO ON DO IT.
So, here are the steps to starting a Clickbank business:
1. Sign up for free at Clickbank.com
2. Choose a username
3. Choose which products you want to promote, there are over 10,000
4. Market your affiliate links on the Internet
This is a simple outline of what you need to do. Number 4 is the most difficult because it deals with getting traffic. To get traffic you can do a number of things like pay per click, posting in forums, and writing press releases and articles.
I highly suggest that you educate yourself on internet marketing and you will discover how easy it is to drive traffic to your affiliate links and make money. There are hundreds of ways to do this and you can find information all over the Internet but you just have to decide what works and what does not.
see:
http://worldsfinance.com/?aid=55174&q=start+developping+business
good luck
I was going to say Zubair Importing, but the name alone
"Zubair" would be good for North America, and generic enough to expand into other fields.
It may be a more common name where you are though, and not so distinctive
@qwertywoods w
Unfortunately, about 80% of business start-ups fail within two years, and for all kinds of reasons:
1. If you have a SUCCESSFUL family business, let's assume you have some business experience. Then, let's also assume your business plan and marketing plan make sense, you have sufficient start-up capital, you have the vision and energy business ownership requires, and you have a fighting chance.
2, 3 & 4: The key to starting and growing a successful business is:
a) Be sure that there is a market for your product or service
b) Do proper research, check out the competition, do a proper business and marketing plan, try to determine how much financing you'll need for the first two years, and then double it; try
to determine what your sales will be for the first year or 18 months, and then figure it will take twice as long.
I own a business and fwew things are more exhilarating as being totally responsible for your own destiny. But also expect lots of sleepless nights, lots of worries, lots of wondering how to make payroll and how to pay suppliers. But it's all worth it!
@aq1w2e3r4 yeh i like that your offering your services, may i be able to get a website done please? im only 18 and trying to get a business on the up go with a partner and need all the support possible
starting a ebay business is the quickest way to start.
dropship-products.blogspot(dot)com
Yes, you can start whenever you like. When you do your taxes at the end of the year, you will fill out a schedule C income and expenses unless you are starting a bigger business. In this case, you will be paying taxes quarterly. Be sure to get with an accountant and tax advisor if it is a bigger business. Good luck in your venture.
“When two people meet, there are really six people present. There is each man as he sees himself, each man as he wants to be seen, and each man as he really is.”
Thanks for providing us much valuable content. Please sub back. I appreciate the love,
Justin
@aq1w2e3r4 inbox my youtube channel
some good advice. If anyone needs to get their business online, I’m making free websites and give a lot of marketing advice. for more info go to pg-marketing, net
Really enjoyed the video.
Do it…. If it makes you happy. I guess that is what you are asking.