Whole Sale Shelf Corporations: Avoid These Common Mistakes
So you’ve decided to take the leap. You want to buy a shelf corporation and give yourself a head start in the field. You want to quickly establish credibility and ensure that you can receive instant approval for loans and credit. Buying a shelf corporation can help take the guess work out of establishing a new business. But keep a few things in mind and avoid these common mistakes. For one, it can be very tempting to jump in and buy a shelf corporation that supposedly has preestablished credit. But don’t be foolish. Don’t pay high price just because a shelf corporation sounds good on paper. Often times, that shelf corporation won’t actually have pre-established credit, leaving you high and dry and with a so-called “white elephant” to deal with. This also goes for any shelf corporation that supposedly has a personal guarantor, or comes with tax returns. If you’re paying high prices for a company that already comes with tax returns, chances are very high that you’re buying a recipe for fraud and even jail time. Also, do your research. It doesn’t pay to buy a business that has poor credit or hidden liabilities. That’s what we call a lemon or a white elephant. You’ve paid high price for a business that’s just going to weigh you down. You’re almost better off just starting off completely fresh if you find yourself eyeballing a complete lemon. Last but not least, make sure that whoever you’re buying the shelf corporation from actually owns the corporation. If not, you may as well be buying land on the moon. You’ll never own the corporation, they never owned the corporation, and it’s a recipe for disaster all around.