A shelf corporation, also called an aged corporation, is a corporation that has had no activity. It was created and put on the "shelf" to age. The corporation can then be sold to someone who would prefer to have an aged corporation rather than a new one. It is a business entity that has been created through a process other than incorporation (such as a limited liability company) and is simply called a shelf company.

There are several benefits associated with buying shelf corporations, one of which is potential buyers now have a company where they can have anonymous standing—your name does not exist with the company.

Common reasons for buying a shelf corporation include:

   ■  Saving the time involved in taking the steps to create a new corporation.

   ■  Gaining the opportunity to bid on contracts.

   ■  Creating an appearance of corporate longevity.

   ■  Access to investment capital.

   ■  Easier access to corporate credit.

However, these reasons are open to criticism. Many years ago, it would take months to properly incorporate a business. But, now it is quite easy to do so, at least in Australia, the United States, Canada and Western Europe. In fact, it can now be done in as little as a couple of hours. Most companies who sell shelf corporations can make the exchange in as little a two hours. You can even change the name of the corporation as quickly as it takes to change the title without any undesirable side effects.

One important point to be aware of regarding shelf corporations is that a corporation might end up "on the shelf" precisely because of a bad business history. Therefore, it is questionable whether a shelf corporation improves access to capital, since creditors and investors look into a company's history as part of due diligence. Nevertheless, many have been able to immediately use the company’s inherent lines of credit. A number of companies and organizations "produce" and sell shelf corporations, promoting the fact that the new buyer can at the same time have a corporation with a long history, and yet have complete control over the establishment of the corporation's board of directors and shareholder profile. The cost for shelf corporations varies with how old they are. Corporations with as little as six months of history can sell for under a thousand dollars, where corporations close to a hundred years of history can sell for hundreds of thousands of dollars.