An off-the-shelf corporation is a fully incorporated but inactive business, created for future projects or to appear more attractive to investors. It can also be sold to someone who wants to start producing products. There is debate on whether it is still beneficial due to faster incorporation procedures.
Also known as an aging corporation or off-the-shelf corporation, a off-the-shelf corporation is a fully incorporated but not currently active business. The name for this type of business situation comes from the idiom of being on the shelf. That is, someone went to the trouble of creating the business, setting it up from a legal point of view, but never chose to actually do anything with the business.
There are several reasons why an entrepreneur might choose to create a top shelf company. One has to do with the idea of building the business in anticipation of an upcoming project that is not yet ready for launch. Instead of waiting until later, the entrepreneur goes through the legal processes of creating the corporation and allows it to remain dormant until the time is right to start the project. The benefit here is that you can act quickly when the time is right, without having to get bogged down in the bureaucracy that sometimes slows down the process of legally setting up a business.
Another reason for creating an off-the-shelf corporation has to do with appearing more attractive to potential investors. Even if the company has not been activated, the fact that the entrepreneur has taken the serious steps of creating the corporation sends the message that he or she is serious about the business venture. Investors who are a little hesitant to get involved when there is no legal legal structure of the company may be more open to investing in something that has an established base but needs funding to move to the next logical step of actually producing a good or service .
Sometimes, the entrepreneur can create a shelf company for reasons other than the activation of a business. With this app, the original business owner creates a business model, takes all the necessary steps to incorporate the business, and then sells the off-the-shelf business to someone who really wants to make use of the business to start producing products. The creator of the corporation receives compensation for his efforts in handling all the legal activity required to create the business, while new owners have the benefit of not having to deal with these processes and can quickly move on to manufacturing and selling their products. .
There is some difference of opinion on whether an off-the-shelf business is really a good idea. Proponents see this as a productive way to prepare for future business activities now rather than waiting later and possibly missing out on opportunities created by delay. Detractors sometimes cite that times have changed and the laws and procedures for incorporation in many countries today allow companies to be incorporated in a fraction of the time required in the past. For this reason, the effort to create a shelf company early may not provide the benefits that the action once did.
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