Shelf Corp

[vision]

Hi,

 

We are considering buying a Shelf Corp for our 2nd Biz. There were conflicitng suggestions on the searches.

 

I understand 2years or more would be a better option.

 

1) Do I want to buy one that already has a DNB and/or Experian file or not?

 

2) Is it OK to buy one in the state of CA with the biz operating in AZ if I have a registered agent in CA? (I have a friend that may sell)

 

3) If we do not get one with a DNB or Experian file and want to establish biz credit for operating expenses, how long should we expect to be qualifying for cards such as HDMC, Citi and Key Bank? (when I found CB w/our 1st biz we already had 2yrs Inc and 1yr DNB so I'm not sure)

 

4) DH and his father will be the officers. We were considering an S or C Corp since the main purpose would be for tax benefits (other than biz credit) Would we be able to change names to both of them or will it be either one or the other?

 

5) I've checked out the websites posted on CB where I can purchase but prices are pretty steep. Anyone has any suggestions where I can purchase for less than $1000/yr?

 

 

Thank you!

[cats1]

I would like to know about this, I'm buying a 2 year old shelf corp also, I've ran as sole prop since 2003.stated building my Ein and duns number a couple of months ago.Can I use both stil after I INC.

[DonDeal]

If you aren't trying to get Line of Credits through Banks then inc your business from scratch.

 

These store cards did not take my corporate charter into consideration with my shelf corp. Anyways 2mo old businesses were building credit faster than I was and believe I waited for 4 on dnb and 5 on experian before I even started for anything major or decent.

 

They don't check the SOS website majority of the time. For instance my corp was inc'ed on sep 22 04 and the dnb was created aug 24 06. they only saw the aug 24 06 date. The only date that references my 04 date was my secratary of state. Nobody checked it I bet. I built some great credit but it took CLI's.. I didn't get great lines off the bat.

Edited March 22, 2007 by DonDeal

[losartworks]

In terms of the credit file itself it will be a gamble as to if the corp age will benefit. Often times Duns will restart the file age when a business changes ownership (in fact it will All the time if they are clearly made aware of it). Experian tends to also generate new files as well, but it can sometimes be fixed.

 

Corporate age is a great thing if you can get it economically. If your state allows for the reactivation of recently expired charters you might want to consider that option. last year I bought a 42 year old corp that had expired a couple years before that. I bought the entity from the owner who had retired and paid reactivation fees and had an active corporation with 42+ years of age for under $500. But again you need to ensure your state allows reactivation, then you would buy the rights to the entity prior to reactivation.

 

In terms of buying a shelf corp through the traditional method, it's a risk because even if it comes with a seasoned Duns or Experian file, the file may turn as fresh as if you had just started your corp that day if they note new ownership. Sometimes they restart your file age when even a new manager is listed.

As more creditors than not make decisions based on FILE AGE, it's not a promise of success by buying a shelf if Duns is going to start your file date over. Some lenders do dig deeper and can see your corp age through SOS checks and such. But they may also wonder why your credit file is fresh and not of comparable age. A potential red flag. Sometimes you can luck out. Duns thus far has made by 2nd business the exception rather than the rule by carrying over the file age. Experian started me a new file. So if I apply for credit and they pull Duns I am in great shape, not so much with Experian.

 

File age and what it has potential of being with a costly shelf corp purchase should be a big consideration.

[Jimmy Page]

It's amusing to see posters who use the words "slimeballs", "scum" and such for corporate credt reporting agencies like Duns. The same posters abuse corporate shelf or retired corporations purchasing them to end run (cheat) the credit system. They admit freely to this.

 

At some point, anyone who buys a company will have to answer the question as to how long has the company been in business or managed by you. Sure, you can play fraudulent games and say "THE company has been in business for 40 years" knowing that the inference is that you have run that company for 40 years.

 

If you answer how long have you managed the Company, then the history is potentially moot. You are a startup for credit purchases.

 

Beware of those who preach integrity from one side of mouth and practice none of it from all sides of mouth.

[DonDeal]

It's amusing to see posters who use the words "slimeballs", "scum" and such for corporate credt reporting agencies like Duns. The same posters abuse corporate shelf or retired corporations purchasing them to end run (cheat) the credit system. They admit freely to this.

 

At some point, anyone who buys a company will have to answer the question as to how long has the company been in business or managed by you. Sure, you can play fraudulent games and say "THE company has been in business for 40 years" knowing that the inference is that you have run that company for 40 years.

 

If you answer how long have you managed the Company, then the history is potentially moot. You are a startup for credit purchases.

 

Beware of those who preach integrity from one side of mouth and practice none of it from all sides of mouth.

 

 

hmmm .... what are you blabbering about? ....

 

 

So we're all frauds now Jimmy because we bought shelf corps?

Edited March 23, 2007 by DonDeal

[orangecrush]

"THE company has been in business for 40 years" knowing that the inference is that you have run that company for 40 years.

 

That's Geronimo . Ford Motor Company was founded in 1903. If the CEO of Ford says: "The company has been in business for almost 105 years". Do you really think anyone will infer he has run the company for 104+ years or think he is committing fraud by saying that ????

 

I don't think anyone wants to give Ford credit right now, regardless of how long they have been around.

 

Shelf corporations are not illegal or fraudulent.

 

 

If a lender wants to know how long the applicant has run a company, they can ask on the application or on the phone. If the applicant lies, then they are commiting fraud, otherwise they are fine.

[TeeSharice]

It's amusing to see posters who use the words "slimeballs", "scum" and such for corporate credt reporting agencies like Duns. The same posters abuse corporate shelf or retired corporations purchasing them to end run (cheat) the credit system. They admit freely to this.

 

At some point, anyone who buys a company will have to answer the question as to how long has the company been in business or managed by you. Sure, you can play fraudulent games and say "THE company has been in business for 40 years" knowing that the inference is that you have run that company for 40 years.

 

If you answer how long have you managed the Company, then the history is potentially moot. You are a startup for credit purchases.

 

Beware of those who preach integrity from one side of mouth and practice none of it from all sides of mouth.

 

 

 

leopard?

[orangecrush]

leopard?

 

 

Donkey???

[TeeSharice]

 

leopard?

 

 

Donkey???

 

a lot in common... an flowers cant change his ways and a leopard cant change his spots.... perhaps this is a cross-breed

[orangecrush]

[TysMom02]

a lot in common... an flowers cant change his ways and a leopard cant change his spots.... perhaps this is a cross-breed

 

uh-huh

[Credit Please]

It's amusing to see posters who use the words "slimeballs", "scum" and such for corporate credt reporting agencies like Duns. The same posters abuse corporate shelf or retired corporations purchasing them to end run (cheat) the credit system. They admit freely to this.

 

At some point, anyone who buys a company will have to answer the question as to how long has the company been in business or managed by you. Sure, you can play fraudulent games and say "THE company has been in business for 40 years" knowing that the inference is that you have run that company for 40 years.

 

If you answer how long have you managed the Company, then the history is potentially moot. You are a startup for credit purchases.

 

Beware of those who preach integrity from one side of mouth and practice none of it from all sides of mouth.

 

 

 

[cahant]

The key to preserving the age of a "seasoned" D&B file is to transition the file rather than create a mangement change. Keep the original officer/officers intact and simply include YOU, the additional principle as a VP or CFO. If you are reviving and/or purchasing an exisitng corp in default or suspended status, keep the officers list the same, again, with the addition of yourself. Continuity is key here. Once you have established a paydex and/or rating, simply remove the principle from the D&B file and advance yourself to the presidents position. I have had 100% success rate with this method.

 

 

To get the file out of DS or NQ status without having a thorough investigation, setup a D&B pull account from another company in which you may own or have control of and request a standard investigation on the company you are trying to establish. When D&B(India) calls simply take a name and number and DO NOT call them back or answer ANY questions. The information you put in the request for investigation will be the information populated into the file (including phone#). The file will become active and allow you to request an e-update password to make necessary changes and will allow you to establish a rating. The investigation is the cost of a BIR report ($40) and is much cheaper than paying D&B to make your file active and keeps you out of the "I am a company trying to establish credit" status since another company intiiated the investigation.

 

 

This may be a bit advanced for some to comprehend...

[DonDeal]

The key to preserving the age of a "seasoned" D&B file is to transition the file rather than create a mangement change. Keep the original officer/officers intact and simply include YOU, the additional principle as a VP or CFO. If you are reviving and/or purchasing an exisitng corp in default or suspended status, keep the officers list the same, again, with the addition of yourself. Continuity is key here. Once you have established a paydex and/or rating, simply remove the principle from the D&B file and advance yourself to the presidents position. I have had 100% success rate with this method.

 

 

To get the file out of DS or NQ status without having a thorough investigation, setup a D&B pull account from another company in which you may own or have control of and request a standard investigation on the company you are trying to establish. When D&B(India) calls simply take a name and number and DO NOT call them back or answer ANY questions. The information you put in the request for investigation will be the information populated into the file (including phone#). The file will become active and allow you to request an e-update password to make necessary changes and will allow you to establish a rating. The investigation is the cost of a BIR report ($40) and is much cheaper than paying D&B to make your file active and keeps you out of the "I am a company trying to establish credit" status since another company intiiated the investigation.

 

 

This may be a bit advanced for some to comprehend...

 

The thing is... when you buy a shelf corp the original owner/ceo does not want anything to do with it anymore for liability reasons(Understandable). I had to sign a couple director/ceo changeover resolutions to legally and formally get him off...I bought mine from a company that knows there stuff so majority of the paperwork was already filled out.

 

I wouldn't want my name on anything either after I've given a corp up.

[losartworks]

No doubt Don. In my opinion it would be at most outright illegal, and at the least unethical to retain the officer/director/owner who no longer had any legal ownership or connection to the company. Yes, the continuity would be retained and the file age likely stay the same. But at what moral cost??

[cahant]

Whoa!

 

>>In my opinion it would be at most outright illegal, and at the least unethical to retain the officer/director/owner who no longer had any legal ownership or connection to the company.<<

 

 

First of all, as a general rule, a corporate director or officer is not liable for loss or damage to the corporation other than what was proximately caused by his own acts or omissions in breach of his duty.

 

In fact, what defines a connection to the company? A contract, a desk, a monetary investment? Using this logic, one could only assume that purchasing an aged corporation where you had no prior "connection" to the company would be unethical? I guess you agree with Jimmy Page on this one!

 

Nominee officers provide this purpose for many companies formed and exisiting in Nevada and other states, is this outright illiegal? Technically, the only participation/ownership or connection they have with a company utilizing this clause is a contract. Is this illegal? The same can and does apply for a properly executed written agreement between the seller and purschaser of an existing corporation allowing for specified limited participation including indemnity. All of the existing entities I have purchased include indemnity contracts for the existing owners outlining the specified actions and limited participation to take place.

 

 

 

Conventional knowledge would only lead you to believe that Aged Corporations are illegal, however, using creativity within the SCOPE of the law can and will yeild positive results.

 

Not trying to start a huge debate here, but my point is that anything can be accomplished legally and ethically if proper procedures and legal preperations are incorporated into the project.

Edited March 23, 2007 by cahant

[losartworks]

Well, we can convolute and rationalize it all we want, but common sense tells me I don't want the guy down the street's name on my credit report or attached to the corporation I bought from them.

 

Sure it would help in terms of the credit file to leave well enough alone in terms of the name on the file. But would it be right? I don't believe it would. If there's a legal loophole somewhere in there or it's just a large scope of rationalizing, I just wouldn't want the other guy's name attached to My company. And I doubt he'd want to be attached to it after he sold it.

 

Bottom line, legal or not, I wouldn't want someone else's name who was no longer affiliated with the company to be on it's file. Suppose he's someone who ends up having collectors or other undesirables after him. I don't want anyone showing up on my doorstep looking for this guy, or thinking I am them! To each their own, but I wouldn't do it just to further my credit file.

[losartworks]

Last time I checked, if one wants to advertise here they need to consult with the site owner to get rates.

[breeze]

Why newbs can't PM: What you see in this thread illustrates two of those reasons.

 

To the OP, a shelf corp will not give you immediate huge credit lines. Anyone telling you it will is probably trying to sell you one. There is no substitute for the basic credit file you build with smaller accounts first. I bought a shelf corp early on, when we first started this section of CB - fortunately I got a good deal - but if I had it to do over, knowing what I know now, I would use that money for something else.

[losartworks]

Theres a Lot of truth in that. an aged Credit File will buy you bigger lines off the bat, even if you just have one or two dinky trades showing. If they have been showing for 20 years then the age of the FILE will buy you the heavy line. Having an aged corp in and of itself is not any promise of big lines to start. I personally wouldn't every buy a shelf corp. They are too expensive for the risk of likely ending up with a new credit file when owner info changes. I reactivated an inactive corp. the previous owner saw no value to it and sold it to me for a song. I very much lucked out when despite giving them my name and new info and totally having all old owners and addresses removed, Duns still retained the file's 43 years of age. And I'm not holding my breath that it stays that way. 99% of the time, new owner/director or manager gives Duns reason to restart file age and then your no better off than a business that starts from scratch. You will benefit in certain circumstances like a LOC or car or real estate where underwriters tend to check the corp age.

Some people lay out $10,000+++ for shelf corps and thats a lot of money given your credit file will likely refresh.

Its a good thing if you can do it at a good price. But so many of these shysters come along with not so clever ideas about shelf corps and creative ways to get around the credit file age starting over. I am not dissing buying a shelf corp. Just select brokers and credit 'consultants' who want to take advantage of those just getting their feet wet.

[breeze]

One thing some people do is look on the secretary of state's site in the state you want to use to incorporate. Find some inactive corps and check them out. Then see if you can find the owners - offer them a couple of hudred dollars for the corp. Do not run your mouth about business credit and what you're doing - make up a bland reason for wanting it - you like the name, tried to use it and found out someone else had it and wasn't using it...

 

If y'all brag too much about what you know and what you're doing, you will tip them off and they'll jack up the price. Be nonchalant, not too interested, just a little.

 

Happy hunting.

[vision]

Wow! I don't follow up on my threads for one day and voila! DRAMA.

 

I really appreciate all the constructive responses however. Before you guys' responses I read a post from Los about reactiviating an expired Charter in my State which is pretty much Breeze's last suggestion I am researching that and if it is allowed in my state, it would be the route we'll take. If not, we'll start from scratch. We've built a pretty strong file with Biz #1 based on you guys' help here on CB. So we just will have to be a little patient on #2. Thanks again!

 

If the State allows it and they accept the filing and transfers then it seems pretty legal to me.

I am yet to fill out an application asking how long I've managed my business!?

 

Thank you guys!

[TysMom02]

Hhhhm, looks like the kitty and the a$$ done ran the sheep in drag out of the barn, hehe.

 

So sorry, couldn't help myself, putting myself in time out now.

Edited March 24, 2007 by TysMom02

[losartworks]

Wow! I don't follow up on my threads for one day and voila! DRAMA.

 

I really appreciate all the constructive responses however. Before you guys' responses I read a post from Los about reactiviating an expired Charter in my State which is pretty much Breeze's last suggestion I am researching that and if it is allowed in my state, it would be the route we'll take. If not, we'll start from scratch. We've built a pretty strong file with Biz #1 based on you guys' help here on CB. So we just will have to be a little patient on #2. Thanks again!

 

If the State allows it and they accept the filing and transfers then it seems pretty legal to me.

I am yet to fill out an application asking how long I've managed my business!?

 

Thank you guys!

 

It really is the best method for obtaining an aged corp in my opinion. I wouldn't have bothered had I not done it that way.

And by all means the advise is correct when told Not to mention building credit or anything else that would indicate the entity had some hidden beneficial value. The guy I bought my corp from couldn't have cared less as he had retired and wasn't concerned why I wanted it. For the record I said I wanted it because the business name was the one I was considering and if I bought it there would be less potential confusion. after paying him and the fees I was the proud owner of a 43 year old corp for well under $500.