A shelf company is a preregistered company that owns no assets or liabilities and has never conducted business. It is registered with the sole purpose of being sold.
Some reasons for looking at shelf companies are:
- Gaining opportunities to bid on contracts in jurisdictions that require the company to have been operational for a certain length of time.
- The ability to select companies with older age profiles to boost investor or consumer confidence.
- Access to investment capital.
- Easier access to corporate credit
- To kick-start trading investments even though one is not the director.