Search

SHELF CORPORATIONS

Updated: Jan 26


By definition, shelf corporations are companies or corporations that are created and left with no activity – literally put on the “shelf” to age – and then sold to a person or group of persons who want to start a company without going through all the usual procedures and processes. These companies are typically viewed as having no need of credit and are shunned by lenders.

Is using a shelf corporation putting you on track for a personal and professional train-wreck?

In most cases, D&B is quick to identify shelf corporations for exactly what they are — a “flash-in-the-pan” strategy to achieve credit and then dodge the responsibilities that accompany the debt. Their 180+ year history of credit management has proven time and again that these types of strategies will typically leave lenders and creditors holding the bag for the funds they have provided. It is for this reason that D&B is quick to research companies they believe are shelf corporations, downgrade their credit potential, and pull the switch in the rail yard before the lenders get taken for a disastrous ride.

There are a vast array of specialized businesses who promote their services in the shelf corporation field. They create fictitious corporations, put them on the shelf to age, and then wait for a buyer to come along who has a need for the business. Fortunately for them, their client base is exploding due to credit coaching companies who suggest their clients take this route to achieve credit success.