Shelf Corporation is a company that was established earlier but was not involved in any kind of business. A shelf business has no liabilities or assets associated with it. Simply put the term “old” means an already-built shelf company for sale in South Africa or elsewhere, just waiting to be bought by a buyer to establish a new business. Shelf Company aims to get old over a specific amount of time so that it could provide immediate time service for the company’s owner.
Here are some advantages of purchasing a shelf company.
Finding New Suppliers and Contracts
An old business is recognized by Companies House. It conveys the impression of longevity to your business.
When you first start your company, it is usually difficult to get contracts. However, purchasing an existing company before starting your business can allow you to get instant credibility from suppliers as it helps to create a more professional image.
Facilitates Approval of Business Banking
A smoothly running business is as crucial as forming a company. Therefore, banking for business is a crucial aspect of managing the business. You must create a business bank account to create a professional appearance. It is much easier to contact any bank for credit cards or a business account with a shelf company. This is because banks tend to be more likely to choose the oldest business to invest in.
Enhances the Confidence of the Client
The primary aspect of any business is to boost the confidence of the clients since trust and confidence are crucial to the overall success of the business. Studies have shown that having an organization that is on the shelf can dramatically increase the confidence of clients in the company because shelves give the impression of longevity.
You Save Your Time
Shelf companies could help you save time as you don’t need to establish a company from the beginning. When you begin a new company, time is one of the most important factors that determine the success of your venture. The purchase of a shelf business will significantly cut down on time since the business is registered. Therefore, you can begin your company from the moment you purchase the old business.
Bidding for Government Contracts
Numerous government contracts require a particular duration of time for companies to submit bids. Purchasing a shelf company for sale in South Africa can provide your business with the time needed to run a business. Thus, an old company will allow you to bid for government contracts in a short time.
Do You Have the Ability to Purchase More Than One Shelf Company?
You can buy the number of shelf companies you want. However, it is best to achieve good results by having one person who is the president.
The logic behind this is that there are a limited number of lenders in any particular metropolitan area, and each lender will rarely lend to more than one business-and-president combination, so if you have 2 companies and go to the same lender asking for financing for both, chances are the lender will either approve one and deny the other, or approve both but split the credit limit 50/50 among them.
Thus, if each company has a distinct president or president with a different name, you might have problems finding reliable lenders.