What is a Shelf Corporation (also known as Stale Corporation) and Why Would I Need One?
A Shelf Corporation is a corporate entity established by a company whose sole purpose is to create/collect corporations that have been in existence longer than 2 years then sell those entities to people needing to show a track record of business ownership. A company may register 100 corporations, then sit on those corporations for 2 or 3 years, at which time they will transfer ownership of (sell) the corporation to the new owner (you) for purposes of obtaining a business line of credit or for some other business related purpose. The purchaser of a Shelf Corporation is able to establish immediate business credibility. Granting a business line of credit to an ongoing corporation legitimizes the practice of extending these lines. Most borrowers are required to obtain a stale corporation as part of the business line borrowing process. The majority of lenders require a corporate entity with at least 2 years of clean credit history. Shelf Corporations will oftentimes meet these lender requir
Related Questions
- Can an S corporation take credit against its excise tax for the Tennessee individual income tax, also known as the Hall income tax, paid by its shareholders on distributions from the S corporation?
- What is a Shelf Corporation (also known as Stale Corporation) and Why Would I Need One?
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