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Purchase of ready-made companies
Purchasing ready-made companies is becoming increasingly popular among entrepreneurs seeking to enter the market or expand their presence quickly. This approach allows one to avoid many complexities associated with starting a business from scratch: company registration, obtaining licenses, building a client base, and hiring staff. Ready-made companies often already have established business processes, a reputation, and a stable position in their industry, which significantly reduces the time needed to launch a project.
Table of contents
What is a ready-made company?
A shelf company is a legal entity that has been registered in advance. It is ready for sale and can be acquired to commence business operations.
Among ready-made companies, «shelf companies» can be distinguished. These are characterized by the absence of any prior activity. In other words, it is a set of incorporation documents for a legal entity that is kept «on the shelf» until there is a need to use it (hence the term «shelf company»). Such companies do not possess assets or liabilities and are most commonly found in offshore jurisdictions.
The primary purpose of acquiring a ready-made company; is to quickly start operations or obtain a company with an operational history (in the case of shelf companies — a history of registration). Buying a ready-made company allows entrepreneurs to begin working immediately, bypassing the stages of registration.
Advantages of purchasing a ready-made company
Purchasing a ready-made or shelf offshore company offers several significant advantages that make this process attractive to entrepreneurs and investors.
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Rapid incorporation process
One of the key benefits of ready-made and shelf offshore companies is the speed of starting business operations. Unlike traditional incorporation, which may take several weeks, the purchase of a shelf company allows you to skip this stage and start operating immediately. The company is already registered, has all the necessary documents, and is ready for use almost instantly. -
Established Operational History
A ready-made company may already have a history of operations and cooperation with banks. This can simplify the process of opening a bank account and may help in obtaining certain licenses and permits. In the case of a shelf company, the mere fact that the entity has been registered for some time can offer similar advantages. -
The adaptability of the company to different conditions
After purchasing a shelf offshore company or a ready-made company, the client is often able to modify key aspects such as the company name, registered address, and corporate structure. This allows the company to be tailored to the client’s specific needs and preferences while preserving its status and legal integrity. -
Prestige and Credibility
Owning a company that was registered some time ago can increase credibility in the eyes of partners and clients—especially when the company is incorporated in a reputable and well-known jurisdiction. By skipping the process of starting a business from scratch, you are better positioned to engage with organizations that typically do not work with new market entrants.
Key considerations when purchasing a ready-made company
After purchasing a shelf offshore company or a ready-made company, the client is often able to modify key aspects such as the company name, registered address, and corporate structure. This allows the company to be tailored to the client’s specific needs and preferences while preserving its status and legal integrity.
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Cost of a ready-made company. A ready-made company is typically more expensive than a newly registered entity. The cost reflects not only the initial incorporation but also ongoing annual maintenance expenses—such as the registered agent, registered office, nominee director services, and other recurring costs. The older the company, the higher its value.
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Need for Post-Acquisition Modifications. Although shelf companies are already incorporated, they often require significant changes after purchase. These may include restructuring the company, changing the registered office address, and amending the company’s constitutional documents to align with specific business needs.
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Risks Related to Legal Cleanliness. There are potential risks related to outstanding liabilities. However, many providers offer documentation confirming the absence of debts or obligations. If you plan to work with major international partners or engage in complex financial transactions, it is highly recommended to verify the company’s legal standing in advance to avoid potential complications.
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Banking services for ready-made companies. Opening a bank account for a shelf company may involve additional procedures, such as providing detailed information about the ultimate beneficial owners or proof of the registered address. It is also important to note that if the beneficial ownership changes, the bank’s compliance process may start from scratch, similar to a new company setup.
Purchasing a ready-made or shelf company can be an efficient and quick solution for starting a business, but it requires a thoughtful approach and consideration of potential risks. To mitigate possible disadvantages, it is recommended to carefully study the legal and tax features of the chosen jurisdiction and seek professional advice to select the best jurisdiction and structure for company registration, as well as conduct due diligence.
F.A.Q.
Why choose to buy a ready-made company instead of creating a new one from scratch?
A ready-made company already has a legal history, registration, the possibility of a quick start, and a market reputation. Creating a new company requires more time and effort, especially when it comes to obtaining the necessary permits and documents. A ready-made company saves time and allows you to start working quickly.
What is the difference between a shelf company and a ready-made company?
A ready-made company is a company with a history of operations, while a shelf company is specifically registered for sale and has never conducted any business. Shelf companies are primarily used in offshore jurisdictions.
Purchasing a ready-made company involves somewhat higher risks, but opening an account for such a company is much easier. Acquiring a shelf company almost carries no risks.
Can I purchase a ready-made company remotely?
It depends on the jurisdiction, but in the vast majority of countries, this is possible. Modern technologies allow the sale and purchase transaction to take place remotely. The process can be completed via a notary, electronic signature, and remote communications between the parties. The key condition for a successful transaction is trust in intermediaries and consulting with lawyers. The specifics of the procedure depend on the jurisdiction where the company is located.
How long does the purchase of a ready-made company take?
The average duration of the transaction in certain jurisdictions is 5-10 working days. Much depends on the complexity of legal formalities, the availability of documentation, and the speed of agreement on the terms of the transaction. Sometimes the process may take longer if the company is large or has a complex ownership structure.
How to choose the right company for purchase?
It is important to define the selection criteria:
- Location and region of activity;
- Type of economic activity and the legislative requirements for conducting that activity;
- Availability of assets and liabilities in the company;
- Tax rates in the country of company registration.
It is best to start the process by exploring several options and evaluating each according to the mentioned criteria.
