Off the shelf companies were useful before online company formation agents existed and at one time were the preferred method of setting up a limited company. However since new technology available has changed the way companies can be formed, it is now much less attractive to buy a company “off the shelf”.
An off the shelf company is a limited company which has been previously formed by an agent with different shareholders, directors and secretaries and a different company name. This company is normally dormant and the officers are linked to the formation agent in some way. When you purchase an off the shelf company all of the directors and the secretary will resign and your chosen ones would be appointed. Also the shares would be transferred over to you. You could then change the company name by resolution if you would prefer.
In the past buying a company off the shelf was very useful as all applications made to Companies House would have to be done through the paper route. This meant a long delay if you were looking to start your business as soon as possible. By buying off the shelf, you could almost instantly have everything signed over to you and would not have to work through the paper company formation process.
Since company formation applications can now be made online it is less attractive to buy an off the shelf company as you can form your company through an online company formation agent, usually within the same day. This company would have all of the correct shareholders and directors and the company name that you choose from the beginning meaning that you don’t have to worry about changing them later on. It also means you do not have the risk of taking over a company from people would you do not know. This is not usually an issue, but you should be aware that the previous owners will always be linked to your company on the Company’s House records which can pose a potential risk to your business.
Wisteria Formations can complete an online company formation for you. To complete your company registration begin here: http://www.wisteriaformations.co.uk
