With the multitude of articles written and redistributed lately regarding the so called “Panama Papers” there has been a regurgitated interest in shelf companies vs. shell companies. What exactly are they? What is the difference? Who uses them? And Why?
Both types of entities have their purpose and function in the market place. They are a tool – just like a computer, a car or a pen. They can be used for the benefit of the company, employees, customers and society or they can be used to the detriment. Because of these “Panama Papers” there is currently a misunderstanding and misconception in the public that ALL Shell or Shelf companies are used for tax avoidance or evasion. That anyone who has a Shell or Shelf company is “trying to hid something”. And let’s be honest here, yes, there are a very small percent who have used shell companies for nefarious reasons. Just as a computer, a car or pen can be used the same. But the vast majority are used legally and lawfully for the means and purpose they were created.
What exactly are Shelf Companies & Shell Companies? What are the differences?
A Shell company defined by Wikipedia:
“A shell corporation is a company which serves as a vehicle for business transactions without itself having any significant assets or operations … Shell corporations are not in themselves illegal, and they do have legitimate business purposes.”
A Shelf company defined by Wikipedia:
“A shelf corporation, shelf company, or aged corporation is a company or corporation that has had no activity. It was created and left with no activity – metaphorically put on the “shelf” to “age”. The company can then be sold to a person or group of persons who wish to start a company without going through all the procedures of creating a new one.”
Here at Wyoming Corporate Services, Inc. we do not offer, nor have we ever offered Shell companies, so we are not going to spend additional time discussing them.
We do offer Aged Shelf Companies. Companies that we formed ourselves, placed up on the shelf and have maintained all the State required records and fees. We guarantee in writing that they are all clean and pristine. They do not have EIN#, bank accounts, trade lines, D&B credit scores. They have never been used and this is the reason we can make such a guarantee. Visit our aged shelf companies page to browse a partial list of our current inventory.
Who uses Shelf Companies and why?
- To save the time and effort involved in creating a new company. Let’s say you have a real estate closing or transaction and would like to use a Corporation or LLC and need it right away. In most cases, our shelf companies will come with a PDF copy of all your Articles the same day you order, and you can utilize them that same day. In many cases a bank account can be established for the entity the same day.
• To have the ability to bid on contracts. Some jurisdictions require a company to be in business for a certain length of time in order to bid or qualify for consideration.
• Leasing equipment. Often leasing companies don’t like to lease to companies that are less than six month old.
• Perception in the market place that the company has a longevity. Maybe you have been a sole proprietor for many years and now have decided to incorporate. You don’t want to appear to new or potential customers that you “just started”, but rather have been in business for awhile.
• Privacy. The reality of the world we all now live in is there is very little privacy or the ability to have privacy. We are often lead to believe that anyone seeking privacy must be “trying to hid something” or they are “doing something illegal”. Therefore, if we have “nothing to hide” we should filet and display all of our personal and business dealings for public review, approval and consumption. This is simply not true. There are many legitimate, legal and varied reasons for one wishing to keep ones personal and business dealing out of the prying public eye. Fortunately Wyoming is a State that still believes citizens can and most importantly still have a RIGHT to do so. Wyoming still has the Old West mind set that if you want privacy, you have a right to it.
Please don’t be misled or misinformed by the current furor over the “Panama Papers” and role of shell vs shelf companies. Do your own research – there is a lot of great, informative and accurate information out there.
Please feel free to contact Wyoming Corporate Services, Inc. or us directly if you have any questions on the many Wyoming corporation advantages and why one of our aged shelf companies might benefit you. Why Wyoming? Find out more.
Wyoming Corporate Services, Inc.
1-800-990-0433 ext. 212
1-307-632-3333 ext. 212