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  • FAQ of Purchasing a Shelf Company
  • Author Date Time:2010-03-30 03:02:12
  • [Q] What is a shelf company?
    [A] The incorporation of a company can take time, however some people may need to incorporate a company quickly in order to  enter into a contract or take on some other business. As a professional consulting service to institutions, therefore, we are able to provide a number of pre-registered companies which are available to purchase. These companies are known as shell companies, or "ready-made" companies. Shell companies usually have the following characteristics:
    1. Directors have never been appointed;
    2. The company seal, accounts and other documents required by law are already available;
    3. Business has not actually started.
    Therefore, buyers only need to provide the required documents and they can immediately start to use the company and do not need to worry about any hidden risks.

     

    [Q] Is it risky to buy a shelf company?
    [A] The use of shell companies in most countries, such as Hong Kong, Singapore, the United Kingdom, the United States and the Cayman Islands and other places, is extremely common and in most cases there are no risks. Typically ready-made before being sold, the company will not have appointed any the directors so there is no power to run the company and therefore no potential risk.
    Moreover, when customers buy a shell company the advisory service will issue a guarantee to prove that the company's stock transfer has not been subject to any activity. Counselling services are also guaranteed for the transfer of all matters before the date on which responsibility starts to apply. Therefore, customers need not worry about any potential liability.

     

    [Q] Could a shell company have any hidden debts or commercial disputes ?
    [A] No. In the case of all companies being sold, we will provide letters issued by the current shareholders that the company has never commenced operation, there have been no purchases of any assets, there are no debts, and promised to bear all risk of the companies before the date.

     

    [Q] When can I start to use such a newly purchased shelf company?
    [A] Once you receive our confirmation notice you will also be able to use the company, and we usually receive the requested documents and payments one day after issuing a confirmation notice. Although the company may still require some documents, you can still sign contracts and use the company's name to discuss potential business.

     

    [Q] Once purchased, what documents and items will I receive?
    [A] Whether you are buying an existing or a new company, you will receive a set of documents comprising "company information", including: (1.) Certificate of Incorporation; (2.) Business Registration Certificate (for HK Company only); (3.) 20 copies of the Memorandum and Article of Associations; (4.) Company Seal; (5.) Company Signature Chop; (6.) 20 pages of Share Certificates; (7.) An official record book ; (8.) Other copies of documents retained by the government, for example, appointment of the first director, notice of the directors who have agreed to accept service of notices, registered address notices, etc.

     

    [Q] Can I change the company's name after registration?
    [A] Yes, you can always change the name of the company. But in the case of newly registered companies which intend to use a new name, a search must also be carried out. If the name is found to be acceptable, the Registrar of Companies will be able to submit documents for the change its name. The name change by the government will take around 5 days and once completed, you will receive a certificate confirming the new name from the Registrar of Companies.