A ready-made company is also commonly known as a shelf company.
Purchasing a ready-made company is often seen as a fast hassle free alternative to setting up a new company from scratch. There are many benefits to purchasing a ready-made company however the speed and hassle compared to a new company is probably no longer the main advantage. Years ago to start a new company required original signed forms and paperwork now it can all be done electronically saving time. Nevertheless there is certainly still a place for ready-made companies as they have lots of other advantages over a forming a new company.
You might not be entirely sure what a ready-made company actually is -
The definition of a ready-made company is a company that has been incorporated not to trade but to be put on the shelf until it has aged. It is incorporated usually as a dormant company and remains dormant until it is purchased. Formation agents usually have a stock of ready-made companies they have previously incorporated for re sale to a person or company that required a company without going through the process of starting a new company.
A ready-made company can be transferred to the new owners within 24 hours.
Click here to view our ready made UK Shelf Companies.
Some top tips to consider when looking to purchase a ready-made company are:
A ready-made company is great because you can feel secure that it has already been set up correctly with the company registrar.
Knowledge of the Formation Procedure
Even though the registration of new companies has been simplified with the presence of the online system, there is still a lot to think about when starting your company from scratch. You only have once chance to get it right and this can be a daunting experience. You knowledge understandably maybe limited on what is required for a company set up.
If you chose to purchase a ready-made company you will by passing the whole formation procedure making it a great choice for some new entrepreneurs.
Immediate Company Number
Although new companies are now usual formed within 24 hours this cannot be guaranteed.
When starting out in business you may be looking to establish contacts first before taking the plunge to set up the business. In which case the need for a company and company number may come sooner than expected and you can’t wait for an incorporation to take place. This is where a ready-made company is a perfect solution. As soon as you purchase the company the name and number are available to you immediately.
Company Name and Business Activates
You might find a ready-made company name that is perfect for your expected business activities, however this is not always the case. Fortunately you can easily change the name of your ready-made company and some formation agents do not charge for this service. It usually takes around 24 hours to change the company name.
As a readymade company is a dormant company with no trading history it is safe to purchase this type of company without the worry of outstanding credit and debts. Although we would recommend that you always check the trading history as some companies do sell ready-made companies that have previously traded.
Once you have purchased a ready-made company the formation agent will arrange for the company to be transferred over to you. You should then receive a set of company documents. You should expect to receive some if not all of the documents listed below:
- Certificate of Incorporation – This will show company name, company number and the date of registration with Companies House
- Change of Name Certificate – You will only receive this if you have decided to change the company name. The certificate will show both the old and the new name.
- Full Company Register – The register will show the new appointments to the company and the officers who have resigned. Once you take ownership of the ready-made company it will be your responsibility to keep this document up to date.
- Minutes of The Meeting – The meeting is held to confirm the agreed terminations and appointments within the company. It will also confirm that the registered office address has been changed.
- Certificate of None Trading – This is an important document as it shows the company has not traded since incorporation and is therefore clean of any debts or charges against the company.
- Cancelled Share Certificates – You should expect to receive the cancellation of shares to prove that all the shares have been transferred to you. Please be aware that this will only be updated with Companies House once a confirmation statement previously known as annual return has been filed. Although they are usually only filed annually on the anniversary of the date of incorporation it is always recommended to file early to update Companies House of the new transfer of shares.
- New Share Certificates – This will show the allocated number of shares, share value and name of the new shareholder.
- Transfer of Shares – This document shows the transfer of shares from one shareholder to another.
Please be aware that not all formation agents will provide all the documents listed above and it is always best to check before you purchase the company.
Some of the main reasons to purchase a ready-made company are:
- Boost your business with an established company – reliability comes with an aged company, clients and businesses will trust you more as the company will have been established for a while
- Establish business relationships easily – business and banking relationships are easily established with an older company
- Gain confidence from customers – new and existing clients will feel more confident dealing with you as your company will have a history
- Simplicity – the process is simple and straight forward, Shelf Companies are immediately available to transfer over to you
Overall the purchase of a ready-made can have many benefits and it’s a great option for many.
Click here to view our UK Shelf Companies.