When starting your own business you may ask yourself do I want to register a new company or should I buy a ready-made company? Ready-made companies can often be referred to as a ‘shelf company’. This is essentially a company which is pre-registered at Companies House. They have had no previous trading activity and has been sitting ‘on the shelf ‘waiting to be purchased. It is not to be confused with a company which is yet to be incorporated.
Previously all Companies were formed with nominee directors and shareholders in place. The reason for this is it was often faster to transfer a pre-registered company. Registering and new Limited company would take weeks to complete. When purchasing a ready-made company it allowed people to transfer the ownership. They could resign nominee officers then appoint the new individuals.
Should you choose a Ready-made or new Limited Company?
In recent years the demand for shelf companies has dropped considerably. This is due to the introduction of online formation systems. This allows people to incorporate their new limited company with their details on the company records from the very beginning. With the option for same day formations, you can register your company is just a few hours. Although incorporating a new company online is far more popular than purchasing a ready-made company there are still some reasons people require a shelf company. The most common reason is the incorporation date shows the company has been in existence for a number of years which can be beneficial as it gives the impression the company has been in business for a longer period. It may be the case the company has been registered with a particular name that is required by an individual.
If a ready-made company is required it is important to ensure it has been properly maintained. This means that all paperwork is completed and relevant fees are paid annually. There are various service providers who deal with the purchases of ready-made companies online for a fee. However, some people choose to enlist the help of an accountant who can check that everything is correct and above board, which gives the buyer peace of mind. This is a more expensive option obviously, but if it means that there are no mistakes made then it allows the process to be finished quicker.
If you wish to register a new Limited company we will be pleased to assist. Using our online formation software you can register your company in just a few hours.