What is an Aged Corporation? + Benefits of Buying One

Purchasing an aged corporation can be a strategic move for aspiring entrepreneurs. An aged corporation, often known as a shelf corporation, refers to a business entity that has been registered for several years but has not been actively conducting business. This option provides various advantages, such as immediate credibility, established business structures, and easier access to business credit.

In this blog, we’ll delve into the benefits of buying an aged corporation and how it can enhance your entrepreneurial journey.

What is an Aged Corporation?

An aged corporation, often referred to as a “shelf corporation,” is a legally registered business entity that has been in existence for several years but hasn’t been engaged in active business operations. These companies are usually maintained in good standing and can be purchased by entrepreneurs who want to benefit from the corporation’s established presence. Essentially, an aged corporation is a business that is legally “sitting on the shelf” until someone decides to take it over.

Benefits of Buying an Aged Corporation

Purchasing an aged corporation comes with several key advantages that can give your business a head start.

1. Instant Credibility

One of the most attractive benefits of buying an aged corporation is the instant credibility it provides. Businesses that have been around for a while are often seen as more reliable and trustworthy by clients, suppliers, and potential partners. This credibility can make it easier to establish important relationships and gain business opportunities quickly, which is especially beneficial in industries where reputation is critical.

Additionally, an aged corporation’s business history can be helpful when dealing with financial institutions or securing business deals. A company that has been legally established for years may be viewed as more stable and experienced, even if it hasn’t been actively operating.

2. Established Business Structure

When you purchase an aged corporation, you’re not just buying a name—you’re often acquiring an established business structure. This can include:

• Existing contracts and agreements
• Established operating procedures
• Potential customer bases
• Business relationships

This ready-made structure allows you to skip many of the early-stage challenges that come with launching a new business. For instance, you might inherit valuable contracts or agreements that can generate revenue from day one. Additionally, with established processes already in place, you can focus on scaling and growing the business instead of setting everything up from scratch.

3. Easier Access to Business Credit

Building business credit from scratch can be a slow and challenging process for new businesses. However, purchasing an aged corporation that already has an established credit history can give you access to lines of credit, loans, and favorable terms from financial institutions. This can help you invest in the business sooner and with more financial flexibility.

Having a solid credit history also increases the likelihood of securing loans with lower interest rates, further enhancing your ability to grow the business without facing excessive financial strain.

4. Legal and Tax Benefits

Another benefit of acquiring an aged corporation is the potential legal and tax advantages. Depending on the business’s history, it may come with valuable licenses, permits, or trademarks that would otherwise take significant time and effort to obtain. Moreover, an aged corporation might be eligible for tax benefits that could improve your financial position.

Of course, legal and tax advantages vary by jurisdiction, so it’s essential to consult with a financial advisor or attorney to understand the specific benefits you could gain.