When you want to do business, you have two ways to go about it- you can either buy a ready-made company or start from zero. Most entrepreneurs buy shelf corporations because they do not want to go through the hassles of starting a business from the ground up. It allows them to bid on contracts and obtain credibility. The procedure for setting up a shelf company differs from one state to another. However, the following applies to most locations.

Having a poor credit history should not prevent you from accessing the funds you need to take your small business to the next level. You can still get funds when you opt for buying a shelf corporation. A shelf corporation is created by following the same procedure as the usual company. Here is how to go about creating a shelf company.

Create a business name

The first thing you have to do is create a business name. Look for one that s catchy that will be appealing to the investor. A right name will lure potential investors into buying the shelf company. Do a name search online to see the ones that are still available. You do not want to use a name that has already been used. The appropriate name will be one of the selling points you will use to attract investors.

Register the business with the government

The ‘C’ corporation is the most common business structure used in shelf corporation formation.

The business structure allows for shareholders to hold the company stock. You need to file the articles of incorporation and the by-laws with the government. The Articles of incorporation show details about the company’s mission, name, and business structure. The regulations, on the other hand, show the way the company is to be governed.

Apply for the Employer Identification Number 

The next thing you have to do is apply for the Employer identification number with the internal revenue service. You will need this to establish a business account. Once you have completed the IRS form, you will be issued with an employer identification number.

Meet the requirements for the municipality

You must meet the business filing requirements for your municipality and state. The main objective of building a shelf company is to create a company that is in good standing. You have to acquire the seller’s permits, business licenses, and complete the tax registration. You will need these when selling the company to an investor.

Build business credit

The shelf corporations are placed on the shelf. However, you still have to build business credit. Entrepreneurs ask for financial records before purchasing the shelf company. You should monitor the business credit regularly. Make sure you make payments on time so that the shelf company will have a good credit record.

In case you do not want to create a shelf business from scratch, you can buy the shelf corporation on sale. It will save you time. However, make sure you research the service provider to avoid falling prey to the scammers.