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A shelf corporation is sometimes viewed as a great way to get your business recognized and to make it easier to get credit. If you are going to contact the bank to see about a corporate credit card or a line of credit, you will have better luck if your business is a couple of years old instead of a couple of months old.

In the eyes of the lender, it reduces the risk involved should they decide to issue you credit. Since at least 50% of all new businesses fail in the first year, the fact that you are a couple of years old significantly reduces the liability in their eyes. This could mean the difference between you getting the corporate credit you need or it being denied. It can also affect your credit limit and the amount of interest that you will pay on it.

Consumers also find you to be more appealing when you have some longevity behind you. Consumers are becoming more interested in finding out how long a business has been in place before they make a purchase from it. If they see you have just started out they may buy what they want from someone else. However, if the purchase of a shelf corporation makes it appear older than they will assume your business has been doing well.

Other businesses will feel this way as well so a shelf corporation can help you secure a very profitable deal with them. They want to make sure the items they purchase or the services they need will be fulfilled. If your business is new, they may feel that you don't have the skills yet to take care of such a large order or to meet their ongoing needs. They don't want to be among your first customers and your learning curve.

Some individuals consider a shelf corporation to be deceptive, and in some ways it is. After all you are using it to portray your business as one that has been around for longer than it has. The rule of earning the trust of the consumer by being honest comes an ethical issue with shelf corporations. Others feel that you need to have a good business strategy in place to be successful, and a shelf corporation is just another way to do it.

There are plenty of factors you need to consider if you heading down the road towards a shelf corporation. Make sure it has a clean record with consumers as you don't want to be connected with complaints that have been filed against a business name. If it is a legitimate shelf corporation that has never been used this shouldn't be an issue, but make sure you look at it as well.

How much is a shelf corporation going to cost you? This depends on several factors including the age of it and who is selling it. Some shelf corporations are affordable while others will eat up all of your start up costs. You need to be able to afford the shelf corporation if you are going to proceed with it. Otherwise you risk very important parts of your business not getting the attention they need due to a lack of funding.

Only you can decide if a shelf corporation is going to be right for you or not. Make sure you take the time to consider both sides of the issue. You also need to think about the cost involved. A shelf corporation isn't always cheap but it can lead to more sales for your business. Your personal opinion about the process is going to influence your decision as well.

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About the Article Author

Robert Bain - Discover the the difference between typical business credit and real corporate credit at this website.