An ‘off-the-shelf’ company or ready-made company is a pre-registered limited company, however, it has never been traded. An ‘off-the-shelf’ company is ready for immediate use and can be purchased after paying a certain cost for it. An ‘off-the-shelf’ company is usually registered through a ‘company formation agent’ and is later transferred to a customer. These companies can into existence when submissions for company registration were made to the Companies House in written or on paper and generally took a few weeks to get completed. Company formation agents keep a ready list of created ‘off-the-shelf’ companies for UK citizens’ to select from. When someone in the UK wants to start a business, they can select the company and it is rapidly transferred to the newly registered owner or owners.
In simple terms, an ‘off-the-shelf’ is defined as a company that has previously been listed by an accountant or a formation agent or lawyer, and which is all set for sale to an individual who is interested in setting up a new company. Generally, a company formation agents ‘off-the-shelf company' packages enable citizens in the UK to opt for a company that previously has a registration number and has the provision for changing the name of the company. The package may also include:
Before the Companies House developing electronic incorporation, typical incorporation would usually take more than a week to get complete. Continuing to maintain a stock of ‘off-the-shelf’ companies would mean that a formation agent could make available a company instantaneously when a client had a vital need of one. Even though the time for creating a company has decreased immensely, formation agents continue to face increased demand for ready-made companies. In case an individual requires to purchase a company immediately and does not have time to wait for Companies House to process an application, opting to purchase an ‘off-the-shelf’ is the most viable option available for UK citizens. Also, if the deadline is missed, then in such a scenario an aged company can be used to offer a historic incorporation date.
Vintage companies are ready made companies that have been registered with companies house for a considerable period of time. Sometimes one could have interest in buying a vintage shelf company in the UK.
When an individual decides to buy a company, there are three dissimilar options accessible:
An ‘off-the-shelf’ company or ready-made company already exists and is available for a buyer to purchase. Citizens, in the UK, prefer to buy a limited business entity to start a brand new company, i.e., a company which doesn’t exist till the time the citizens opt to register it themselves. The benefits of a ready-made company or an ‘off-the-shelf’ company can upsurge their demand for some individuals, depending on their aims. Additionally, there are also various categories of an ‘off-the-shelf’ company which aid explicit and unpredictable commercial needs.
Do you want to buy an off the shelf company or a ready-made company in the UK? Buying a ready-made company is usually more costly than the registration of a new entity. Off-the-shelf or ready-made companies do experience a ‘holding cost’. Also, it must be noted that ready-made companies or ‘off-the-shelf’ companies can have certain drawbacks attached to them. Disadvantages vary and are specific to an individual off-the-shelf company being evaluated for purchase.
Ready-Made companies or off-the-shelf companies don’t have any benefits as compared to the new limited company formations, if not there are solid commercial whys and wherefores for doing so. These companies were formed by formation agents to avoid wastage of time and evade processing delays at Companies House. However, as now online company formation applications are entertained within an average of 3 hours, the request for ‘off-the-shelf’ companies or ready-made companies has considerably decreased. Now, ‘off-the-shelf’ companies are only of attention if there is a requirement for lengthier trading history.
As a norm, ‘off-the-shelf’ companies or ‘ready-made’ companies for sale are further expensive. The cost of these companies encompasses all the charges paid to sustain the aged shelf company in perfect standing up-to-date. The change of name in case of a limited company must also be accepted by the Directors and will be established by a ‘Name Changed’ Resolution. The processes of making alterations to an ‘off-the-shelf’ company must only add time and cost to company formation. A process of changing the name of an ‘off-the-shelf’ company usually takes 2 working days. Unless an individual has precise reasons, Limited Companies ‘off-the-shelf’ do not usually add any cost in terms of money and time. Also, companies off the shelf are not value-added tax (VAT) registered nor will they have a bank account and cannot be initially registered for VAT. Get complete guideline of buying ready made vat registered companies in the UK.
The process of forming an ‘off-the-shelf’ company is no different than that of any new standard business incorporation. It is imperative to evaluate the cost of purchasing an ‘off-the-shelf’ company considering registering a new one today. Due to ease of registration (with new online registration channels) the demand for shelf companies has decreased. The process of creating a ready-made limited company or limited liability partnership (LLPs) is no dissimilar from that of any other usual business incorporation.
Like pre-existence being an advantage of ready-made companies, its major disadvantage can be the uncertainty surrounding its past. When a UK limited company’s ownership is moved from one owner to another, there is a change in the shareholders of the company. By acquiring an entity, shareholders also take over an organisation's available assets comprising of bank accounts, fixed assets, cash along with value-added tax (VAT), and pay-as-you-earn (PAYE) registration.
Any questions? Schedule a call with one of our experts.
Sumit Agarwal Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.
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