What Is Shelf Company And How To Purchase One In Singapore?

In Singapore, a shelf company is one that is incorporated as per the statutory requirements but is dormant. It means that the company is no longer in operation and does not carry out any business activities. Typically, a shelf company remains dormant until someone else acquires it and starts operating it once again.

Benefits of acquiring shelf companies

There are 2 benefits of buying a shelf company versus registering a brand new company to begin your company operations.

1. You can avoid the time taken for the registration process for a brand new company. Once you have completed the transfer of ownership, you may begin operating. In other words, you will save yourself quite a fair bit of time.
2. It may be easier to obtain business loans. Shelf companies are usually already in existence for a number of years before being bought over. Mature companies will usually get more preference from most banks or financial institutions.

A mature shelf company will definitely come at a premium price tag. Prices typically range from S$2,000 to more than S$10,000. The main determining factor of the premium is normally based on the shelf company’s age. 

It is critical to be mindful that you do your verification that the shelf company is cleared of any liabilities (financial).

If you have decided to buy a shelf company, you can proceed to seek out a suitable company that you want to buy. Again, the biggest deciding factor will be based on the age of the company.

After which, you negotiate on the price and terms of sale with the seller, followed by the signing of the transfer agreement, so you can take over the ownership of the company.

After taking over

You can now decide to change the company’s name and address, you may also appoint new directors and shareholders. Should you and the new shareholders decide to, all of you can amend the company constitution with the Accounting and Corporate Regulatory Authority (ACRA), as well although we do not recommend that.

If you wish to purchase a shelf company in Singapore, do feel free to get in touch with us! We can handle the entire purchase process to make it as easy for you as possible.

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