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New formation vs. shelf company

Estab­lish­ment of a new com­pany vs. shelf com­pany

Start­ing a busi­ness is a sig­ni­fic­ant step and presents a num­ber of chal­lenges for any bud­ding entre­pren­eur. One of the first con­sid­er­a­tions con­cerns the way in which the com­pany is to be launched. There are two options to choose from: a tra­di­tional start-up or the acquis­i­tion of a shelf com­pany. Both meth­ods have their advant­ages and dis­ad­vant­ages, but espe­cially in today’s fast-paced busi­ness world, a shelf com­pany can be an attract­ive altern­at­ive to the time-con­sum­ing and nerve-wrack­ing pro­cess of found­ing a new com­pany. In this art­icle, we com­pare the two approaches and explain why the shelf com­pany is often the bet­ter choice.

What is a shelf com­pany?

A shelf com­pany is a com­pany that has already been estab­lished but is not yet oper­a­tional and is offered for sale by spe­cial­ised pro­viders. These com­pan­ies are fully leg­ally con­sti­tuted, entered in the com­mer­cial register and ready to be put into oper­a­tion imme­di­ately. They are often lim­ited liab­il­ity com­pan­ies (GmbH) or pub­lic lim­ited com­pan­ies (AG) that are simply wait­ing to be taken over by a new owner.

Advant­ages of the shelf com­pany

  1. Sig­ni­fic­ant time sav­ingsThe biggest advant­age of a shelf com­pany is prob­ably the con­sid­er­able amount of time it saves. While it can take sev­eral weeks to months to set up a new com­pany — from pre­par­ing the incor­por­a­tion doc­u­ments, not­ar­isa­tion, entry in the com­mer­cial register to open­ing a busi­ness account — a shelf com­pany is ready for imme­di­ate use. For entre­pren­eurs who need to act quickly to cap­it­al­ise on a busi­ness oppor­tun­ity, this time sav­ing is invalu­able.
  2. Imme­di­ate abil­ity to actWith the acquis­i­tion of a shelf com­pany, busi­ness can begin imme­di­ately after the pur­chase. As all bur­eau­cratic hurdles have already been over­come, noth­ing stands in the way of the oper­a­tional start. This is par­tic­u­larly advant­age­ous if busi­ness oppor­tun­it­ies arise at short notice or if the mar­ket requires the com­pany to take action without delay.
  3. Less bur­eau­cratic effortFound­ing a new com­pany can involve a lot of bur­eau­cracy. Start­ing with the pre­par­a­tion of the art­icles of asso­ci­ation, through coordin­a­tion with the not­ary, to the lengthy wait­ing period for entry in the com­mer­cial register — all this costs time and nerves. With a shelf com­pany, this entire form­a­tion pro­cess is elim­in­ated as everything is already pre­pared. The entre­pren­eur can con­cen­trate fully on busi­ness suc­cess instead of deal­ing with paper­work.
  4. Pro­fes­sional and estab­lished appear­anceAnother advant­age of the shelf com­pany is that it is already entered in the com­mer­cial register and there­fore gives an estab­lished and pro­fes­sional impres­sion right from the start. This can be par­tic­u­larly help­ful if the com­pany wants to start doing busi­ness with part­ners or cus­tom­ers imme­di­ately. A com­pany that is already registered looks more trust­worthy and reput­able than a brand new com­pany that is still in the pro­cess of being foun­ded.
  5. Facil­it­ated lend­ing: Banken und Kred­it­ge­ber sind oft zurück­hal­tender, wenn es darum geht, einer neu gegrün­deten Gesell­schaft Kred­ite zu gewähren, da das Aus­fall­risiko höher eingeschätzt wird. Eine Shelf Com­pany hinge­gen, die bereits eine gewisse Zeit besteht – auch wenn sie nicht aktiv war – kann bei der Kred­itver­gabe von Vorteil sein. Die Bon­ität einer Shelf Com­pany wird oft als sta­biler angese­hen, was den Zugang zu Fin­an­zier­ung erleichtern kann.

Dis­ad­vant­ages of found­ing a new com­pany

  1. Long wait­ing timesAs already men­tioned, set­ting up a new com­pany is a pro­cess that takes a long time. It can take weeks or even months from the draft­ing of the art­icles of asso­ci­ation to the final regis­tra­tion. These wait­ing times can mean that busi­ness oppor­tun­it­ies remain unreal­ised or the start of the com­pany is unne­ces­sar­ily delayed.
  2. Com­plex­ity and bur­eau­cracyStart­ing a busi­ness involves a large num­ber of bur­eau­cratic require­ments. Coordin­at­ing with vari­ous insti­tu­tions, obtain­ing author­isa­tions and ful­filling legal require­ments can quickly become a chal­lenge. This is a con­sid­er­able dis­ad­vant­age, espe­cially for entre­pren­eurs who want to con­cen­trate on their busi­ness idea.
  3. Increased risk of errorsWhen set­ting up a new com­pany, it is easy to make mis­takes, be it when draw­ing up the art­icles of asso­ci­ation, choos­ing the right legal form or com­ply­ing with legal require­ments. These mis­takes can be costly and fur­ther delay the start of the com­pany.

Con­clu­sion

Für viele Unternehmer stellt die Vor­rats-GmbH oder Vor­rats-UG eine über­le­genswerte Altern­at­ive zur klassis­chen Neu­gründung eines Unternehmens dar. Die erheb­lichen Vorteile – ins­beson­dere die Zeit­er­spar­nis, die sofortige Hand­lungs­fähigkeit und der reduzierte bürokrat­ische Aufwand – machen sie zu einer attrakt­iven Option, ins­beson­dere in einem Umfeld, in dem Geschwindigkeit und Flex­ib­il­ität entscheidend sein können. Während die Neu­gründung durchaus ihre Berech­ti­gung hat, vor allem wenn spezi­fis­che Anfor­der­ungen an die Gesell­schaft ges­tellt wer­den, ist die Shelf Com­pany eine exzel­lente Wahl für alle, die schnell und eff­iz­ient in die Geschäft­swelt ein­steigen möchten.

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