How to distinguish between shell company and real company?
Answers
Answer:
With the multitude of articles written and redistributed lately regarding the so called “Panama Papers” there has been a regurgitated interest in shelf companies vs. shell companies. What exactly are they? What is the difference? Who uses them? And Why?
Both types of entities have their purpose and function in the market place. They are a tool – just like a computer, a car or a pen. They can be used for the benefit of the company, employees, customers and society or they can be used to the detriment. Because of these “Panama Papers” there is currently a misunderstanding and misconception in the public that ALL Shell or Shelf companies are used for tax avoidance or evasion. That anyone who has a Shell or Shelf company is “trying to hid something”. And let’s be honest here, yes, there are a very small percent who have used shell companies for nefarious reasons. Just as a computer, a car or pen can be used the same. But the vast majority are used legally and lawfully for the means and purpose they were created.
What exactly are they and what is the difference?
A Shell company defined by Wikipedia:
“A shell corporation is a company which serves as a vehicle for business transactions without itself having any significant assets or operations … Shell corporations are not in themselves illegal, and they do have legitimate business purposes.”
A Shelf company defined by Wikipedia:
“A shelf corporation, shelf company, or aged corporation is a company or corporation that has had no activity. It was created and left with no activity – metaphorically put on the “shelf” to “age”. The company can then be sold to a person or group of persons who wish to start a company without going through all the procedures of creating a new one.”
Here at Wyoming Corporate Services, Inc. we do not offer, nor have we ever offered Shell companies, so we are not going to spend additional time discussing them.
We do offer Aged Shelf Companies. Companies that we formed ourselves, placed up on the shelf and have maintained all the State required records and fees. We guarantee in writing that they are all clean and pristine. They do not have EIN#, bank accounts, trade lines, D&B credit scores. They have never been used and this is the reason we can make such a guarantee. Visit our aged shelf companies page to browse a partial list of our current inventory.