Avoid dissolved and reinstated shelf companies
We only sell shelf companies that we filed, maintained properly, and filed all the annual reports. Many of our competitors are selling aged shelf companies that were dissolved and reinstated. Avoid any company that was dissolved and reinstated. The lenders flag those companies.
Inspect what you expect
Always verify that the company was filed and well maintained before you buy the shelf company. Look at the history and verify that the company wasn’t dissolved and reinstated. Avoid any seller of shelf companies that minimizes this problem.
When an aged shelf company has been dissolved and subsequently reinstated, it means that the company ceased to exist as a legal entity for a period but was later brought back into existence through a process known as reinstatement. Here’s what typically happens when a company goes through this process:
Dissolution: Dissolution is the legal process by which a company’s existence is officially terminated. This can happen for various reasons, such as failure to file annual reports, pay fees, or comply with state regulations. When a company is dissolved, it loses its legal status, and its assets and liabilities may become subject to certain legal procedures.
Reinstatement: Reinstatement is the process of restoring a dissolved company to its previous legal status. To reinstate a company, the business owners or authorized parties must typically follow a specific procedure outlined by the state’s business regulatory agency. This often involves rectifying the issues that led to the dissolution, such as paying outstanding fees, filing missing reports, and addressing any compliance issues.
Effect on the Aged Shelf Company: When an aged shelf company has been dissolved and reinstated, its history usually reflects this interruption. Potential consequences may include:
A gap in the company’s history during the period it was dissolved.
Changes to the company’s status, such as a change from “active” to “dissolved” and back to “active” on official records.
Potential challenges related to its creditworthiness or reputation, as some parties may view the dissolution negatively.
It’s important to note that the impact of dissolution and reinstatement can vary depending on the state’s laws and regulations, the reason for dissolution, and the specific circumstances of the company. Here are some considerations:
Credit and Reputation: Some creditors, lenders, and business partners may view the period of dissolution as a red flag or a sign of instability. They might be more cautious when dealing with a company that has undergone this process.
Business History: The company’s business history and creditworthiness may be affected by the dissolution, especially if it had a strong credit history before dissolution. Rebuilding trust and creditworthiness may take time.
Legal and Tax Implications: Companies that have been dissolved and reinstated should ensure that they comply with any outstanding legal and tax obligations, as well as any requirements imposed by the state as part of the reinstatement process.
If you are considering acquiring an aged shelf company that has been dissolved and reinstated, it’s crucial to conduct thorough due diligence to understand the reasons for dissolution, the implications of the reinstatement, and how it might impact your business plans. Consulting with legal and financial professionals experienced in the specific state’s business regulations is advisable to ensure that you are fully aware of any potential challenges or legal obligations associated with the aged shelf company’s history.