Shelf corporations are not looked upon unfavorably by regulators, lenders, or the business reporting agencies. Many say they are unethical, borderline illegal, and some call them a fraud.

From Dun & Bradstreet… “It is unclear whether it is legal to use shelf corporations to access credit. It is clear, however, that this is a deceitful, unethical maneuver that serious entrepreneurs should avoid.” If the credit bureaus learn about the company being under new management, they will list it on their reports, effectively “re-aging” the company.

“Shell and shelf companies can be created domestically or in a foreign country. Shell and shelf companies are often formed by individuals and businesses to conduct legitimate transactions.

However, they can be and have been used as vehicles for common financial crime schemes such as money laundering, fraudulent loans, and fraudulent purchasing. By virtue of the ease of formation and the absence...

A Limited Liability Company (LLC) is a form of business whose owners enjoy limited liability, but which is not a corporation. A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. An LLC is not a corporation; it is a legal form of company that provides limited liability to its owners. LLCs do not need to be organized for profit. In certain US states, businesses that provide professional services requiring a state professional license, such as legal or medical services, may not be allowed to form an LLC but required to form a very similar entity called a Professional Limited Liability Company (PLLC). A Limited Liability Company (LLC) is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation.

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