Definition: A shelf firm is a organization which has been designed but has ceased trading. Its memorandum and articles can be bought ‘off the shelf’.
supply: ANZ Bank Economic Dictionary
Back in the ‘good old days’, it took really a though to build (or incorporate) a company. However, people today usually needed a new organization ASAP, so providers of business registration solutions would pre-create corporations and have them ‘sitting on the shelf’, prepared for sale when necessary.
A person wanting to create a corporation fast could purchase a single of these off-the-shelf companies (or shelf corporations as they are far more typically termed) quickly and simply. All that was required for a buyer to buy a shelf firm was for the provider to transfer the shelf company ‘s shares to the purchaser, and arrange for the resignation of the directors of the original shelf business, who would be replaced by the new directors (the purchaser or their nominated agent/s). Often, the shelf corporation name would also be changed by the buyer.
With the advent of higher-tech organization registration solutions such as Cleardocs, it’s no longer important to wait long time periods to produce a new business, so the shelf business business enterprise has died down significantly. It also suggests that there is less administrative hassle and expense in the creation of a new enterprise (compared to buying a shelf business) mainly because you do not want to modify directors, possibly modify the name of the organization, transfer shares and spend stamp duty on the shares tranfer.