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Legal Review of Shelf Companies Before Acquisition

Incorporating a company entails choices that will shape its operation long after registration. Buying an existing company may save formation time but also transfers an entity with a legal history. A registry certificate is only the starting point.

What to keep in mind

Review books, minutes, financials, debts, guarantees, taxes, litigation, powers, contracts and assets actually owned.

Even a dormant company can carry liabilities, sanctions or unresolved compliance issues.

Distinctions often confused

Acquiring a shelf company's equity differs from creating a new entity or buying selected assets.

Frequently asked questions

Is an inactive company necessarily low-risk?
No. Dormancy does not establish the absence of debts or defects.
Is changing shareholders and directors enough after purchase?
No. Valid transfers, filings and treatment of identified risks are also required.

Informational content. It is not a substitute for professional advice.