Historically shelf corporations were considered a legitimate way to streamline a startup. They were especially useful prior to the introduction of electronic registration when setting up new corporations used to take months to do. Selling them as vehicles to get around credit guidelines is fairly new. Shelf corporations are also called aged corporations, seasoned shelf corporations, off the shelf company and shelf corps. It is NOT the same as shell corporations. Shell corporations are completely different entities, both in scope and in formation and typically have no significant assets or operational structure.
Shelf corporations are legal and do have legitimate purposes. They have been used by someone who may not otherwise get approved for a bank loan, credit line, or government contract because they or their existing company do not have the required credit scores or a two to five year established business history. A long-established company might get approved for more credit and funding. A company that has been open for 10 years will look more qualified than one just opened this year. This might help to secure more credit and funding as the majority of businesses fail within four years, and only a small percent make it to 10 years or more.
Shelf corporations do provide some benefits including establishing an instant history for a company, improving company image, and even make it faster to pursue business endeavors because the company is already formed and ready for immediate delivery and faster to obtain business licenses. And shelf corporations gives you a faster ability to bid on contracts, saving time by foregoing the time and expense of forming an all new corporation and corporate filing longevity.
Frequently people purchase such companies in Nevada, Wyoming or California as well as Delaware due to regulatory considerations. Shelf corporations include articles of incorporation, "Action of Sole Incorporator" document which transfers the company to you, minutes of meetings (blank sample forms), a corporate kit (record book) and stock certificates (blank, un-issued shares). It also includes a corporate seal, corporate bylaws (unsigned forms), registered agent service and federal tax ID number.
However, they can be and have been used as vehicles for common financial crime schemes such as money laundering, fraudulent loans and fraudulent buying. By virtue of the ease of formation and the absence of ownership disclosure requirements, shell and shelf companies are an attractive vehicle for those seeking to conduct illicit activity." FDIC Special Alert, April 24, 2009.
As has been well publicised, with all the extra 'hype' surrounding neuroscience, there is a danger of following the pseudo-neuroscience that may have originated from over-zealous interpretations, vivid imaginations, and plain old misunderstandings - rather than being based on good science.