Shelf companies and shell companies explained

As an entrepreneur, do you want to move into new areas and sell your own company, or set up a company without bureaucratic hurdles? Then shelf and shell companies could be exactly what you need!

In this article, you will learn what these terms mean, what you should look out for and what role notaries play. We will also show you how to see a notary online via the notarity platform and simplify processes along the way.

Overview

In general, both terms describe companies that are for sale. Their actual business consists of managing their own assets, i.e. the company’s share capital. These companies are characterised by the fact that they have already been formed and can enter into contracts straight away. This makes them an ideal way to become self-employed or start a business simply and inexpensively.

What is a shelf company?

A shelf company (Vorratsgesellschaft) is always set up with the aim of eventually being sold. In most cases, the founders of these companies are agencies or law firms that form companies and keep them “in stock”. At this point, therefore, there is no discernible business activity. They can take the form of a GmbH, OG, KG or even international legal forms. Before they are bought, they have no legal basis of any kind; only afterwards are they given a tax number and become liable to tax. In the vast majority of cases, the entire initial capital has already been paid in.

What is a shell company?

A shell company (Mantelgesellschaft) is a company that emerges from an existing GmbH or AG and is sold. In this case, the company was previously active in business, exists as a legal entity and is still registered in the company register (Firmenbuch).

Advantages

Despite higher risks, for example from legacy liabilities, a shell company offers some advantages. If the company is older and dormant, this can create greater trust among business partners and suppliers.

In addition, several annual financial statements and tax assessments are available that you can submit when applying for financing. As the former company already has a certain credit history, a good rating can be achieved more quickly.

The advantage of shelf companies is that they have no legacy liabilities or debts from the past. They can also be transferred by notarial deed within 48 hours, which saves a time-consuming formation audit. Furthermore, the existing bank account can be taken over. This makes them perfect if you need a company that is ready to do business immediately and want to get started straight away.

Buying shell and shelf companies

Buying a shelf company and buying a shell company are fundamentally similar, so we cover both cases together here.

The purchase involves the following steps:

• For shell companies: you should first arrange a meeting with the seller to clarify the financial situation of the shell company.
• As the buyer, you conclude a purchase agreement for the shelf or shell company. The purchase and transfer agreement must be executed as a notarial deed.
• In the same notary appointment, the application to the competent register is certified. If necessary, the list of shareholders and the company’s business purpose are also updated.

Executing notarial deeds online and digitally

Via the notarity platform, you can easily complete your notary appointment with a partner notary digitally. The process can now be completed flexibly from any location. Book an appointment with one of the partner notaries on the notarity platform here. The costs depend on the circumstances of the individual case. After booking the appointment, you will receive a quote from a partner notary and can then decide freely whether or not to accept it.

Before acquiring or setting up a shelf or shell company, it is advisable to seek advice from lawyers or professionals with knowledge of company law and local legislation in order to avoid potential pitfalls and achieve your objectives.