Mistakes and Scams to Avoid When Buying Shelf Corporations

You have done your research and you are now certain that you need to buy a shelf corporation. You are new in this, and you do not know what to expect. As a first time buyer, you are bound to make mistakes, but you have come here right on time. Here are some mistakes you should avoid so that you get a better deal on the shelf company you are buying.

Mistakes

  • Overpaying for the shelf company
  • Buying a company with hidden liabilities
  • Buying a company that comes with a guarantor
  • Purchasing a shelf company with tax returns
  • Purchasing a shelf company with bad credit
  • Buying a company not owned by the seller

Scams

There are scams you need to be aware of to avoid losing thousands of dollars. Here are some of them.

Established credit scam

Mostly the seller of the company you are buying from has a legitimate business. However, they will give you empty promises when selling the shelf company. The seller will tell you that you get established lines of credit. You will be tempted to give in to this offer without any thought. As you will find out after buying the company, things will be very different from what you were told. However, it would be too late. So, make sure you avoid such a scam.

Personal guarantor scam

In this scam, you are promised of getting a personal guarantor and a perfect credit score. Since you urgently need funding for your business, you oblige to the offer. Unknown to you, there is no guarantor, or if there is one, the seller is using fraudulent credentials. You end up losing money and get into a legal battle with the guarantor.

Fraudulent financial scam

You will also be shown non-existent tax returns and bank statements when you are buying a shelf company. What you get are made up documents which will only put you in trouble. You can escape this scam because you need some convincing on why you should use a fake tax return when applying for funding.

Secretary of state data harvesting scam

You may not detect this scam easily. The scammers usually do not have a website and do everything alone. What the scammer does is advertising a shelf company at a lower price. You may think that you are getting a good deal. After a few months or years, you find out that you can no longer use the shelf company. You will find out the hard way the person who contacted was not the original owner of the company. The owner did not probably sell the company to anyone. It is the scammer who sold the company without the owner knowing. What is worse is not only losing your money but the real owner can sue you.

If you are planning on buying shelf corporations with credit, make sure you avoid these mistakes and scams. It will save you thousands of dollars. It is always better to be safe than sorry. So, take precautions before you make a purchase.

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