I’m starting a new business and have come across something called a “shelf corporation”. What is a shelf corporation?

A ‘shelf corporation’ is an incorporated entity that either:

• Never carried on a business and never owned any assets;
• Carried on a business and owned assets in the past, but is now inactive without any assets.

Shelf corporations that carried on a business in the past for a number of years, and have a good credit history are of great interest to individuals that want to start a business. This is because banks and other financial institutions usually only make loans to established corporations with a favorable credit rating.

ABOUT THE AUTHOR

ALLAN MADAN

CA.CPA.CGA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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