Shell Company for Sale – AI Accountant Chai Chung Hoong Tells What’s Good and What’s Bad
Think you’re ready to purchase a shell company for sale? Let’s look at the advantages and disadvantages of owning this company type.
A Comprehensive Review of the Advantages and Disadvantages of a Shell Company
Chai Chung Hoong, one of AI Accountant’s top Account Manager in Singapore has helped many business owners over his 10-year career. Some have incorporated companies from scratch. Others choose to purchase a shell company. But which is the better option? Let AI Accountant Chai Chung Hoong expertly walk you through the entire company setup process.
Understanding What Is a Shell Company Singapore for Sale
A shell company in Singapore is a legitimate business. It is incorporated as per the required standards in Singapore. Therefore, it is a fully functioning entity except that it has been dormant since its incorporation. Other terms it is known by includes “ready-made company”, “shell company” or “aged corporation”.
Since it has been dormant for some time, this company is put in a “shell” so to speak. The company is then left on that shell for some time until the right moment comes to sell. This usually happens when a buyer comes along. The purchaser usually acquires this category of company for a specific purpose.
Despite its inactive status, a shell company must still adhere to the strict compliance rules. It needs to be up to standard in case it must start operating instantly upon purchase. Essentially, the shell company needs to be ready to go at a moment’s notice. The key features of a shell company for sale include:
- Locally registered (Private Limited company).
- Have a local Singapore address (no PO Boxes allowed).
- One local resident director (Singaporean, Permanent Resident, or a valid work visa holder including Employment Pass, Entrepass, and Dependent Pass).
- One Company Secretary who must be a local resident. This person must be appointed within 6-months of incorporation.
- One shareholder minimum (maximum 50).
- More than one foreign or local director (may or may not be shareholders).
- Foreign ownership with 100% shareholder rights.
- Minimum paid-up capital $1.
What Are the Advantages?
A shell company for sale has certain advantages that attract potential investors. These include:
- Not having to go through the company registration process from scratch.
- Buyer can start business operations immediately.
- Foreign entrepreneurs can merge their existing business with the shell company.
- Investors are buying a mature company that comes with no liability.
- Allows the buyer to make certain modifications to the company.
- Higher chance that the bank will approve the loan.
- These companies can be used to file for an offshore status.
What About the Disadvantages?
Every pro has its con, and a shell company is no different. The disadvantages include:
- “Mature” status comes with higher premiums.
- Investors can’t choose the company structure type.
- Investors can’t leverage on the tax benefits offered for newly-incorporation entities.
How Do I Register a Shell Company in Singapore?
Once you’ve decided a shell company is the way forward for your business, the next step is to complete the registration. You would need to:
- Choose appropriate company structure.
- Thoroughly go through the purchase details with the seller.
- Sign the purchase contract.
- Do the ownership transfer.
- Update the Articles of Association as per the Companies Act requirements.
- Submit the completed documents to the relevant governing body.
Need Assistance? Ask AI Accountant Chai Chung Hoong For Help!
Buying a shell company for sale can be an easy, hassle-free process with the right team on your side. That team is AI Accountant. Under the expertise of Chai Chung Hoong and our dedicated team of experts, we will handle every tedious part of the process to make it as easy for you as possible. We have partners offering Company Secretary and Nominee Director services. Save cost, save time, and save yourself the hassle and let AI Accountant take care of everything for you. For more information, visit our website or contact us today.