Australian 'Shelf Companies'
What does the term 'shelf company' mean in Australia?

Years ago, it took a number of months to incorporate a company. Yet people often needed a new company straight away. So solicitors, accountants and shelf company providers would pre-incorporate companies and leave them sitting 'on the shelf' ready for their clients to buy. When a client came along wanting a shelf company, the shelf company provider would take one of the shelf company providers' shelf companies 'off the shelf' and sell it to the purchasing client. This would involve the shelf company provider transferring the shares in the shelf company to the purchaser (or to the shelf company purchaser's nominees). It would also involve the shelf company provider having to arrange for the resignation of the shelf company's original directors and for the appointment of new directors for the shelf company (these new directors would be as nominated by the purchaser/client). Further, the name of the shelf company would often be changed to a company name chosen by the purchaser of the shelf company.

However, nowadays, a company can be formed in a few minutes. So it is now far more common for a person who 'needs a company' to have the company formed newly for themselves and with their own choice of company name from the outset. This is simpler, quicker and does not involve transferring shares in the shelf company (nor the possible need for the transfer of the shelf company's shares to be lodged for stamp duty, and the subsequent payment of stamp duty on the share transfers) or the need for the existing directors to resign and new directors to be appointed. It also does not involve the possible need to change the shelf company's name to a more suitable company name.

However, even though the sale of 'shelf companies' in the strict sense is now quite rare, the terms 'shelf company' and 'shelf companies' have stuck (at least in Australia - in the context of UK company formation the term is more rare) - for example, even the Yellow PagesŪ still 'only' has the 'Shelf Company Services' category for this type of service, despite the fact that the majority of the 'shelf company providers' there listed now mainly offer brand new companies. So the Yellow PagesŪ Australian 'Shelf Company Services' category could just as easily be called, say, 'Company Formation Services', 'Company Incorporation Services' or 'Company Registration Services'.

This information has been brought to you by - Australia's first and only automated, triple award winning, online system for the creation of any type of Australian company. Click here, or on the 'Back' or 'Continue' buttons below, to go directly to the Incorporator website home page.