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Doina Roman
Doina Roman Senior Consultant

Questions about Shelf Companies?

Helpful answers can be found in the FAQs

Foris Shelf companies can help you overcome several obstacles when starting a company – especially if it has to be fast and risk-free. You still have questions and do not know whether a shelf company is right for you? On the FAQs page you will find the most frequently answered questions and their answers.

The reasons for buying a shelf company

What problems does the purchase of a shelf company solve?

When founding and registering a company, you as the founder have to master numerous procedures to be able to act. Several business trips to the place of incorporation are often necessary for submitting all the required signatures. The time involved may jeopardise a transaction that has been scheduled.

 

By purchasing a shelf company, you are acquiring an already existing and registered company, these obstacles are dealt with in one step. You are immediately able to act without personal liability, whereas with an incorporation you would have to wait for the registration to be entered in the commercial register. Likewise, this can also take several days.

What are the advantages of buying a shelf company versus starting one?

By purchasing a shelf company, you are immediately ready to act. Setting up a company always involves risks and, above all, takes time.

As a founder, you are dependent on authorities such as the commercial register, banks or the notary’s office. Sometimes an entry in the commercial register can take up to 2 weeks. Banks require a lot of documents and paperwork to be completed to open an account. It takes even longer until the account is actually opened. 

By purchasing a shelf company, such steps are partially removed. At FORIS, these procedures have been standardised so that we can set up companies quickly, Moreover, all the companies on offer are already established i.e., registered in the commercial register. A FORIS shelf company is usually ready for take over within 24 hours and gives founders more time for other things.

Which risks do I avoid when buying a FORIS company?

The purchase of a shelf company avoids taking over unanticipated legacy burdens, unlike purchasing a company that has already been trading.

In addition, you can take over companies free of formation risks. When buying a shelf company, liability protection exists from the beginning. When a company is founded, there is a liability risk until it is entered in the commercial register.

The formation of FORIS shelf companies always follow a proven and legally secure procedure. You also benefit from our experience of over 8,000 company formations. 

Are shelf companies and shell companies the same?

Yes and no: for many a shell company is nothing more than a company that is already registered in the commercial register but it is not (or no longer) commercially active. 

But beware: a shell company can also have been a formerly active company, which therefore may also have inherited liabilities from its previous commercial activity. 

In the case of a shelf company, it has been dormant since incorporation and therefore operational activity is excluded. Shelf companies are established for the sole purpose of sale and quick acquisition and until their acquisition, have had no other business purpose than the management of their own assets. 

What is the difference between a shelf company and a letterbox company?

A letterbox company and a shelf company basically refer to a legally empty shell of a company. However, the purpose is completely different. 

Although the letterbox company only exists on paper, it also maintains a business operation for appearance’s sake in order to conceal the benefactors. 

However, when shelf companies, known as open shelf companies are set up, it is disclosed that the company has not yet engaged in any economic activity. They are merely already established to “keep companies in stock ready for sale purposes”. In the course of acquiring a shelf company, a commencement of operations occurs and the previously “dormant” company is brought to life. 

Is a shelf company registered in the commercial register?

Yes, all our shelf companies are registered in the commercial register. This is the biggest advantage of a shelf company.

Does a shelf company have to pay an IHK fee?

Our shelf companies are generally exempt from the obligation to pay an IHK (Chamber of Commerce) fee until they are sold. This is because shelf companies have no other business purpose than the management of their own assets and are only founded for the purpose of sale.

Why does FORIS not sell companies with a tax number?

FORIS shelf companies are not yet registered for tax purposes. There are several reasons for this:

Firstly, after acquiring your company, a provisional tax number can be applied for at most tax offices, which is usually issued shortly after application and is sufficient for issuing invoices. 

Secondly, a tax number applied for by us in most cases would not help the purchaser: the tax office responsible for our shelf companies is located in Bonn, and loses its jurisdiction if the company’s business address is moved. This is because the decisive factor for the jurisdiction of the tax office is not the registered office of the company, but the business address. This would mean that the purchaser would have to apply for a new tax number at the tax office responsible for the company’s location – despite having a tax number issued by the tax office in Bonn. 

How does the purchase of company shares impact tax-wise?

The transfer of shares to a company is exempt from VAT in Germany. 

Can several shareholders acquire a shelf company?

Yes, theoretically an unlimited number of shareholders is possible. However, the shareholder shares must be attributable. 

Can the name or the name of a shelf company be customised?

Yes, but unfortunately this is not possible before acquiring the company. However, after purchase you can change the name of your acquired shelf company in any way you wish. 

This is even expressly desired and takes place at the notary appointment and is part of the registration of changes entered in the commercial register and the ensuing commencement of operations. 

In addition to the company trading name, the new partners, the new address and the new managing directors are also registered. 

Can the name of the shelf company be retained upon takeover?

As a matter of principle, we insist that the company name is changed as part of the commencement of operations. However, in some cases it is possible to keep the name temporarily. For example, if the new company name has not yet been finally decided upon.

Can the nature and purpose of a shelf company be changed?

The nature and purpose of the shelf company prior to purchase is basically the management of its own assets and this cannot be changed. However, in the course of acquisition and the commencement of operations you are free to change the nature and purpose of the company according to your wishes. 

Are there differences between buying a shelf company in Berlin or buying a shelf company in Cologne or Bonn?

Yes, the difference lies in the commercial register or the competent registry court. This is decisive for the registered office of the company, freely selectable and independent of the business address of the company. 

Therefore, if you have a preferred registered office in mind for your company, you should also choose a company with its registered office there, as the process of transferring to another registry court can take several days. 

A change of register can be applied for through the notary. This makes it easy to change the register as the company’s registered office is linked to the registry court. 

Can the registered office of the shelf company be changed?

Of course, you are free to move the registered office of the company to a registration court of your choice in the course of acquisition and the commencement of operations at the notary.

Can a foundation be established by purchasing a shelf company?

No. The formation or “establishment” of a foundation – in contrast to the formation of a limited liability company (GmbH) – cannot be shortened by buying up an already existing foundation. This is also impossible due to the legal form, because a foundation cannot have shareholders/owners. The establishment of a foundation thus requires a complete recognition procedure to be completed with the foundation authority. 

Is the contribution of shelf companies into a corporation possible?

Yes. The contribution of a shelf company into an already existing corporation is possible. A shelf company does not behave different to other corporations. You can also purchase shelf companies with holding structures. Just talk to us about it.

What does the tax return for a shelf company look like?

A shelf company has the sole business objective of managing its own assets until it is sold. Up to this point, no business activity has taken place and no turnover has been generated.

When a shelf company is acquired and the commencement of operations is registered at the notary, including the change of business purpose and the subsequent start of business activity, this objective changes and the company is treated like any other corporation for tax purposes. This also means there is an obligation to file a tax return.

Can I purchase a shelf company from FORIS without share capital and only pay the surcharge?

No, this is not possible. German corporate law stipulates that proof of share capital is mandatory for the formation of a corporation. Therefore, there is no ready-made shelf company without share capital

What payment options do you offer for buying a shelf company?

Our most common payment option is by bank transfer. Before purchasing the company from your notary, you transfer the purchase price to our business bank account and after receiving your payment, nothing more stands in the way of acquiring the shelf company. 

Alternatively, however, you can also use a “Starksagung or Gutsagung“, (this is a kind of declaration of trust or guarantee) by your lawyer or notary or the escrow account of a lawyer or notary. We require both the declaration of trust and the confirmation of the purchase price in the escrow account in writing and signed by the lawyer or notary. 

Do I need a notary appointment to acquire a shelf company from FORIS?

Yes, you need a notary appointment, no matter what legal form you purchase – even if not all acquisitions of corporations are subject to notarization. 

This is required to complete the commencement of operations of the company and thus the registration of the changes to the company in the commercial register. Only after the commencement of operations can the company pursue its new corporate business purpose and thus become commercially active. 

Who chooses the notary and makes the notary appointment?

The choice of a notary is entirely up to you. Since we never appear in person as the seller at the notary (with the exception of the KG (limited partnership) and the GmbH & Co. KG. General partner and limited partner), but issue a power of attorney signed by our management to a proxy named by you in advance, it is not important for us where the notary’s office is. 

When, is likewise entirely up to you and your schedule. However, what is important is that we have the purchase price payment, information about the purchaser and the newly founded company prior to the notary appointment. 

Can I also acquire a shelf company with only partially deposited share capital?

No, unfortunately this is not possible. As long as the share capital is not booked in the balance sheet with the legally determined amount, the company has an open claim against the shareholders. In the event of the company’s insolvency at the latest, they would then be liable for the amount of deficient capital. 

What costs are to be expected when purchasing a shelf company?

In addition to the purchase price, you will also bear the costs of the notary and the commercial register as well as any costs for opening a bank account. For a limited liability company, for example, these can amount to at least 730 euros, but they can also amount to 3,500 euros.

Is the share capital included in the purchase price when acquiring a shelf company?

Yes, the share capital or nominal capital even makes up the majority of the purchase price. The purchase prices of our shelf companies consist of share capital, the formation costs, and our profit margin.

How high are the costs for the notary and the commercial register when acquiring a shelf company?

The notary fees and the costs for the registry court also depend on the legal form and the amount of share capital, however, these should generally be between 730 euros and 3,500 euros. 

For example: for a GmbH with share capital of 25,000 euros, fees of 150 euros are incurred by the registry court. The registration of changes with the commercial register at the notary costs 62.50 euros. The notarization of the shareholders’ agreement and the appointment of the managing director by the notary costs 384 euros. 

The notary charges 96 euros for preparing the list of shareholders and a further 37.50 euros for creating an XML file. The total costs plus 19% VAT on the notary fees and other notarial expenses amount to 730 euros. 

Who bears the costs for the notary appointment for the commencement of operations?

These costs are borne by the purchaser and, with the exception of the KG and the GmbH. KG, we also do not appear in person as the seller at the notary appointment. We issue a power of attorney to a proxy of your choice for signing the purchase agreement and the registration in the commercial register.

Does a FORIS shelf company already have access to a bank account?

Yes, all our companies hold a bank account where the share capital is deposited. However, not all incorporation accounts are made to be transferred. 

In the case of accounts which are not transferable, we use what we call the order check procedure, whereby a check is issued to you for the amount of the share or nominal capital instead of a bank account.

How do I gain access to the company’s share capital after purchase?

Each of our companies receives a company account in the course of incorporation, however, not all company accounts are transferable after acquiring them. We work with two different models for transferring the share capital

1.) The first model is the account transfer model trading under the new company name of the shelf company. As a rule, the new managing directors of the company must go to the notary public of the respective bank after acquiring the company and identify    themselves as the new managing directors. They then have to undergo the bank’s own KYC process. If the legitimation is successful, the new managing director is given full access to the account and thus to the company’s share capital

2.) The second model is known as the order check procedure. For this purpose, an order check is issued for the amount of the company’s share capital by the founding director. This is sent to the certifying notary’s office as part of the company file in the course of acquisition and handed over to them there. The new managing director can now use the order check to order the money to be transferred from the founding bank to the company’s new bank account. For this purpose, however, a new company account should already have been opened at a bank of your choice beforehand. 

Furthermore, in both cases it is necessary for the new managing director to be already registered in the commercial register.

What is involved in transferring a bank account?

The account transfer model involves the new managing director reporting to the respective bank after acquiring the company for the purpose of legitimization and undergoing the bank’s own KYC process. This requires the new managing director to already be registered as such in the commercial register. All further steps will then be initiated by the respective bank. 

How does the order check procedure work?

In this case, the shelf company’s bank account is not available to be transferred after acquiring the company. Instead, an order check is issued for the amount of the company’s share capital, which can be cashed at your commercial bank after opening a new business account for the purpose of transferring the funds. Should there be any problems on the part of your commercial bank in cashing the check, please contact us. 

Can the legitimation process be unsuccessful when the bank account is transferred, so that the company ends up with no bank account at all?

Yes, such cases unfortunately do occur. The bank reserves the right to reject clients if the result of the bank’s own KYC process and the associated legitimisation is unsuccessful. Where the shareholder comes from can play a role here, as can the future business field of the company. In cases where you have any doubts, we recommend a company with an order cheque procedure. 

How do I apply for a tax number / VAT number (Ust-IdNr.)?

You can apply for the tax number online at ELSTER (short for Electronic tax return). Of course, this form can also be completed in person at your local tax office. If you need help completing the form, please contact your tax advisor.

Does the acquisition change the shelf company’s registration number?

No, the acquisition alone does not change the registration number. It only changes if the registered office of the company is relocated and thus the competent registry court changes. 

How does the purchase of a GmbH proceed?

If you have reserved a limited liability company, you will receive an email from FORIS with general samples and company specific information. 

In addition, you will find a questionnaire in the email, which you must complete and return/email to FORIS. The email also contains the payment details you need for transferring the purchase price to FORIS. 

The acquisition of a GmbH entails a transfer of company shares requiring certification therefore you will need a notary appointment at a notary’s office of your choice to complete the acquisition.

Once FORIS has received the purchase price and questionnaire, we arrange for the company documents to be sent to the notary by overnight courier. 

At the notary appointment, the notarised acquisition of your GmbH takes place. 

At the same time and in addition to the purchase and transfer agreement, the changes to the company are also notarially entered in the commercial register. Once the new managing director is registered in the commercial register, s/he can now apply for the share capital or the company bank account to be transferred. For this purpose, please contact your commercial bank. 

Is there a minimum number of shareholders required for a German GmbH (limited liability company, Gesellschaft mit beschränkter Haftung)?

A German corporation always requires at least one shareholder. There are no other restrictions or requirements for a maximum number of shareholders, but the presence of all the shareholders or their authorized representatives is required for the notarization. 

Furthermore, the preparation of the documents can be difficult due to an increased number of partners, as each one is named in the purchase contract together with their personal details. 

What advantages does a shelf company have versus an existing GmbH?

The advantages lie in risk avoidance. Risks are much easier to assess in the case of shelf companies which have been hitherto dormant. The situation is different with existing limited liability companies which were once operational. Here unpleasant inherited burdens can still cause costs to skyrocket unexpectedly even after acquiring the company.

What advantages does a GmbH have versus a UG?

The GmbH offers the advantage that it allows higher investments right at the beginning due to the required founding capital of 25,000 euros. Furthermore, there is no obligation to use the company profits to increase the capital.

Which documents does FORIS require from the buyer before acquiring a German GmbH?

In the run-up to acquiring a German GmbH, the buyer must undergo our own KYC process due to the money laundering restrictions. We do this by using a questionnaire to enquire about the acquirer(s), the new managing director(s), the notarising notary’s office, the power of attorney holder and the new company name as well as the future business address of the company. 

Furthermore, if the acquirers are a legal entity, we require an extract from the commercial register of the acquiring company with a clearly identifiable beneficial owner. In the event that the acquirer is a real person, we require a valid identification document from them. 

Can I increase the capital of a GmbH without further ado?

Yes. As soon as you are registered as a shareholder of the corporation in the commercial register and you have additionally seen to the legitimisation at the founding bank or opened a new corporate bank account, you are free to increase the capital of the corporation.

Does FORIS sell GmbHs with employee leasing?

No. FORIS principally does not sell companies with employee leasing please see the AÜG (Temporary Employment Act).

If, for example, you need a GmbH with temporary personnel leasing, then you can acquire the GmbH from us as a shelf company and apply for an employee leasing permit from the employment agency responsible for your federal state after purchasing the company and the commencement of operations. Further information on the topic of temporary employment can be found at the arbeitsagentur.de 

What is a Mini-GmbH?

The Mini-GmbH is officially called a Unternehmergesellschaft (UG), with limited liability (haftungsbeschränkt). It is an entrepreneurial company with limited liability and insufficient share capital similar to a German GmbH.

What are the advantages of an UG versus a GmbH?

The UG offers the advantage over a GmbH of being established with a small amount of capital namely 1 euro. However, after formation the partners commit the company to increasing the capital by the profit earned until the threshold of 25,000 euros has been reached thus fulfilling the minimum capital requirement for a GmbH. 

Once this has been achieved an automatic conversion into a GmbH takes place. Furthermore, a UG is only recommended if the costs for the company can be kept very low at the beginning. The FORIS shelf UGs are all founded with a share capital of 1,000 euros. 

How does the purchase of a UG work?

If you have reserved a UG, then you will promptly receive an email from FORIS with general samples and company specific information. You will also find a questionnaire attached with this email which you should complete and return to FORIS. 

In addition, you will also receive the payment details which you need for transferring the purchase price to FORIS. 

As acquiring a GmbH entails a transfer of company shares requiring certification, you will need a notary appointment at a notary’s office of your choice in order to complete the transaction process and acquisition. 

Once FORIS has received the purchase price and questionnaire, we arrange for the company documents to be sent to the notary by overnight courier. 

At the notary appointment, the notarised acquisition of your UG takes place. 

At the same time, in addition to the purchase and transfer agreement, the changes to the company are also notarially entered into the commercial register. Once the new managing director is registered in the commercial register, s/he can apply to transfer the company bank account. For this purpose, please contact your commercial bank. 

Can I increase the capital of an AG without further ado?

Yes. As soon as you are registered as a shareholder of the corporation and you have additionally seen to the legitimisation at the founding bank or opened a new corporate bank account, you are free to increase the capital of the corporation. 

How does the purchase of a public limited company work?

If you have reserved an AG then you will receive an email from FORIS with general samples and company specific information. 

In addition, you will also find a questionnaire attached with this email which you should complete and send or return by email to FORIS. You will also receive the payment details which you need for transferring the purchase price to FORIS. 

Even though the acquisition of a public limited company does not require a transfer of shares needing certification, you will still need a notary appointment at a notary’s office of your choice to complete the acquisition.

Once FORIS has received the purchase price and the questionnaire, we arrange for the company documents to be sent to the notary by overnight courier. 

At the notary appointment, the notarial entry of the changes to the company (company trading name, managing director and others) in the commercial register proceeds. Once the new managing director has been entered in the commercial register, s/he can now apply for the capital or the company bank account to be transferred. For this purpose, please contact your commercial bank. 

Contact - we are there for you
Your contact person
Doina Roman
Doina Roman Senior Consultant
Contact - we are there for you
Your contact person
Doina Roman
Doina Roman Senior Consultant