Existing companies are indeed advantageous to buy. Since they have already existed on the market for some time, ready-made companies are suitable investments. Before purchasing an Estonian company, every entrepreneur needs to be aware of nuances and familiarise himself with the company’s background to make sure everything required has been completed.
We want to cover these aspects along with the advantages of obtaining an existing company. But let’s go through basics first.
Characteristics
Ready-made companies are inactive corporate organisations that have passed state registration and have all the necessary details to implement their activities.
Be aware that ready-made companies do not have a VAT number and bank account as all corporate accounts must be closed by their previous owners. Shelf companies do not have any debts. Therefore, before purchasing a ready-made/shelf company, the potential buyer will be provided with all relevant documents confirming the company’s history and that the current company has no debts or financial obligations.
However, an existing company has a registration number, and, therefore, it allows a buyer to start doing business immediately. Moreover, ready-made companies have filled annual reports for the past year.
Another great addition — the possibility to change the name of the company during the re-registration.
Accordingly, ready-made companies must have a transparent history; in that way, purchasing a ready-made/shelf company should be a balanced decision to protect you from unreasonable risks.
Still, LKS Consult OÜ kindly notes that despite all the facts mentioned before, the purchase of a ready-made/shelf company does not simplify the paperwork, the process of obtaining a loan or opening an account with an Estonian bank. The time spent on re-registering a ready-made business will not differ from the time of setting up a company from scratch.
Advantages
Along with legal nuances, the process of buying a shelf company results in good additions.
Company with a history
A company with history will add credibility to your business. The number of years that the company has been on the market can provide advantages in the business projects you carry out. Some government agencies and financial institutions insist that a firm be registered for a certain period before tenders are allowed. If the company’s turnover is an important criterion, then we are happy to offer turnkey solutions.
Reputation
Besides, it is easier for the owners of a re-registered ready-made/shelf company to attract investments, since companies with history and turnover seem to be a more reliable investment. Also, building business relationships with banking institutions and suppliers usually comes first when buying a company of this type. The established reputation of an enterprise is undoubtedly essential when concluding deals, searching for new partners, and can also influence the decisions of potential investors or partners.
Trustworthiness
A ready-made/shelf company with a history in the business register will contribute to a more professional image and, therefore, appear worthy of service providers’ trust. According to research, clients prefer companies that can demonstrate longevity because they seem to be credible and instil confidence that the company owners have experience in the relevant field. A ready-made company will give the impression that it has existed for a long time and will give the client confidence that they can use your services.
All in all, Estonia is favourable place for doing business, and no matter how you decide to start your business — by obtaining a ready-made company, we are here to help.