Why would someone want to buy a shelf company instead of forming a new one?

Obviously, it is a question of urgency. The urgency can arise for a number of reasons. Typically –

• You need to submit a tender or a quotation and the customer insists on dealing with a company rather than an individual
• You want to buy a property in a company owned by a trust and the offer to purchase must be submitted quickly or you’ll lose the deal
• You want to buy a business as a going concern and have the deal zero rated for VAT
• You’re starting a new business and want to get going now, not in 2 to 3 weeks time.
• You read that Harbour and Associates will give you a B-BBEE certificate, Tax Clearance and even change the shelf company name all for free (except that you have to pay the R300 CIPC fees for the name change) and they’ll let you use their office as your registered office address for the rest of the calendar year at no charge or they will change the registered address of the company at no charge. So why wait?

Those are the main reasons, but we also get some strange ones. Often, I’ll advise the person against the purchase if their reasoning is faulty. One lady wanted to buy a VAT registered shelf company (R18 000) after I’d chatted to her for about an hour on our help line, I ended up selling her exactly nothing which was exactly what she needed. She asked me how we make money that way and I replied “Well, people do tend to come back” and it’s true, sometimes one or two years later even, but yes, they come back.