Disadvantages of shelf companies

Disadvantages of a shelf company higher notary fees, more administration, formation costs, full payment of share capital

Now that we have discussed the advantages of a shelf company, let’s take a look at what the disadvantages of a shelf company actually are.

Disadvantages compared to the advantages

The only disadvantage of a shelf company is that it is more expensive, as more costs are incurred.

Notary costs

Because the company must first be founded and then a notary appointment is necessary again when it is sold to you, notary costs are more or less doubled.

Administration

Establishing and offering a shelf company also requires work for us. Working time, which also costs money. However, this working time would also be incurred by you in the context of a foundation. As we are probably much more efficient than someone setting up for the first time, this cost factor is probably even greater for you.

Formation expenses

In addition to the notary’s fees, you will also incur the following formation costs: Registration fee at the commercial register, fees for business registration, preparation of the opening balance sheet, bank charges for account management, possibly IHK fee.
Incidentally, we usually pay the commercial register fee in person at the cash desk at the local court, as waiting for the payment request and a bank transfer means another two-week delay. The administration is not yet digitalized.

Share capital fully available

All these expenses are irrelevant for the share capital of your shelf company. Regardless of the costs incurred, we will replenish the share capital in the company’s bank account in full at the time of sale.

Cost disadvantage of a shelf company

So please bear all these expenses and costs in mind when considering the surcharge for a shelf company. You would also incur some of these costs if you were to set up the company yourself.

So when you buy a shelf company, you are trading time and flexibility for slightly higher costs. And time is also money. In these fast-moving times, it is becoming increasingly important to be able to react quickly and be fast on the market.

Full payment of the entire share capital

When founding a company in the form of a GmbH, you have the option of paying in only half of the share capital. However, you as the founding company are still obliged to make additional contributions. This means that if the company needs the capital, you must pay it in up to the amount of the share capital. You are also liable if the GmbH becomes insolvent. As the founder of a shelf company cannot pass on this liability and obligation to make additional contributions, the capital of shelf companies is always paid up in full.

Summary of disadvantages of shelf companies

The disadvantages of a shelf company can be summarized as follows: It simply costs a little more than the mere formation, but it is available much more quickly and time is money.