In this article, we’re going to walk you through how to buy dormant companies in the US.
We’ll also share the pros and cons of buying an existing company compared to setting up a new company, including banking options.
That said, it’s important to point out that buying a dormant company will not necessarily help you with banking in the USA, specifically opening a US business bank account for a non-resident.
Feel free to jump ahead to the areas most relevant to you by using the table of contents below.
Table of Contents
- How to Buy Dormant Companies in the US?
- Why Would You Buy a Dormant Company?
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
How to Buy Dormant Companies in the US?
To buy dormant companies in the US, you will need to contact a registered agent that offers this service. In most cases, a registered agent will have a portfolio of companies in various states, of varying ages, and for a wide range of prices.
That said, the reason that a dormant company is being pursued will likely impact the variables chosen. For example, if an aged company is required to qualify for a tender, then the specific age required will narrow down the options.
Alternatively, if clear involvement in a specific industry is desired, then choosing a company with an appropriate name may be the path chosen.
Here are a few other factors you may want to consider that can influence whether a company meets your requirements or not:
- Certificate of Good Standing
- Employer Identification Number (rare)
- Existing credit history (unlikely)
- Existing assets and/or liabilities (rare)
- Ongoing registered agent fees
- Ongoing registered address fees
- Desired state reputation
- State filing requirements
- State taxes and fees
- Public vs private company registry
Now, if you’re looking to register an LLC as a resident, you might want to consider if you should be your own registered agent for an LLC, which we discuss in our free guide linked here.
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Why Would You Buy a Dormant Company?
There are a number of reasons why you would buy a dormant company, ranging from qualifying for tenders, speed of registration, obtaining a specific name, reducing the administrative burden to register a company, and more.
That said, regarding US companies, there are limited benefits regarding registration speed since most company registration can be completed within 24 to 72 hours, depending on the state.
Services of a Dormant Company
Dormant companies are typically purchased because they offer specific benefits, including:
- Immediate availability
- Acquire a company with a filing history
- Easily meet contractual requirements
That said, a dormant company cannot assist the new owner with acquiring financing, establishing a credit history, or (in most cases) opening bank accounts. Instead, the new owner of the company will need to complete each of these steps.
In fact, opening a bank account for a newly established US company may be easier than doing so for previously dormant companies in the US.
Individuals who are looking to form and register a US LLC might want to consider the factors on why you should not form a US LLC in Wyoming, which you can access by clicking the link here.
Frequently Asked Questions
Below are three of the most common questions that we receive from people looking at how to buy dormant companies in US. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Can You Buy a Dormant Company?
Yes, you can buy a dormant company in the US. In fact, dormant companies are available in many states and offer various benefits. However, dormant companies offer limited benefits to newly incorporated US companies, given the speed at which new companies can be formed in the US.
Is a Dormant Company Legal?
Yes, a dormant company is legal. In most cases, dormant companies refer to entities that have been registered, maintained, and never used for commercial purposes. These entities are provided as a faster alternative to registering a new company. In most cases, the same registered agent you would consider when incorporating a new company will also sell dormant companies.
What Is a Dormant Company USA?
A dormant company in the USA is a registered entity that has been kept in good standing for a period of time. In most cases, these businesses do not have any business history, EIN, credit history, or bank accounts. Instead, they are shelf companies available for individuals to buy and start using immediately for their purposes.
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