This morning I was talking to an old friend and client of mine who lives in Houston Texas. He is looking for a Shelf Corporation because
he had some issues with one of his corporations that we set up two years ago. Let me explain what happened.
A little over two years ago, when I was based in Houston Texas(Spring to be exact), I acquired a Shelf Corporation for my client and friend, Greg, using the steps outlines in Shelf Corp Magic. Everything was going great. The Shelf Corp was only $100, and he got credit within two weeks of transferring it into his name. We started with a few vendor accounts such as Conoco, Office Depot, Sears and Staples and then we got a Key Bank account, all in a matter of a couple weeks. Everything was going great but Greg called today to inform me of an issue.
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A couple months after we set up the Shelf Corporation, Greg realized that some of the accounts were closed. It started with his Conoco card, and then his Office Depot and BP cards were closed. What these cards have is common is that they are all CITI Bank backed business credit cards. When he called Kay Bank they wanted some utility bills from the Corporation to verify the validity of the corporation. After a week or so of dealing with Citi, and providing them with all the information that they needed, they decided that they will not be reopening the accounts. When things like this happens, I always advise clients to keep probing so we can learn more about the business credit process which will help us not repeat these mistakes again. This is something that Greg knew, so he kept calling and asking questions, until one underwriter decided to reveal the problem to him. She said that all of his cards were being used in Texas but the company was based in FL. Although he verified information over the phone when making some of the purchases, it was just a high risk situation so they chose not to continue offering Greg credit, but he will still have to repay what was spent on the cards, or it will be reported to his business credit files.
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I have delt with, and established many Shelf Corporations in various states, and I must say, this is the first time I have scene or heard this happen. This is an example of something that one can only learn from experience.
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So at this point Greg wants a Shelf Corporation to start building business credit again, but when we spoke he asked if I had any Texas corporations so that the provious issue will not happen again. I currently do not have any Texas corporations, but there is usually more than one solution to every problem. Through talking through the various issues and potential risks that this new corporation will have, he decided to go with one of my Wyoming Shelf Corporations with a clean file and which was never in default. We then decided that once the corporation is transferred, we will do a foreign filing in Texas for the Shelf Corp. This will save money on paying for a virtual office in Wyoming, as well we reduce the risk of having the cards closed by avoiding the issue that we previously mentioned.
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Now that we have found the solution to his problems time to get to work.
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Marc Augustine
Yeah, I agree. You should file for foreign registration when building credit on an out of state corps
Marc,
I have a 10 year old Corp that I purchased in NV that I have not used. You made the point in your posting about the WY corp not ever being in default. Why is that important?
Please contact me, Thanks
Good information. Like you mentioned, the only way to know about these details is to experience it. It’s good to know that there is a way to work around this major issue. Hope all goes well with the new corp.