Companies which have been incorporated for several years (2, 3, 4, or more), but have carried out no business activities since the time of incorporation, are known as vintage companies. These companies are stored, like fine wines, so that once they have reached a certain maturity they will be able to begin operating.
There are a number of reasons for buying vintage companies. These include, for example, reasons of prestige, where the people operating the company buy a company which was incorporated earlier so as not to begin their business activities with a freshly incorporated company.
It may also be the case that the purchase of a company incorporated earlier is required for administrative reasons. Certain tenders and applications are only open to companies of a certain age (e.g. minimum three years old).
In addition to these reasons, vintage companies have an indisputable advantage over freshly incorporated companies in that they could have operated, signed contracts, acquired rights and assumed responsibilities from the date of incorporation.
The price of a vintage company is made up of several components, and is generally higher than the price of a freshly incorporated company.
Firstly, there is the fee for the original incorporation of the company; in addition, the annual maintenance fees (registered office and agent and annual tax) for each year of the company's existence must be paid - the person or company originally incorporating the company has already had to pay these each year, so obviously he must recover his expenses before he will sell on the company.
Finally, there is usually a maturity fee, which is generally a fixed annual amount for each year of the company's existence.
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