Are Shelf Corporations Legitimate
Shelf corporations are formed for the purpose of being sold off. Unfortunately, shelf corporations that build great credit for themselves often (since 2016) have their entire business credit scores wiped away when they transfer ownership. The credit bureaus are aware of this ownership change because the notification of ownership change is a legal requirement by the Secretary of State. If this is not done, it can result in potential criminal prosecution should the company go through a bankruptcy and the owners are found to be incorrectly identified with the state.
The credit bureaus are aware of the corporate credit building industry and they combat this issue by blacklisting known shelf corporations. These entities have multiple red flags the bureaus look for:
A credit history that shows only 1 purchase of $50-$100 from a reporting vendor
No creditors have reported in the last 6+ months of any recent purchases
ANY reporting vendors are known credit building corporations that only exist to help build credit
New change of ownership
No financial reports submitted in the last 2+ years
No company activity or website history found in archive.org
Shelf corporations used to be a valid credit building method; however, for these reasons and more, shelf corporations for building corporate credit is now a DEAD METHOD. Even if one is able to build corporate credit with a shelf corporation, if at any point a manual review occurs on the report - an agent who red flags the company under the suspicion of being a "shelf corporation" has killed the entity's ability to ever get corporate credit again (few legitimate businesses ever make it out of this, let alone a shelf corporation).
NOTE: A corporation that is created by one's self, is left to sit for 1-2 years and does not change owner can be used for building corporate credit; however, the entity should still have at least 1 purchase every 3-6 months from a reporting creditor to avoid being red flagged by the bureaus.