What are shell companies?

What are shell companies?

A incorporated company that does not has any real assets or economic value & no operations.

√ They are not likely to have any physical presence. May exist only on paper or for nameshake.

√ They can be legitimate or illegitimate.

Why are shell companies becoming ubiquitous?

√ can be used as a tool for money laundering.

√ can be used for evading taxes.

√ Terror Funding & other illegal trades: shell companies can be used to route money generated from illegal activities to formal financial institutions.

√ achieve anonymity.

√ can be used to transfer assets from one company to new company without the transfer of liabilities of the former company.

Can shell companies be legitimate?

Yes. If a company is set up but it has not started functioning officially.

Other usage: if a company has a negative reputation in the market then it can create a shell company & do operations by its name. In the market it will be known with the name of the shell company.

With Great Love,

Er. Amit Yadav



Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s