SHELL COMPANY

About:

• The term “Shell Company” is undefined in the Companies Act, 2013.
  
  
• But generally, these are seen as bogus entities that do not produce anything but are used as a channel to evade tax.
  
  
• Reasons for setting a shell company:
  • These types of corporations are not all necessarily illegal, but they are sometimes used illegitimately, such as to disguise business ownership from law enforcement or the public.
    
    
  • Legitimate reasons for a shell corporation include such things as a startup using the business entity as a vehicle to raise, funds, conduct a hostile takeover or to go public.