Quick Summary
There is no definition of the term Shell Company in the Companies Act and it normally refers to a company without active business operation or significant assets, which in some cases are used for illegal purpose such as tax evasion, money laundering, obscuring ownership, Benami properties etc. This was stated by Union Minister of State for Corporate Affairs Shri Rao Inderjit Singh in a written reply to a question in Rajya Sabha today. The Minister further stated that the Special Task Force se
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FAQ :
A shell company typically refers to a company without active business operations or significant assets. While not always illegal, they can be used for purposes such as tax evasion, money laundering, or obscuring ownership.
Between 2018 and June 2021, the government identified and struck off a total of 238,223 shell companies.
A Special Task Force recommended using certain 'red flag' indicators as alerts for identifying shell companies. The government has also undertaken a special drive for their identification and striking off.
The regions with the highest numbers of struck-off shell companies between 2018 and June 2021 were Delhi (45,595) and Mumbai (52,869).
No, there is no specific definition of the term 'shell company' in the Companies Act.
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