Shell Corporation

AAA

DEFINITION of 'Shell Corporation'

A corporation without active business operations or significant assets. Shell corporations are not necessarily illegal or illegitimate, as they often serve an important for potential startups. Additionally, shell corporations can act as a tax avoidance for legitimate businesses.

INVESTOPEDIA EXPLAINS 'Shell Corporation'

Shell corporations are often formed before commencing operations to obtain financing. Sometimes, they may be used as a front in tax evasion. Shell corporations however are legal entities in most countries, although they have been known to be used in black or gray market activities. They should not be confused with dummy corporations however, as those are created specifically for the purposes of illegal activity.

RELATED TERMS
  1. Actual Owner

    A person or entity that receives the benefit of ownership. Being ...
  2. Capital Tax

    A tax on a corporation's taxable capital, comprising capital ...
  3. Corporation

    A legal entity that is separate and distinct from its owners. ...
  4. Audit

    1. An unbiased examination and evaluation of the financial statements ...
  5. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  6. Tax Evasion

    An illegal practice where a person, organization or corporation ...
Related Articles
  1. Handcuffs And Smoking Guns: The Criminal ...
    Options & Futures

    Handcuffs And Smoking Guns: The Criminal ...

  2. How To Invest In Private Equity
    Mutual Funds & ETFs

    How To Invest In Private Equity

  3. Pros And Cons Of Offshore Investing
    Personal Finance

    Pros And Cons Of Offshore Investing

  4. The Ghouls And Monsters On Wall Street
    Retirement

    The Ghouls And Monsters On Wall Street

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center