Established in the year 2016, we are an emerging chartered accountancy firm based in Bengaluru rendering comprehensive professional services which include audit, management consultancy, tax consultancy, accounting services and secretarial services.

Quote of the Day: "Greatness comes by doing a few small and smart things each and every day... it comes from taking little steps, consistently"

Tuesday, 19 September 2017

Understanding Shell Companies

What is a Shell Company?
There is no clear definition of what shell company is in the Companies Act, or any other Act. But typically, shell companies include multiple layers of companies that have been created for the purpose of diverting money or for money laundering. Most shell companies do not manufacture any product or deal in any product or render any service.
They are mostly used to make financial transactions. Generally, these companies hold assets only on paper and not in reality. These companies conduct almost no economic activity.
Indian Scenario
After Prime Minister Narendra Modi's decision to demonetise ₹500 and ₹1000 rupee notes on 8th November 2016, various authorities noticed a surge in shell companies depositing cash in banks, possibly in an attempt to hide the real owner of the wealth. In response, in July 2017, the authorities ordered nearly 2 lakh shell companies to be shut down while Securities and Exchange Board of India (SEBI) imposed trading restrictions on 162 listed entities as shell companies. A high-level task force found that hundreds of shell companies were registered in a few buildings in Kolkata. Many of those were found to be locked, with their padlocks coated in dust and many others which had office space the size of cubicles.
What actions can be initiated against shell companies?
Companies can be removed from the rolls of the Ministry of Corporate Affairs by two means: strike off by Registrar of Companies (RoC) — (Section 248 (1) of the Companies Act, 2013) and voluntary strike off — (Section 248 (2) of the Companies Act, 2013). Voluntary closure can be done with the approval of the board and shareholders and the firm should have nil liabilities.
However, not all shell companies may be money laundering vehicles. There are many shell companies that work within legal limits and do not have financial irregularities. For example, a company may separate its HR function into another company altogether. The second one is a legal entity, which operates like any other company. If you are an equity investor, it is better to stay away from investing in shell companies that have financial irregularities. Conduct proper due diligence of companies that you have invested in, and try to research their operations, businesses and financials.

For Hassle free RoC Compliances contact us at 9900397777/


  1. هل تقلق باستمرار أن لديك مشاكل مع قضيبك؟ لا تقلقوا يا أصدقائي الأعزاء أنصحك أن تحاول الذهاب إلى هذا المكان انظر هنا ، بما أنه هنا حيث أنني دائما أستطيع حل مشاكل من هذا النوع

  2. Great share!

    Loved all that you shared, and you are right, one cannot deny the power of Google. I simply love it and am part of a number of
    communities too. The point you mention in your post sand blasting machine manufacturer in India that are very useful for me. I understand the way of the attractive to the customer with the products.

    Keep it works and share with us your latest information. For more Information or any help then visit now at Sand Blasting Machine, Shot Blasting Machine, Sand Blasting Machine for Sale, Sand Blasting Machine Manufacturer, and Small Sand Blasting Machine.

    They are similar to small communities that you own - check them out if you haven't already.It's all got a lot better than before!t.

    Thanks for sharing. Have a nice week ahead.

    Visit at :

    Also Check
    Portable Sand Blasting Machine
    Portable Shot Blasting Machine
    Shot Blasting Machine
    Portable Grit Blasting Machine
    Grit Blasting Machine

    Purnima Sharma.