Editing Shell corporation (section)

==Background==
Some shell companies may have previously had operations that shrank due to unfavorable market conditions or company mismanagement. A shell corporation may also arise when a company's operations have been wound up, for example following a [[takeover]], but the "shell" of the original company continues to exist.<ref>{{cite web|title=Webster's New World Finance and Investment Dictionary|year=2010|url=http://www.yourdictionary.com/shell-corporation#RuufASp5jLfeKqvJ.99|access-date=1 November 2015|archive-date=8 April 2016|archive-url=https://web.archive.org/web/20160408015947/http://www.yourdictionary.com/shell-corporation#RuufASp5jLfeKqvJ.99|url-status=dead}}</ref> The term "shell corporation" does not describe the purpose of a corporate entity, but in general is more informative to classify an entity according to its role in a particular corporate structure; e.g. [[holding company]], [[general partner]], or [[limited partner]].

Shell companies are a main component of the [[black market|underground economy]], especially those based in [[tax haven]]s. They may also be known as ''[[international business company|international business companies]]'', ''personal [[Investment company|investment companies]]'', ''[[front organization|front companies]]'', or ''"[[Commercial mail receiving agency|mailbox]]" companies''. While these terms are generally used interchangeably in practice, their meanings are not the same and each term is generated to refer to a different theme of illegality.<ref name="auto"/> Shell companies can also be used for tax avoidance. A classic [[tax avoidance]] operation may utilize favorable [[transfer pricing]] among multiple corporate entities to lower tax liability in a certain country; e.g. [[Double Irish arrangement]].

A [[special purpose entity]], used often in the context of a larger corporate structure, may be formed to achieve a specific goal, such as to create [[anonymity]].

According to a 2013 experimental study where the researchers requested anonymous incorporation in violation of international law, one in four corporate service providers offered to provide services in violation of international law.<ref>{{Cite journal|last1=Findley|first1=Michael G.|last2=Nielson|first2=Daniel L.|last3=Sharman|first3=J.C.|date=2013|title=Using Field Experiments in International Relations: A Randomized Study of Anonymous Incorporation 1|journal=International Organization|language=en|volume=67|issue=4|pages=657–693|doi=10.1017/S0020818313000271|issn=0020-8183|hdl=10072/56156|s2cid=153353492|hdl-access=free}}</ref>