Editing Shell corporation (section)

==Abuse==
Shell companies have been used to commit fraud, by creating an empty shell company with a name similar to existing real companies, then running up the price of the empty shell and suddenly selling it ([[pump and dump]]).

There are also shell companies that were created for the purpose of owning assets (including tangibles, such as a real estate for property development, and intangibles, such as [[royalties]] or [[copyrights]]) and receiving income. The reasons behind creating such a shell company may include protection against litigation and/or tax benefits (some expenses that would not be deductible for an individual may be deductible for a corporation). Sometimes, shell companies are used for [[tax evasion]] or [[tax avoidance]].<ref name=Shaxson-2011-01-06>[[Nicholas Shaxson]], ''[[Treasure Islands: Tax Havens and the Men who Stole the World]],'' [[Random House]], January 2011</ref>

=== Offshore Leaks ===
{{Main|Offshore Leaks}}
In 2013 the [[International Consortium of Investigative Journalists]] published a report called "Offshore Leaks" with information about the use and owners of 130,000 shell companies. Many of the shell companies belonged to politicians and celebrities from around the world and were being used for tax evasion and hiding financial assets.<ref>{{Cite web|url=https://offshoreleaks.icij.org/|title=ICIJ Offshore Leaks Database|website=offshoreleaks.icij.org|publisher=International Consortium of Investigative Journalists (ICIJ)|access-date=2018-06-10}}</ref>

=== Panama Papers ===
{{Main|Panama Papers}}
In 2016 a leak of 11.5 million documents to the German newspaper ''[[Süddeutsche Zeitung]]'' revealed information about owners of more than 214,000 shell companies administered by the law firm [[Mossack Fonseca]] in Panama. The shell companies were used by politicians, businessmen, autocrats, and terrorists from around the world for tax evasion and other illegal activities.<ref name=":0" />

===India===
After India's decision to [[2016 Indian banknote demonetisation|demonetise ₹500 and ₹1000 rupee notes]] on 8 November 2016,<ref>{{cite news|url=https://www.bbc.com/news/business-37906742|title=India scraps 500 and 1,000 rupee bank notes overnight|work=BBC News |date=8 November 2016|access-date=8 November 2016}}</ref><ref name="etBlackMonryCrackdown">{{cite web |url=http://economictimes.indiatimes.com/news/politics-and-nation/in-an-attempt-to-curb-black-money-pm-narendra-modi-declares-rs-500-1000-notes-to-be-void-from-midnight/articleshow/55315932.cms |title=In an attempt to curb black money, PM Narendra Modi declares Rs 500, 1000 notes to be invalid |date=9 November 2016 |access-date=9 November 2016 |work=news |publisher=The Economic Times }}</ref><ref name="India Today2">{{cite web|url=http://indiatoday.intoday.in/story/live-pm-narendra-modi-addresses-nation/1/805755.html|title=Here is what PM Modi said about the new Rs 500, Rs 2000 notes and black money|date=8 November 2016|access-date=9 November 2016|work=[[India Today]]}}</ref> 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 2,000 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.<ref>{{cite news|title=Cracking down on black money, scrutiny of shell firms stepped up|url=http://timesofindia.indiatimes.com/business/india-business/cracking-down-on-black-money-scrutiny-of-shell-firms-stepped-up/articleshow/60086235.cms|access-date=16 August 2017|url-status=dead|archive-url=https://web.archive.org/web/20170817000336/http://timesofindia.indiatimes.com/business/india-business/cracking-down-on-black-money-scrutiny-of-shell-firms-stepped-up/articleshow/60086235.cms|archive-date=17 August 2017|df=dmy-all}}</ref>