What is an example of a shell company?

An example of a shell company could be an LLC formed by an entrepreneur planning to launch a startup. The entrepreneur files the paperwork to create the LLC, and then uses it simply to store funds until the startup launches, rather than have the LLC engage in any business itself.

What is a legal use of a shell corporation?

An example of a legal use of a shell corporation could be when a company interacts financially with another company. However, if "Company A" does not want to be associated with "Company B," as a result of "Company B" having a poor reputation, they can create a shell corporation through which the transaction can be disguised.

What is a shell corporation?

This is a gray area of tax evasion where people funnel earnings through shell companies in such a way that it isn't counted toward personal income . A shell corporation is a corporation without active business operations or significant assets.