Companies or Corporations without active business operations or significant assets, created to evade taxes are termed as shell companies. They are formed to obtain funding before initiating business operations. Please refer to the laws of your respective countries to know if they are legal.

Start-up companies that require funding before starting operations, corporations interested in acquisitions, establishments planning to go public, prefer shell companies.

Shelf companies are business entities with no significant assets or ongoing activities. A shell corporation is formed and held onto or placed on the shelf for several years to age, during which time it gains some credit history, file basic tax returns, open bank accounts for businesses and other such actions to demonstrate. Once established, these companies are sold to investors who wish to incorporate quickly or those who are looking for bank loans but unable to qualify since they lack credit history. A readily available shell company, ageing on the shelf, is termed as shelf companies.

A shell company aged for a while before being sold is a shelf company. They are similar. Both Shell & Shelf corporations do not have physical presence except for a mailing address. They do not have employees and produce little, economic value. They can be created domestically or in a foreign country. Shell & shelf companies are formed to handle transactions. Ownership details are not disclosed, which makes it popular in the offshore market.

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