Mr. Amit Santosh Solanki, B.Com, MBA, LLB, LLM Pursuing, DES’s Shri. Navalmal Firodia Law College, Pune
ABSTRACT
Unveiling the Web of Deceit: Exploring the Pervasive Presence of Fake Shell Companies in India's Economic Landscape. There is no specific history of Shell Company. It is a modern times financial fraud which companies are doing under legal framework and enjoying the loopholes of Indian Law. Due to the operations of such a shell companies, there is an impact & loss in government revenue further hampers public welfare initiatives & economic development. The “Shell Company” is not defined in any law or acts of India. However there are Acts like Benami Transaction (Prohibition) Amendment Act 2016, The Prevention of Money Laundering Act 2002, The Companies Act, 2013, which keep an eye & watch on the financial transaction of the Companies. If the authorities found any discrepancy or fraudulent nature transaction they further investigate and treat the company as a shell company. A Shell Company is company legally registered & incorporated according to Company Law. Their existence is legal however they do not hold any assets & any employees. In short the company has the legal existence only on Paper. One can also call such company as Ghost Company or Shadow Company. It is impossible to identify the Shell Company. It is also difficult to identify that whether it is opened for a Legal Purpose or for any Illegal purpose. The frauds like converting the black money to white, Money Laundering, Tax evasion are done with such Shell Companies. The shell company is mainly registered with purpose of doing some illegal activities. The Government authorities should define the Shell Company. There should be strict compliances which need to be followed by all companies. Introduce more precise & strict punishments under company law. The researcher has undertaken the topic to study & analyse the structure of the Shell Companies and its impact on Economic Growth of India. Tackling this issue is not only crucial for safeguarding the integrity of the India’s economic ecosystem.
Keywords: Financial Frauds, Ghost Company, Illegal Purpose, Money Laundering, Shell Company.
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