General Meaning of Shell Company:
The Companies Act does not define “Shell Company” and no other piece of Legislation provides for the guidance on what does it constitutes; however, the general definition is understood as:
“A shell company is a company that exists only on papers, without active business operations or significant assets and has no office or employees. These types of companies are not necessarily be illegal, but they are sometimes used illegitimately, such as to disguise business ownership from law enforcement or the public. Legitimate reasons for a shell company include such things as a start up using the business entity as a vehicle to raise, funds, conduct a hostile takeover or to go public.”