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In News
- The Serious Fraud Investigation Office (SFIO) has arrested a man who had masterminded the incorporation of a large number of shell companies linked to China.
What is a Shell Company?
- It is a corporate entity without active business operations or significant assets & they are not illegal.
- They are deliberate financial arrangements created to either avoid taxes or even promote startups. Earlier, generally, Shell companies were registered in tax havens, where there is nil or low tax.
- The Companies Act, 2013 does not define the term Shell Company. However, the Organization for Economic Cooperation and Development (OECD) defines a Shell Company as a company which is formally registered or otherwise legally organized in an economy but which does not conduct any operation in that economy other than in a pass through capacity.
Serious Fraud Investigation Office (SFIO)
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Source: IE
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