A shell company is a normally a company which neither carries on any active business operations nor owns significant assets. They are normally created for the purpose of laundering unaccounted or illicit money to evade taxes through fake financial transactions. Generally, these companies hold assets only on paper and not in reality. The directors and shareholders of these shell companies are mere “name-lenders”, they sign on the documents for a fixed fee. These companies conduct almost no economic activity. Though not all shell companies are illegal, but the Companies Act does not provide any concrete definition about shell companies.