Shell Companies In India: Regulatory Failures, Financial Crimes, And The Quest For Transparency
- IJLLR Journal
- 3 days ago
- 2 min read
Dhruv Vashist, LL.B. (Hons.), Amity Law School, Noida
ABSTRACT
In contemporary times, shell companies have become an important subject matter in the realm of corporate and financial law. Shell companies have become an issue because of their nature that allows them to be a valid tool and a means of committing illegal actions simultaneously. In the context of India, the rise of shell companies has been closely connected with the liberalization of the country's economy, development in technology and evolution of the financial system. The present research paper focuses on the definition of shell companies, their regulation in India, and misuse of shell companies for committing unlawful activities.
The current study is based on the doctrinal and analytical methods for evaluating the relevant legislative measures (corporate and anti-money laundering laws) and the role of the relevant regulatory and investigative bodies in fighting against illegal use of shell companies. Furthermore, the research paper discusses the main difficulties in fighting against the misuse of shell companies. Comparative analysis will be conducted in order to identify the best practices in this sphere of law from the international point of view.
The research paper suggests that India has achieved much in regulating the activities of shell companies but still faces several challenges in implementing the existing legislation and cooperating internationally. Some of these issues include the lack of clarity, insufficient disclosure, poor use of new technologies and inadequate inter-agency cooperation.
It can be stated that shell companies should be regulated without limiting business operations in any way. The research paper presents some policy proposals for addressing the identified problems in practice.
Keywords: Shell Companies, Corporate Governance, Money Laundering, Beneficial Ownership, Financial Regulation, Corporate Fraud, Illicit Financial Flows
