New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    The term shell company sometimes seen in news, it

    refers to
    A A company having active business operations in the country Correct Answer Incorrect Answer
    B A company in which people contribute on regular interval and earn on allocation basis Correct Answer Incorrect Answer
    C A company without active business operations and used to disguise business ownership from law enforcement or the public. Correct Answer Incorrect Answer
    D Company aims to promote the habits of thrift and saving amongst its members. Correct Answer Incorrect Answer

    Solution

    • Option C is correct: A shell corporation is a corporation without active business operations or significant assets. These types of corporations are not all necessarily illegal, but they are sometimes used illegitimately, such as to disguise business ownership from law enforcement or the public. Legitimate reasons for a shell corporation include such things as a startup using the business entity as a vehicle to raise funds, conduct a hostile takeover or to go public.

    Practice Next

    Relevant for Exams: