Shell Company

Summary of Shell Company

A “paper”company, usually operated without employees. Normally an attorney or other local agent or management company performs the legal duties of the company on behalf of the stockholders. Shell companies often operate in tax-free or low- tax jurisdictions such as Bermuda, Liechtenstein, or the Cayman Islands. The shareholders may structure their business affairs or earnings so as to shift income to the shell company, thereby avoiding higher taxes in their own countries.

Shell companies are often known as brass plate companies, because it is common for the shell to have a name plate on the entrance into the managing agent's office.

(Main Author: William J. Miller)