A shell company or shell corporation is a company that doesn’t have active business operations in other words it is a company that doesn’t make money and doesn’t provide clients and customers with services or products. The name itself doesn’t describe the purpose of business entity but it classify it according to its role in a particular corporate structure. Shell companies can be formed in more than one way and not all shell companies have the same purpose.
To become a shell company interested party must file with the SEC while some other shell companies have previously had operations that shrunk that shrunk due to unfavorable market conditions or other reasons. Also any start-up company that register with SEC is technically a shell company. This type of corporation is legal but it can sometimes be used in illegitimate way. Legal use of shell company has many benefits:
Shell companies can be used to hold stock or intangible assets of another business. New start-ups can use them to store the money it is raising before official launch.
Companies preparing for a merger or an acquisition can save assets this way and simplify matters.
Shell companies can be utilized for safety reasons if firm is for example working in unsafe region or if business doesn’t want to be publicly associated with company that has bad reputation they can realize cooperation through a shell company.
Private companies use this type of corporation to perform reverse merger in order to evade traditional IPO process. This way private company can become public in shorter span of time, using less energy and money in the process.
In order to minimize corporate taxes many large companies like Apple and Microsoft use shell companies abroad. This practice is legal in Unites states and it permits US companies to use shell companies for offshore work.
Shell companies can also be used in estate planning process or even in a process of divorce to shield his or her assets or earnings.
Mina Mar Group has invested significant resources and capital to develop and maintain an inventory of clean public shells for a variety of stock markets and company sizes. We have done the extensive work of “cleaning” our public shells thereby reducing all associated risks. We provide these public shells to our IPO clients and we also sell our public shells to qualified and interested parties.
