Consider the following statements about Shell Companies and identify the correct one s 1 Shell Compa...........

Indian Economy Industry

Consider the following statements about Shell Companies and identify the correct one/s

1. Shell Companies are the companies defined in the Companies Act, 2013 as the companies having significant assets but very little or no Business operations.

2. The Ministry of Corporate Affairs has the authority to cancel the registration of a Shell Company involved in tax evasion and illegal activities.

3. Shell Companies also have legitimate uses like facilitating asset transfers, mergers, protecting trade secrets etc.

Select the correct answer using codes given below

1 and 2 only

2 and 3 only

1 and 3 only

All of the above

छोटे Courses बड़े Results

Master Industry

Prepare through Micro-courses

Try Now

Explanation:

- Statement 1: Shell companies are not specifically defined under the Companies Act, 2013. While they do often have little or no business operations, the Act does not provide a precise definition specifically about assets or the lack of business operations.

- Statement 2: The Ministry of Corporate Affairs (MCA) does have the authority to cancel the registration of companies, including shell companies, if they are involved in illegal activities such as tax evasion.

- Statement 3: Shell companies can indeed have legitimate uses such as facilitating mergers, asset transfers, or protecting trade secrets. They are not inherently illegal.

- Correct Option: 2 - 2 and 3 only.