Shell Companies
Fake companies created to hide the true ownership or source of money, often used to obscure illegal or unethical financial flows.
Legal entities created primarily to conceal the identity of their true owners or the origin of funds flowing through them. Shell companies typically have minimal operations, assets, or employees, and exist mainly on paper. They are commonly used in money laundering, tax evasion, sanctions evasion, and hiding the sources of political donations or bribes.
What this means in real life
A wealthy individual buys a luxury apartment through a company registered in another country with no visible business operations—the company exists only on paper to hide their identity from public records and competitors.
What it isn’t
Not simply a small business or startup with few employees. A shell company is deliberately designed to have minimal real operations; a struggling startup still conducts actual business, employs people, and generates revenue—it's just small.
Commonly misused online
Often used as a catch-all insult for any private company or offshore entity, even legitimate ones. Social media conflates shell companies with all corporate secrecy, ignoring that many lawful businesses use similar structures for privacy or tax efficiency.