shell entity
- noun
- /ʃɛl ˈɛntɪti/
- Specialized
:
entidad ficticia
- Investors should be cautious of shell entities that lack transparency in their operations.
Examples
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Many businesses use shell entities to reduce their tax liabilities.
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The investigation revealed that several shell entities were involved in money laundering schemes.
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It is easy to establish shell entities on paper.
Academic text (2017)
Synonyms
7
7.4
A company that exists only on paper and has no real business used to hide ownership or move money
How Legitimate
Surface Forms
Morphology
shell + entity
A learner who knows 'shell' as an empty or hollow covering and 'entity' as a thing that exists can plausibly infer that a 'shell entity' is an entity with no real substance. However, the specialised financial/legal sense (a company existing only on paper used for asset holding or avoidance) is jargon-like and not fully predictable from the parts at B1, so prior exposure is usually required.
Etymology
Shell entity comes from the image of a shell, an empty cover, and entity, which means a company. Because these firms exist only 'on paper' and have 'no real activity', they are like empty shells, so the term now means a company with no real business.