Incorporating with fraudulent intentions: A study of various differentiating attributes of shell companies in India

The objective of this research paper is to identify specific attributes associated with the shell companies, so that the frauds committed by misuse of the corporate vehicle are curbed. The presence of an identified attribute increases the fraud risk the company poses to the economic system. The efficient allocation of limited investigative resources may accordingly be made by the regulator.

The research was designed as a case study involving documentary evidence corroborated by archival records and semi‐structured interview. The paper discusses the identification of attributes associated with shell companies and suggests recommendations for corporate regulatory machinery in India.

The research paper has identified a few attributes associated with the shell companies. These attributes are directly related to the fraud risk an incorporated entity may pose to the economic system. Limited resources may be efficiently deployed on the basis of the risk an entity poses to the system.

The findings of the research are yet to be verified and authenticated by an independent study. However, the findings have a wider implication with respect to more efficient deployment of investigative resources dependent on the risk parameters.

The research paper is a pioneer effort in the field of frauds by misuse of a corporate vehicle.