How To Deal Shell Companies Why in news? Recently union government has initiated action against more than two lakh shell companies as part of Operation Clean Money. What is operation clean money? Operation Clean Money was initiated by Income Tax Department (ITD). Initial phase of the operation involved-verification of large cash deposits made after demonetization. Second phase of the operation involves is identification of high risk persons for detailed investigations by the ITD. What are shell companies? Shell companies are typically corporate entities which do not have any active business operations or significant assets in their possession. The government views them with suspicion as some of them could be used for money laundering, tax evasion and other illegal activities. Some laws helpin curbing illegal activities to target shell companies are Benami Transaction (Prohibition) Amendment Act 2016 The Prevention of Money Laundering Act 2002 The Companies Act,
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