shell corporation

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shell corporation

Post by dalehileman » Sat Jul 16, 2005 12:19 am

The plot involved a shell corporation set up by real estate agents who bought a partial interest in a local title insurance and escrow agency...--Costoc Connection

The meaning of the expression is pretty obvious and I remember hearing it before, perhaps many times. Yet neither my Merriam Webster Collegiate nor Random House Unabridged lists "shell" as an adjective. How come

Is it because we are to make the assumption that any noun can also be used as adjective
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shell corporation

Post by Ken Greenwald » Sat Jul 16, 2005 2:34 am

Dale, If you’re not interested in a word's origin or meaning, maybe you shouldn’t have posted this question under ‘Word Origins and Meanings.’ Perhaps ‘Usage and Writing’ would have been a better choice. But other folks beside you - like me, for instance - who are unfamiliar with the expression, might like to know a little bit more about it.

SHELL may be short for SHELL GAME, and in that case it would be a non-standard word which would not show up in standard dictionaries as a noun or an adjective. However, if it comes from the sense of just being hollow, as a shell, then it is listed in that sense as an adjective in the American Heritage Dictionary. But from the following definition it is not clear to me from which sense it derives – they both seem to fit.

SHELL CORPORATION is defined in Barron's Finance & Investment Handbook as "a company that is incorporated but has no significant assets or operations. Such corporations may be formed to obtain financing prior to starting operations.... The term is also used of corporations set up by fraudulent operators as fronts to conceal tax evasion schemes."

SHELL GAME: 1) A game, usually involving gambling, in which a person hides a small object underneath one of three nutshells, thimbles, or cups, then shuffles them about on a flat surface while spectators try to guess the final location of the object. Also called thimblerig. 2) A fraud or deception perpetrated by shifting conspicuous things to hide something else.

I don't know what the rules are for changing nouns to adjectives, but it seems like in most cases you can (e.g. 'house fly,' 'porch light,' . . .) unless it leads to ambiguitiy (e.g. 'victim awareness,''poor relief,' editorial reply,' . . .), in which cases it doesn't appear to be advisable. But I'm not an expert on this subject and perhaps others can tell you more.
_________________

Ken – July 15, 2005
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shell corporation

Post by shelf.corporation » Sun Jan 20, 2008 2:12 am

this site gives some good definitions for shelf corporations and shell corporations: http://www.shelf-corp.com
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shell corporation

Post by Erik_Kowal » Sun Jan 20, 2008 10:41 am

Ken has already set out a good thumbnail definition of 'shell corporation'.

Wikipedia defines 'shelf corporation' thus:

A shelf corporation, also called an aged corporation, is a corporation that has had no activity. It was created and put on the "shelf" to age. This corporation is then later usually sold to someone who would prefer to have an aged corporation rather than a new one. A business entity that is created through a process other than incorporation (such as a limited liability company) is simply called a shelf company.
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shell corporation

Post by hsargent » Sun Jan 20, 2008 7:50 pm

A shell organization to me is empty of substance. It would not have to be negative!

We established a shell corporation to begin. We then found office space and began the recruitment and training process.

I've never run across a shelf-corporation unless it was a product of Lowe's!
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Signature: Harry Sargent

shell corporation

Post by JANE DOErell » Sun Jan 20, 2008 8:03 pm

I never heard of a "shelf-corporation" until today but there are many, perhaps hundreds of old mining corporations in the Western US that are just a file in a drawer until their holdings suddenly become worth something, usually because of an international shift in metal prices.
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shell corporation

Post by russcable » Mon Jan 21, 2008 5:17 pm

hsargent wrote: It would not have to be negative!

We established a shell corporation to begin. We then found office space and began the recruitment and training process.
You're right that it doesn't have to be negative, but your example creates the shell of a corporation and fills it in - a literal use. The idiomatic "shell corporation" is intended to be left empty, not merely empty at the moment.
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