Dummy Companies: Enterprise for generation of black money

The issues of generation of black money, its stashing abroad in tax havens and offshore financial centre's have attracted public attention in past few years in India. There are various illegal and legal permissible economic activities for the generation of black money. The study has made an attempt to assess the generation of black money through companies, particularly in terms of who form these companies, what are the motives of formation of these dummy companies. The results indicate that some companies are an important source for the generation of black money. Many businessmen andp oliticians are involved in this phenomenon, by which they are generating black money or convert their black money into white money. It is the safest means of generation of black money. Various companies are registered but they are either not paying their return or not involve in any business transactions or doing illegal activities such include money laundering, billing schemes, fictitious service schemes, bankruptcy fraud, tax evasion, and market manipulation. The estimates of black money is very high and increasing year by year, this also leads to the growth of parallel economy, which has been expanding very rapidly in India as well as in developing countries.