How to spot a shell or fake company in India

A "shell" company has a legal identity but little or no genuine operations — often used to move money, inflate invoices, or disappear after taking an advance. Most warning signs are visible in MCA and GST public records if you know what to look for.

1. Status and age red flags

• Struck Off / Under Striking Off / Dormant MCA status.
• A very new company claiming a long trading history.
• Cancelled or suspended GSTIN, or no GST registration at all for a business that should have one.

2. Filing and compliance gaps

• Lapsed GST filings — months of missing GSTR-1/GSTR-3B.
• An old or missing last AGM / balance-sheet date at the MCA.
• Flagged under income-tax 206AB (a non-filer).
• An inoperative PAN.

3. Director-network red flags

Shell companies often share directors. Watch for a director sitting on many companies, links to struck-off or amalgamated entities, recently disqualified DINs, or directors who joined just before a big order. Cross-directorship mapping is one of the strongest signals — see how to verify a supplier.

4. Financial structure red flags

• Thin paid-up capital relative to the order size or claimed turnover.
• A high declared cash-transaction percentage in GST data.
• Multiple open charges far exceeding the company's scale.
• A registered office that is a shared/virtual address used by dozens of companies.

5. The invoice itself

Finally, fraud often happens at the payment step even with a real company: a bank account that doesn't match the legal entity, pressure to pay a large advance quickly, or sudden changes to bank details mid-deal. Always re-verify bank details out-of-band.

Check all of it at once

SupplierProof scores these exact signals automatically. Paste a CIN or GSTIN and the report highlights struck-off links, lapsed filings, risky director networks and capital mismatches — so you don't have to cross-reference five portals by hand.

See all supplier-verification guides.