some shell companies may have previously had operations that shrank due to unfavorable market conditions or company mismanagement. a shell corporation may also arise when a company's operations have been wound up, for example following a takeover, but the "shell" of the original company continues to exist. the term "shell corporation" does not describe the purpose of a corporate entity, but in general is more informative to classify an entity according to its role in a particular corporate structure; e.g. holding company, general partner, or a limited partner.