According to Ministry of Corporate Affairs data derived from Prime Database, 147,247 new companies were formed during the financial year 2020–21 during the epidemic, a 43% rise from the financial year before. When compared to a 2% on-year decline in the number of new companies formed in FY19–20, the gain is striking.

The increase in new company formations was driven by industries whose operations found relevance during the lockdown, including health & social work, agriculture, education, wholesale trade, retail trade, recreation, and sewage & sanitation.

 The number of health and social work companies being incorporated increased by more than six times. 11,037 new companies were formed in the agri (and allied) sector, more than twice as many as the previous year. In the field of education, the number of new businesses established tripled, while in the field of food and drinks, it increased by 68%. It increased five-fold in the case of leisure and sports, with a strong possibility that they will have internet business strategies.

It’s interesting to note that the number of businesses established in the sewage, garbage disposal, and sanitation industry has multiplied by 10. Both in the wholesale and retail sectors, the number increased by almost 30%.

In contrast, there has been a decrease in the formation of new businesses in the financial intermediation, hotels & restaurants, and the sectors that were most negatively impacted by the pandemic: transportation activities & travel agencies.

The fact that two-thirds of the new businesses were founded between July 2020 and December 2020 suggests that the business has a solid digitalization model. Maharashtra (18%), Uttar Pradesh (10%), Delhi (10%), Karnataka (8%), and Tamil were home to more than half of the enterprises that were incorporated.

Corporate Tax Rate in Bangladesh:

  1. Companies listed on the stock market (publicly traded companies) 25%
  2. Non-public companies (private companies with shares) 30%
  3. Institutions other than merchant banks which are publicly traded, insurance companies, and financial services companies 37.5%
  4. Financial institutions, insurance companies, and banks not listed on a public exchange 40%
  5. Operators of public mobile networks 40%
  6. Operators of mobile networks that are not publicly traded 45%
  7. Manufacturers of cigarettes that are publicly traded 45%
  8. Manufacturers of non-publicly traded cigarettes 45%
  9. An individual company 25%

One of the factors contributing to the increase in business incorporations appears to be improved simplicity of incorporation.

According to SN Viswanathan, a practicing company secretary, “the expense and bother of incorporation have decreased, and there is no minimum capital required to incorporate a private limited company.” But, he added, “it will be interesting to observe how many of the newly incorporated companies remain in operation over the following five years.”

According to the research, entrepreneurship appears to increase during economic crises.

According to Shashwat Alok, assistant professor of finance at the Indian School of Business, “company creation has usually increased during a recession in the US on average over the past 100 years.”

Even though only 31% of the years since 1855 had been designated as recessionary years, a 2009 research by the Ewing Marion Kauffman Foundation found that 57% of Fortune 500 companies had been formed in a recession or bear market year. “A lot of the new firm creation may revert back to normal levels if the economy improves,” Alok remarked.

Another possibility is that highly skilled workers will turn to entrepreneurship during a challenging period as their employment options become more scarce. Thusly established businesses typically continue to build lucrative enterprises, according to Alok. According to research, the second possibility predominates the first one, particularly during a recession.