Formation Of A Company Explained in 500 Words

The phrase “incorporation” refers to the formation of a company. A certificate of registration will be issued once this process is completed. An incorporated business has the legal position of being a separate legal entity from its owners.

Fact: If you are self-employed and own a business, it is not a legal entity until it is incorporated and granted a registered business name. Until this happens, you, as a self-employed person, are the legal owner of the firm and are consequently liable for any liabilities incurred by it.


  1. A corporation is an organisation that exists in its own right, separate from its owners. Many of the same legal rights and responsibilities apply to incorporated entities as they do to individuals.
  2. Limited liability is a crucial feature of corporation incorporation, as it ensures that its shareholders are not personally liable for the company’s debts.
  3. A person or a group of people with a common aim might perform offshore company registration. Making a profit isn’t always a requirement.

Let’s See How Beneficial Incorporated Businesses Are

One may think incorporating a business means going through a hefty amount of paperwork, spending a way lot of money and resources. But not only it’s not true but also it is totally opposite of that. If we look at the ratio between incorporated companies and the revenue they make, it will get clearer:

pie 1
pie 2

Our Client Story: A Case Study

Our client company is based in the Philippines. Although, the company wanted to open up a liaison business here in bangladesh, planning to launch new products based on our market. The challenges they were facing are state below:

  1. Quality and Standards: There is no quality assurance policy or enough support structures in place to help all businesses grasp quality principles and also develop quality awareness in their business practices.
  2. Marketing: Foreign enterprises that have been incorporated do not have sufficient marketing capabilities or a network.
  3. Shortage of Skilled Workers: Incorporated businesses do not have sufficient marketing capabilities or a network.
  4. Physical Infrastructure: Bangladesh’s physical infrastructure for formation of company is in poor condition.
  5. Geographical Disadvantage: Bangladesh is geographically isolate from more profitable global markets such as the United States and Europe.

The Assistance We Provided To Make Our Client Incorporated

The company incorporation services we provided our client with are described below:




Private Limited



2 Share Holders

Trade License

City Corporation

Min. Capital 50,000 BDT

Tax Identification Number


7-10 Days Timeline


NBR Local Office

Cost: 90k to 400k BDT

Chamber of Commerce


Subsidiary Allowed


Commerce Department

100% Share Held By Foreigners

Work Permit/Visa


Benefits of Incorporating Companies

Incorporating a company offers several benefits. Here are some key advantages of incorporating a company:

  1. Limited Liability: One of the primary benefits of incorporating a company is the limited liability protection it provides. When you incorporate a company, it becomes a separate legal entity from its owners (shareholders).
  2. Credibility and Professionalism: Incorporating a company adds credibility and professionalism to your business. Having “Inc.” or “Ltd.” after your company name indicates that you have gone through the formal process of establishing a legally recognized business entity.
  3. Access to Capital: Incorporating a company makes it easier to raise capital for your business. As a separate legal entity, lastly a company can issue shares to raise funds from investors.
  4. Tax Advantages: Depending on the jurisdiction, there may be tax advantages associate with incorporating a company.
  5. Continuity and Perpetual Existence: Unlike sole proprietorships or partnerships that may cease to exist upon the death or departure of the owner(s), a company has perpetual existence.

Common Mistakes to Avoid in the Company Incorporation Process

Incorporating a company is a complex process. Common mistakes to avoid include failing to properly complete the paperwork, not specifying the company‘s activity, not preparing articles of association, not having a proper understanding of corporate liability, failing to comply with local regulations, not properly considering taxation matters, and not having a written shareholders agreement.

Another mistake is not registering the company with any official governing authorities such as the Registrar of Companies. Not obtaining correct advice or legal representation, ignoring the compliance side of the process and not having adequate insurance are also mistakes to avoid.

Finally, not ensuring that all relevant documents are filed correctly and on time can lead to costly consequences, such as fines and other penalties. By avoiding these common mistakes, entrepreneurs and also businesses can ensure that their company is structured correctly and complies with all applicable laws.

Final Words

Many people believe that offshore company registration is a difficult and time-consuming process. Having said that, it is by no means a simple task, but the benefits far surpass the work involved. In any case, if business owners run into any challenges or unexpected obstacles when forming a business, they may always turn to us for assistance.