Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Mongolia. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
This information was collected from World Bank: Doing Business
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Check name for uniqueness at the State Registration Department of the Tax Authority. | 1 day | MNT 500 |
| 2 | Pay the registration fee | 1 day | no charge |
| 3 | Notarize the statutes and charters of the company; notarize the schedule showing the equity share held by each partner | 1 day | MNT 15,000 |
| 4 | Register at the State Registration Office, under the General Department of State Taxation | 6 days | MNT 22,000 |
| 5 | Register at local Tax Office | 1 day | MNT 2,000 |
| 6 | Apply for social security with the Social Insurance Department | 1 day | no charge |
| 7 | Make a seal | 1 day | MNT 46,000 rush delivery fee |