A Taiwan company does not come into existence merely because its proposed name has been approved. Article 6 of the Company Act makes registration a condition of incorporation. For a US business preparing a Taiwan subsidiary, the signing date matters: was the intended contracting company incorporated when the agreement was made?
A reserved name is an early step
Under Article 18, company names and business activities undergo approval before company registration, with the approval reserved for a period. That paperwork establishes progress in the application. It does not establish incorporation.
Taiwan's Ministry of Economic Affairs sets out the separate stages in its foreign-investment flow chart: name preapproval, investment application, remittance, verification of the investment amount, and incorporation registration. An investment approval letter belongs to that sequence. Treating it as the final registration document can put the wrong party on a contract. The broader process is covered in the Taiwan company formation guide.
The name on a proposed lease or order
Negotiations for premises or equipment may begin while incorporation is being arranged. Read the party and signature blocks together. Does the draft identify an individual investor, an existing US entity, or the proposed Taiwan subsidiary as the party taking on payment and performance obligations?
Identity matters here. Article 19 prohibits conducting business or other legal acts in a company's name before incorporation registration. The ministry's Company Act FAQ explains the prohibition by reference to business and equivalent transactions carried out using an unregistered company's name, protecting the other party and the security of transactions.
Does that make every preparatory arrangement a criminal offense? A particular act still needs examination. Its nature and the name used matter. The FAQ is neither a blanket approval of every pre-incorporation contract nor a finding that all preparation is criminal. A discussion of terms and an obligation already undertaken in a company's name should not be treated as interchangeable facts.
For a draft already circulated, a useful review would compare the named party, signing authority, recipient of any deposit, and proposed treatment of an incorporation delay. These are practical questions, not a statutory list of required documents. Keep the surrounding correspondence too. Changing a name in the latest draft does not, by itself, explain what the parties previously agreed or establish who bears an existing obligation.
Article 19 reaches the actors themselves
Civil liability falls on the actor who violates Article 19. Where there are two or more such actors, the provision makes their civil liability joint and several. Identifying those actors requires attention to conduct; a shareholder list or meeting attendance sheet alone is not a substitute for that assessment. These consequences are stated in Article 19, paragraph 2.
Criminal penalties are also specified. The provision allows imprisonment for up to one year, short-term detention, or a fine of up to NT$150,000, and permits a fine to be imposed in addition. It also provides for the competent authority to prohibit use of the company name. Whether a particular agreement involves a violation depends on the acts and evidence; this statutory description is not a prediction of a prosecution or sentence.
A plan to finish incorporation later should therefore not replace examination of the earlier signing. Article 19 expressly addresses the actors' own liability. Keep the name-approval documents, registration status at the time, signed agreement, and explanations sent to the other party together. The later registration certificate will not tell the whole story of the earlier signature.
Official sources
- Company Act, Article 6: registration and incorporation
- Company Act, Article 18: name and business-activity preapproval
- Company Act, Article 19: acts in an unregistered company's name
- Ministry of Economic Affairs, Department of Investment Review: investment flow chart
- Ministry of Economic Affairs: Company Act Article 19 FAQ
Sources checked October 14, 2026. This discussion concerns the cited Taiwan provisions and official guidance.
Frequently Asked Questions
- Can we start trading once the Taiwan company name is approved?
- Name approval precedes incorporation. Article 6 of Taiwan's Company Act makes registration a condition of incorporation, while Article 19 prohibits conducting business or other legal acts in the name of a company before incorporation registration.
- Does Article 19 make every preparatory contract a crime?
- No blanket conclusion follows. The Ministry of Economic Affairs explains the rule in terms of business and equivalent transactions using an unregistered company's name. A particular preparatory arrangement requires examination of the name used and what was actually done.
- Do two people involved in a violation each owe half?
- Article 19 provides for joint and several civil liability where there are two or more actors who violate it. Being a shareholder or attending a meeting does not, by itself, establish that a person is one of those actors; their conduct matters.
This article provides general information and is not legal advice on any individual matter.
