The article covers the English approach to “privatizing” functions of the state during the colonial expansion to the remote regions (armed forces maintenance, imposition and collection of taxes, social regulation). The Bengali ventures of the East India Company (EIC) are analyzed in the main part of the research. Due to the hostile environment, the private capital was forced to rely on its own security structures. While the business was acquiring excessive governmental authority, the ability to assess future profitability was disrupted. The merchants had transformed themselves into a violent institute for avaricious plundering of the enslaved people and aggressive territorial acquisitions. The author comes to the conclusion that the large-scale intervention of private interests into the sphere of state affairs was detrimental. Consequently, the EIC had developed the conflict of interests in both India and Great Britain which resulted in uprisings, nationalization of EIC’s property, and corporate dissolution.