Note that the majority of Bangladeshi companies are registered as limited liability companies (commonly referred to as limited liability companies). The shareholders of a private limited company in Bangladesh are not liable for the company’s debts beyond the quantity of share capital they have contributed. According to the Companies Act of 1994, any individual over the age of 18 may form or register a company in Bangladesh, regardless of nationality.
Table of Contents
ESSENTIAL FACTORS OF COMPANY REGISTRATION IN BANGLADESH
Company Name Clearance:
Prior to company formation or incorporation in Bangladesh, the company’s name must be first approved (certified).
The Directors:
Second, there must be a minimum of two directors. Directors can be either domestic or international. Directors must be at least 18 years old and cannot have been declared insolvent or convicted of misconduct in the past.
The law requires that a director must own qualification shares indicated in the Articles of Association. A shareholder that is not a natural person (i.e., a corporation) may nominate a director.
Investors: Thirdly A Bangladeshi limited liability company can have between two and fifty shareholders. A director and shareholder may or may not be the same individual. A shareholder may be an individual or another legal entity, such as a corporation.
In most industries, 100% foreign or domestic ownership is permissible. After the Bangladeshi company has completed the incorporation procedure, new shares can be issued or existing shares can be transferred to a new owner at any time.
Authorised Capital for the Company:
The authorized capital must be stated in the Memorandum of Association and Articles of Association. The maximum quantity of share capital permitted
The company is permitted to issue (allocate) shares to its shareholders.
Some of the authorized capital may continue to be issued. In Bangladesh, there is no minimum or utmost limit on authorized capital.
Paid-up Capital:
Paid-up capital, also known as share capital, can be increased at any time after the company is established.
Registered Location:
To register a company in Bangladesh, you must provide a local address for the company’s registered office. The registered address must be a physical location, which can be either residential or commercial.
Constitution and Articles of Incorporation:
The confirm the Articles of Incorporation-to-be we must submit a memorandum of association and articles of association to the RJSC.
Foreigner Considerations for Company Formation
Foreigners who desire to establish a business in Bangladesh must consider the following points.
You must establish a bank account in the name of the proposed company after obtaining the name clearance from the Registrar of Joint Stock Companies and Firms (RJSC), also known as the registrar of companies, and deposit the initial paid-up capital. This is required for Bangladeshi company incorporation.
All company formation and incorporation procedures can be completed without your presence in Bangladesh. The only possible exception is opening a bank account, contingent on the bank chosen.
Each director and shareholder may be a foreign national.
If you only wish to incorporate a limited liability company in Bangladesh and have no intention of relocating there, you are not required to obtain a special visa. You are free to operate your business from abroad and to visit Bangladesh on a business visa whenever necessary to attend to company-related matters.
If you intend to establish a business in Bangladesh, you are required to obtain a work permit.
DOCUMENTS REQUIRED FOR Company Registration in Bangladesh
However, for Company Formation or company incorporation in Bangladesh, the company registrar requires the following information:
- Company Title: A name clearance is necessary.
- Articles of Association and Memorandum of Association: RJSC stipulates that the object clause of the MOA must contain no more than 400 words and seven clauses.
- (National ID if the shareholder is Bangladeshi) Shareholders’ Information
- Information Regarding Directors: (Including Tax Identification Number)
- Registered Location:
- Form IX and Subscriber page appropriate: A scanned copy in pdf format must be provided.
- For foreigners: a copy of the shareholder and director’s passport.*
PROCEDURE FOR THE REGISTRATION OF A COMPANY
The registration or formation of a company in Bangladesh is partially computerized and conducted online. The step-by-step process for registering a corporation:
a) Name Clearance: The opening of a bank account brings the paid-up capital and, ultimately, the name clearance.
b) Business Registrations.
Increase your possibilities of prompt name approval by ensuring the name:
- Not identical or excessively similar to any extant local company names
- Does not match any registered trademarks.
- Not profane or offensive
- Not currently reserved
- A name that has been authorized will be reserved for one month following the approval date. You can prolong the name by filing a request for extension just prior to the expiration date.
FIRST STEP: NAME CLEARANCE
To establish a company, you should first obtain name authorization for the proposed company name. You must visit www.roc.gov.bd and create an account. Then, you can submit an application for name clearance. After submitting a name clearance application, you will receive a bank payment receipt instructing you to pay BDT 600 to the designated bank. After making the payment, you must enter in to your RJSC account to receive the name clearance. A name that has been authorized will be reserved for one month following clearance. You can prolong the name by filing a request for extension just prior to the expiration date.
SECOND STEP : opening a bank account and depositing the initial capital.
This second stage is applicable only if the proposed company has foreign shareholders.
You must establish a bank account in the proposed company name with any Bangladeshi scheduled bank. After opening the account, you will have to remit money equal to the shares to be possessed by the foreign shareholder from outside Bangladesh in the account. The Bank will issue the Encashment Certificate required for RJSC’s incorporation.
THIRD STEP: REGISTER THE BUSINESS
Thirdly, submit all necessary information through the RJSC website. Additionally, you must upload Form IX and Subscriber Page. Following completion of all steps, you will receive a bank payment receipt for paying the registration fees and stamp duty.
After completing the payment at the bank, you are finished. You must now pursue the RJSC in order to procure the incorporation certificate. Officials from the RJSC will review the documents and information. If satisfied, they will issue the digitally signed document.
Certificate of Incorporation; Memorandum and Articles of Association, and Form XII.
These files will be sent to the email address linked to your RJSC account.
In some instances, the incorporation procedure may be delayed if the shareholders or directors are of a particular nationality. However, this is an uncommon occurrence. In such situations, authorities may request additional information.
Post-Registration Company Formation Formalities
In addition, you need certain documents issued by the Registrar of Joint Stock Companies and Firms (RJSC).
RECORDS ISSUED BY RJSC:
- Certificate of Incorporation: The RJSC will issue the company’s Certificate of Incorporation. The certificate will include the company’s registration number, company name, and incorporation date.
Form XII: Form XII contains a listing of director information for a corporation.
Certified copies of the Memorandum of Understanding and the Articles of Agreement.
Some of the additional requirements for registering (company incorporation) your Bangladeshi company. Like, - Certificates of ownership for each shareholder.
Register investors, stocks, directors, etc.
Company insignia for the business.
A rubber stamp for the organization APPLYING FOR TRADE LICENSE, TAX ID, AND OTHER LICENSES.
After incorporation, you should manage or rent space in a commercial area.
Then you must apply for a Business License and a Taxpayer Identification Number. Depending on the business activities of your company, you may be required to obtain additional business licenses.
RETURN FILING REQUIREMENTS OF THE RJSC
Annual Return: An Annual General Meeting must be conducted each year. The annual meeting must be held within 18 months of the company’s incorporation, and no more than 15 months may pass between AGMs.
In the event of a change in the board of directors, the shareholding structure, or any other change, a return must be lodged with the RJSC within a specified time frame.
Company Establishment
Therefore, Bangladesh is becoming one of the world’s most prospective export markets. Due to the rapid growth of the economy in this country, the company formation process poses numerous concerns to prospective business owners. How to register your company is covered in detail in the section above.
