What is Company Registration in Bangladesh?
Rules and regulation for a company registration in Bangladesh are different for each local entrepreneurs and foreign entrepreneurs. To register a company in Bangladesh, for foreign entrepreneurs is really difficult. Foreign entrepreneurs are treated differently in respect of fees, government official additional expenses, time and behavior. Foreign investors don’t get same treatment as local investors. To get the licenses or pass the documents to start a business in Bangladesh you will have to face artificial complexity from the end of government officers, staffs etc. However, it is not impossible to get your company registered in Bangladesh.
There are mainly two types of company registration in Bangladesh
- Private limited Company (Limited by shares or Limited by guarantee)
- Public limited company (Limited by shares or Limited by guarantee)
However, while considering the registration of a new company or relocation of your existing company to Bangladesh, it is important to note that most companies in Bangladesh are registered as private limited liability companies (private limited companies). A private limited company is a separate legal entity and shareholders are not liable for the company’s debts beyond the amount of contributions share capital of the company. According to the Companies Act 1994 of Bangladesh, any person (foreign or local) above the age of 18 can register a company in Bangladesh.
Private Limited Liability Company registration in Bangladesh
- A Private Limited Company in Bangladesh requires minimum two directors.
- As per the Companies Act, 1994 of Bangladesh Statutory meeting and report are not applicable to Private Limited Company.
- Retirement provisions are not applicable on Private Limited Companies.
- It is also not required to do statutory filings in lieu of prospectus.
- There is no restriction for allotment of shares.
- Certificate of commencement of business is not required to obtain in case of privately limited company registration in Bangladesh.
- Submission of accounts to members are also not required.
- Retirement and rotation of directors are not compulsory in the Private Limited Company in Bangladesh.
- Private Limited Company in Bangladesh is prohibited to give an invitation to the public to subscribe for shares or debentures
- The number of members is limited up to 50 excluding persons who are employees of the company
Checklist for Company registration in Bangladesh?
The very first step for a company registration to start a business in Bangladesh is the name clearance (approval) by The Registrar of Joint-stock Companies and Firms (RJSC).
You need to select a name for the proposed company and submit it to RJSC with prescribed fee. After name clearance from RJSC, you have required drafting Memorandum of Association & Article of Association and describes all kinds of business & activities which the company will operate and shares distribution of every Director and shareholders in the Memorandum of Association. All shareholder, director, managing director, Chairman shall sign the Memorandum for their proposed share.
The authorized capital of the company is mentioned in the Memorandum of Association and Articles of Association. Authorized capital is the maximum amount of share capital that the company is authorized to issue (allocate) to shareholders. There is no minimum or maximum limit for authorized capital in Bangladesh.
Minimum paid-up capital for registration of a company in Bangladesh is Taka 1. It can be increased any time after the incorporation of the company.
To register a company in Bangladesh, you are required to provide a local address as the registered address of the company. It must be a physical address (can be either a residential or commercial address) and cannot be a P.O. Box.
Directors and Shareholders
A private limited company in Bangladesh shall have minimum two directors and a minimum of 2 and maximum of 50 shareholders.A director and shareholder can be the same or a different person. The shareholder can be a person or another legal entity.Directors can be either local or foreign. He must be at least 18 years of age and must not be bankrupt or convicted for any malpractice in the past. The director shall own qualification shares stated in the Articles of Association.
Procedure for company registration in Bangladesh?
Company registration in Bangladesh is divided into three steps.
- Name Clearance;
- Bank account opening and bringing in the paid-up capital; and
- Company Registration.
Step 2 is only applicable if there is any foreign shareholder in the proposed company.
STEP 1: NAME CLEARANCE
The very first step to incorporate a company in Bangladesh is to obtain a name clearance for the proposed company name. The application for name clearance is filed online. After filing the application for name clearance, you will receive a bank payment slip and you will have to pay Taka 600 to the designated bank. Once the payment is done, you can log in to your account on the RJSC website and you will get the name clearance.
While filing for the name application, make sure the name is in accordance with the naming guidelines as prescribed in Bangladesh.
The name approved will be reserved for a period of 6 months from the date of clearance. You can extend the time period of the name by filing an extension request just before the expiry date.
STEP 2: BANK ACCOUNT AND PAID-UP CAPITAL
If the shareholder in the proposed company is from a foreign country you will have to open a bank account in the proposed company name with any scheduled bank in Bangladesh. After opening the account, money equal to the shares to be owned by the foreign shareholder has to be remitted from outside Bangladesh in the bank account. An Encashment Certificate is issued by the Bank which will be required by RJSC for incorporation.
STEP 3: COMPANY REGISTRATION
The last step to register the company is to submit all the required information in the RJSC’s website. Form IX and Subscriber Page of the MOA & AOA is also required to be upload along with all the required information. After uploading the form, subscribers page an all the information’s, you will receive a bank payment slip for paying the registration fees along with stamp duty.
Once you are done with the payment in the bank, RJSC officials will check& verify the documents and information. On being satisfied with the application filed, RJSC officials will issue the digitally signed documents:
- Certificate of Incorporation(COI);
- MoA and AoA; and
- Form XII.
These documents will be mailed to your email address associated with your RJSC account.
- The certificate of Incorporation will have the registration number, the name of the company and the date of incorporation.
- Form XII contains the list of directors of the company incorporated.
- After the incorporation, once you a commercial space you need to apply for Trade License and Tax Identification Number. Depending on your company’s business activities, you may need to obtain more business licenses.
- Your company needs to hold, an Annual General Meeting every calendar year. The AGM shall be conducted within 18 months from the date of incorporation of the company.From the subsequent years, not more than 15 months shall elapse between one AGM and the next.