The establishment of a private limited company in Bangladesh gives a multiplicity of benefits, one of which is the removal of personal accountability. Additionally, the creation of such a firm allows for increased ownership and managerial autonomy.
In this comprehensive guide, an overview of the procedures that must be followed in order to form a private limited company in Bangladesh is provided, along with an explanation of the requirements that must be satisfied.
Understanding Private Limited Companies
Definition and Characteristics
Limited liability protection is provided to shareholders by the formation of a private limited company, which is a separate legal entity from its owners. This allows shareholders to benefit from limited liability protection. It is conceivable for there to be as few as two shareholders or as many as fifty shareholders, and it is also feasible for the shares to be unavailable for trading on the public market.
An explanation of the methods, rights, and responsibilities of businesses, directors, and shareholders may be found in the Corporations Act, which is the legislation that governs private limited corporations in Bangladesh.Furthermore, it controls the rights and duties of shareholders, which is an additional benefit.
Steps in Private Limited Company Formation
You should begin by selecting a name for your company that is one of a kind, and then you should get in touch with the Registrar of Joint Stock Companies and Firms (RJSC) to determine whether or not the name is accessible. The name that is picked must be in compliance with the legal standards and should not infringe upon any trademarks or corporations that are already in existence.
Memorandum and Articles of Association
Draft the Memorandum of Association and Articles of Association, which spell out the company’s constitution, its goals, and the laws that govern its operations internally. The RJSC must provide its consent before these papers may be used.
Share Capital and Shareholders
It is important to first create the share capital structure, and then it is necessary to distribute the shares to the shareholders.Both of these steps are necessary processes.If they are appropriate, shareholders’ agreements are needed to contain additional terms about rights, obligations, and processes for the resolution of disagreements. These provisions must be included by the shareholders.
Registration with RJSC
In order to finish the process of registering a company, the RJSC has to be in possession of the Memorandum and Articles of Association, in addition to any additional documents that may be required.Following the approval of the business, the company is legally formed, and a Certificate of Incorporation is then issued to the company.
For the purpose of obtaining a Tax Identification Number (TIN), it is required to register the company with the National Boar of Revenue (NBR) for the purpose of paying taxes.Take the necessary steps to comply with tax responsibilities, including registering for value-added tax, if the situation calls for it.
Obtaining Licenses and Permits
Take the necessary steps to get the necessary licenses and approvals from the right government bodies at the appropriate time, taking into consideration the nature of your business establishment.Permissions that are specialized to a certain industry, environmental clearances, and trade licenses are some examples of the kind of things that could come under this category.
Opening Bank Accounts
To facilitate the management of financial transactions and to keep personal and company money distinct, you should open a corporate bank account.The bank should be provided with the documentation that the firm used to incorporate, as well as the identity of the authorized signatories.
In order to ensure continued compliance with statutory requirements, such as submitting yearly reports, keeping accounting records, and having shareholder meetings in accordance with legal duties, it is necessary to observe these requirements.
On the very same day that the business is established, you should immediately start engaging in activities that are connected to the organization.There are a number of actions that need to be taken in order to push the growth of the company. These processes include the implementation of internal policies, the hiring of employees, and the introduction of marketing and sales activities.
The formation of a private limited company in Bangladesh requires compliance with a number of legislative criteria and a number of procedural stages.It is possible for entrepreneurs to effectively form and run a private limited company by following this step-by step approach and getting expert help when it is required. By doing so, they may use the advantages of the company for the development and success of their businesses in the increasingly competitive Bangladeshi market.