The vast majority of businesses in Bangladesh are registered as private limited liability corporations, which are more frequently referred to as businesses with limited liability. The shareholders of a private limited company in Bangladesh are not accountable for the business’s obligations beyond the amount of share capital that they have given to the firm.
This is because the private limited company is a distinct legal entity. The Companies Act of 1994 states that any anyone, whether they are a foreigner or a local, who is at least 18 years old is eligible to create a business in Bangladesh.
company Pre-Registration: Key facts
Company Name: Before a business may be incorporated in Bangladesh, the name must first be authorized, also known as received clearance.
Directors: Each private limited company must have a minimum of two directors in order to operate legally. Directorships may be held by either domestic or international citizens. Directors are required to be at least 18 years old, financially stable, and free from any criminal convictions or bankruptcies that may have occurred in the past.
A director is required by law to possess the qualifying shares that are outlined in the Articles of Association within the organization. When a shareholder is not a natural person (that is, a business), that shareholder has the ability to choose a nominated director on its behalf.
Shareholders: Within the boundaries of Bangladesh, a private limited corporation may have as few as two shareholders and as many as fifty stockholders. A shareholder and a director might be the same individual or they can be two separate people. It is possible for the shareholder to be a person or another legal entity, such as a trust or another commercial enterprise.
Either a hundred percent local or foreign ownership is permitted. After the Bangladeshi business has completed the process of formation, it is possible for the company to either issue new shares or transfer existing shares to another individual at any moment.
Authorized Capital: Both the Memorandum of Association and the Articles of Association are required to include a statement about the amount of allowed capital. The greatest amount of share capital that the firm is permitted to issue (allocate) to shareholders is referred to as the maximum share capital.
An unissued portion of the permitted capital may be allowed to stay. In Bangladesh, there is neither a minimum nor a maximum restriction for the amount of approved capital that a local firm may have. However, in order to have complete freedom with respect to expatriation and the recruitment of foreign expats, a minimum investment of fifty thousand dollars has to be made in the company. This is necessary for both practical reasons and.
Paid-up Capital: A local business in Bangladesh must have a minimum paid-up capital of one taka, whereas a foreign-owned firm must have a minimum paid-up capital of fifty thousand dollars. Increasing the amount of paid-up capital, which is often referred to as share capital, is something that may be done at any time after the business has been incorporated.
Registered Address: To form a business in Bangladesh, a local address must be supplied as the registered address of the firm. This is a requirement for the registration process. There is a requirement that the registered address be a physical address; it cannot be a post office box.
Memorandum and Articles of Association: To be able to incorporate a corporation, it is necessary for the firm to have its own Memorandum of Association and Articles of Association.
Required Documents for Company Registration in Bangladesh
For the purpose of incorporating a business in Bangladesh, the RJSC requires the following information to be provided:
Company Name: It is necessary to secure a name clearance.
Memorandum of Association and Articles of Association: In the Memorandum of Association, the RJSC mandates that the purpose clause must be no more than 400 words long and include no more than seven clauses.
Shareholders Particulars: A copy of the shareholder’s national passport is necessary in the event that the shareholder is a citizen of Bangladesh.
– It is necessary to provide information on the Directors, including their Tax Identification Numbers.
– Address, which is registered.
It is necessary to have a signed copy of the Subscriber Page and Form IX, as well as a scanned copy in PDF format.
– In the case of individuals who are not citizens of the United States, copies of the passports of shareholders and directors are necessary.
Registration Procedure of Company in Bangladesh
There is a degree of computerization involved in the process of registering a company in Bangladesh. There are three stages involved in the process of establishing a corporation in Bangladesh, and they are as follows:
The first step is to clear your name; the second step is to create a bank account and bring the paid-up capital into Bangladesh; and the third step is to register your company. Step b is only relevant in the event that the proposed firm has any shareholders who are from outside the country.
Step 1: Name Clearance
The first thing that has to be done in order to establish a business in Bangladesh is to get a name approval for the name that may be used for the firm. Before submitting an application for the name clearance, one must first access to the website www.roc.gov.bd and establish a username for themselves.
Immediately after the submission of the application for name clearing, a bank payment slip will be obtained. This slip will be used to transfer Tk 600 to the bank that has been specified. Following the completion of the payment, the name clearance may be received from the website of the RJSC.
Step 2: Bank account opening and bringing in the paid up capital
This phase is only relevant in the event that the proposed firm contains shareholdings from overseas investors.
It would be necessary to create a bank account in the desired business name with any of the scheduled banks in Bangladesh inside the country.
It is necessary to transfer funds into the account that are equivalent to the shares that are going to be held by the foreign shareholders who are located outside of Bangladesh once the account has been opened. The RJSC will need an Encashment Certificate in order to begin the incorporation process, and the Bank will provide this certificate.
Step 3: Registration of the Company
on complete the process, you must upload all of the necessary information on the website of the RJSC department. Following the submission of the necessary information, a bank payment slip will be obtained for the purpose of paying the registration costs and stamp tax.
Following the completion of the payment in the bank, the procedure of submitting an application for registration is also finished. In order to complete the process of obtaining the Certificate of Incorporation, it is necessary to perform routine monitoring of RJSC.
RJSC personnel will review the information and documents that have been provided. They are going to issue the Certificate of Incorporation if they are happy with the application.
The following papers are provided after the processes associated with registration have been completed.
Certificate of Incorporation: RJSC will issue a Certificate of Incorporation so that the business may legally be established. It is expected that the registration number, the name of the firm, and the date of formation will all be included on the certificate.
The incorporated company’s list of directors is included on Form XII, which is the second form in the series.
copy of the articles of association and the memorandum of association that have been certified.
“Applying for Trade License, Tax Identification Number, VAT registration and other licenses”
It is recommended that the firm either buy a commercial space or rent a space in any commercial area once the incorporation process has been completed.
After that, it is required to submit an application for a Trade License, a VAT registration, and a Tax Identification Number at the same time. It is possible that the firm will be required to get additional business licenses, depending on the activities that it engages in. We will give service for the first six (6) months in order to prepare the documents for the VAT return and to file the VAT (Musak).
Other Licenses, Permits, and Registration: Registration with any Chamber of Commerce and Industry (which is considered optional but required in order to obtain either an Import Registration Certificate (IRC) or an Export Registration Certificate (ERC)) Import Registration Certificate (IRC) for commercial purposes or for industrial raw materials by submitting an application to the Chief Controller of Import and Export in the prescribed form Export Registration Certificate (ERC) by submitting an application to the Chief Controller of Import and Export BIDA recommendation is required for the issuance of an Industrial IRC
Any additional license that may be required, based on the specifics of the business activity in question.
Return Filing Requirements – Annual Return: An Annual General Meeting (often known as a “AGM”) is required to be convened before the end of each calendar year. After the business has been incorporated, the annual general meeting (AGM) must be held within the first 18 months, and after that, there must be a minimum of 15 months that passes between each AGM.
– Regular Return: In the event that there is a change in the composition of the board of directors, the shareholding structure, or any other change, a return that is pertinent must be submitted to the RJSC within a certain amount of time.