FAST AND ERROR-FREE COMPANY REGISTRATION IN BANGLADESH

REGISTERING A LIMITED COMPANY IN BANGLADESH INVOLVES SEVERAL STEPS, AND WHILE THE PROCESS CAN TAKE TIME, FOLLOWING THESE GUIDELINES CAN HELP MAKE IT AS FAST AND ERROR-FREE AS POSSIBLE:

THIS IS THE ULTIMATE SOLUTION AND FULL GUIDELINE, YOU WILL LEARN HOW TO INCORPORATE YOUR PRIVATE LIMITED COMPANY IN BANGLADESH.

Incorporating a private limited company is a significant step for entrepreneurs in Bangladesh, marking the commencement of a formal business journey. It provides a legal identity to the business and offers limited liability protection to its shareholders, potentially enhancing the entity’s credibility and attractiveness to investors. Though steep in potential rewards, the process is entangled with various legal requirements, including drafting a Memorandum of Association (MoA), which outlines the company’s constitution and defines its relationship with shareholders.

Some common features of the RJSC website: That makes the company registration journey easier and smoother.

RJSC :: Fee Calculator
Fee Calculator: You can calculate the fee for your any submission to RJSC from this page.

::: RJSC ::: Entity Name Search
Search Entity Name ; Use this page to see whether a proposed name of your new entity resembles to the already registered or booked entity names. Proposed name(s) …

:: RJSC :: Submission Status
You can check your submission status at RJSC web. Enter Submission No.

By using the above-mentioned reference: You can know your company’s registration fee also you can choose a suitable name for your company and finally you can check your company’s registration last status.

This article delves into the intricacies of forming a private limited company in Bangladesh, beginning with pre-registration requirements such as choosing a unique company name and understanding the roles of directors and shareholders. It also covers the essential components of the MoA, capital necessities, and the comprehensive list of documents needed for registration. Subsequently, the piece provides a step-by-step guide through the registration procedure, followed by post-incorporation obligations and return filing requirements, thereby equipping readers with the knowledge to navigate the incorporation process proficiently.

TIPS FOR FAST AND ERRORLESS REGISTRATION:

• Double-check Documentation: Ensure all documents are accurate and complete to avoid delays.
• Use Professional Services: Consider hiring a legal or consulting firm to assist with the process.
• Stay Updated: Keep informed about any changes in regulations or procedures by visiting the RJSC website.
• Online Application: Utilize online services for faster processing, as they can be quicker than traditional methods.

By following these steps and tips, you can streamline the process of registering a limited company in Bangladesh.

PRE-REGISTRATION REQUIREMENTS:

Pre-registration requirements are an important part of ensuring company Incorporation or Registration in Bangladesh.

KEY FACTS ABOUT COMPANY FORMATION

Before the incorporation of a private limited company in Bangladesh, it is crucial to secure approval for the proposed company name from the Registrar of Joint Stock Companies and Firms (RJSC). The RJSC is the primary regulatory body overseeing company registrations in Bangladesh.

THE REGISTRAR OF JOINT STOCK COMPANIES AND FIRMS (RJSC)

RJSC plays a pivotal role in the registration of companies and the acceptance of returns, thereby maintaining the integrity of company records in Bangladesh. The process of name clearance is a critical step managed by RJSC, where entrepreneurs must submit a name clearance application through the RJSC website, pay the prescribed fee, and await approval. The name clearance, once approved, is valid for 30 days for companies and 180 days for societies, during which the registration application must be filed.

COMPANY NAME APPROVAL

To enhance the likelihood of quick name approval, the proposed name should not be identical or too similar to existing company names, infringe on any trademarks, or be deemed obscene or vulgar. The name should not be already reserved under someone else’s application. After obtaining name clearance, the name is reserved for 30 days, extendable by filing a new application before the expiry date.

Entrepreneurs are advised to engage professional firms to facilitate the name clearance application, ensuring that all requirements are meticulously met. Once the name is cleared, shareholders must liaise with a Bangladeshi bank to open a temporary bank account for share capital remittance, providing necessary documents like a draft memorandum, articles of association, and a copy of the name clearance approval certificate. Upon bank approval, shareholders must remit the share capital and obtain an encashment certificate, unless the shareholders include Bangladeshi citizens, in which case this requirement is waived.

DIRECTOR REQUIREMENTS

In Bangladesh, a private limited company must have a minimum of two directors. These directors can be either local or foreign nationals. It is mandatory that each director is at least 18 years of age and must not have been declared bankrupt or convicted of any offense in the past. Furthermore, directors must hold qualification shares as stated in the Articles of Association. In instances where a shareholder is not a natural person, such as a company, a nominee director may be appointed on its behalf.

SHAREHOLDER REQUIREMENTS

A private limited company in Bangladesh can have between 2 and 50 shareholders. These shareholders can be individuals or legal entities such as another company or trust. Both local and foreign shareholding is permitted, with the possibility of 100% foreign ownership. Shareholders have the flexibility to issue new shares or transfer existing shares at any time after the company has been incorporated.

AUTHORIZED CAPITAL

The Memorandum of Association and Articles of Association must specify the amount of authorized capital. This represents the maximum share capital that the company is authorized to issue to shareholders. A portion of this authorized capital may remain unissued, with no minimum or maximum limit set for local companies in Bangladesh. However, to facilitate expatriation and the employment of foreign expatriates, a minimum investment of USD 50,000 is generally required.

PAID-UP CAPITAL

For the registration of a company in Bangladesh, the minimum paid-up capital required is Taka 1 for local companies and USD 50,000 for foreign-owned companies. Paid-up capital, also known as share capital, can be increased at any time after the company’s incorporation. This capital is the actual amount of money received from shareholders in exchange for shares.

GOVERNMENT FEES

The government fees associated with the incorporation of a company in Bangladesh are calculated based on the declared authorized capital. These fees include registration fees, stamp duty, and the cost of certified copies, among others. The specific charges are detailed in the Companies Act and vary depending on the amount of authorized capital and the documents filed during the registration process.

Check the company registration fee yourself by Using the RJSC Calculator.

REQUIRED DOCUMENTS

NAME CLEARANCE

For the incorporation of a private limited company in Bangladesh, obtaining a name clearance from the Registrar of Joint Stock Companies and Firms (RJSC) is mandatory. Applicants must submit a name clearance application along with the proposed company name to RJSC. Upon approval, this clearance confirms that the name does not closely resemble any existing company names or trademarks.

MEMORANDUM AND ARTICLES OF ASSOCIATION

The Memorandum of Association (MoA) and Articles of Association (AoA) are crucial documents for company registration. The MoA should outline the company’s primary business objectives and include details such as the amount of authorized and paid-up capital, and a list of shareholders with their respective shareholdings. RJSC requires the object clause in the MoA to be concise, typically within 1000 words and limited to 7 clauses. Both the MoA and AoA must be drafted carefully to define the company’s constitution and operational framework.

SHAREHOLDERS AND DIRECTORS PARTICULARS

Detailed particulars of shareholders and directors are necessary for the registration process. This includes their full names, addresses, parents’ names, passport details, and photographs. If the directors or shareholders are Bangladeshi nationals, their National ID (NID) and Tax Identification Number (TIN) are also required. For foreign nationals, passport copies must be submitted.

REGISTERED ADDRESS

A local address in Bangladesh must be provided as the registered address of the company. This address can be either residential, commercial, or industrial. It serves as the official address for all formal communications and legal notices.

SIGNED FORM IX AND SUBSCRIBER PAGE

Form IX, which is the consent of the director to act, along with the subscriber page, needs to be filled out and signed by the proposed directors. These documents confirm the willingness and consent of the individuals to act as directors of the company. Scanned copies of these signed documents are required for submission to RJSC.

ENCASHMENT CERTIFICATE

An encashment certificate is issued by the bank once the share capital is remitted by the shareholders. This certificate is crucial as it verifies the amount of foreign remittance received by the bank, which is a mandatory step for foreign investors or companies with foreign shareholding. The certificate must be submitted to RJSC as part of the registration documentation.

REGISTRATION PROCEDURE

STEP 1: NAME CLEARANCE

The first step to initiate the registration of a private limited company in Bangladesh involves obtaining a name clearance. Now visit www.roc.gov.bd to create a username and apply for name clearance. After applying, a bank payment slip is issued, and BDT. 500 (Fee) + BDT. 75 (VAT) needs to be paid at the designated bank. Once payment is confirmed, the RJSC website will update the status to show that the name clearance has been granted and the Submission status shown: Approved.

STEP 2: BANK ACCOUNT OPENING AND BRINGING IN THE PAID-UP CAPITAL

Following name clearance, the next step is to open a bank account in the proposed company’s name with any scheduled bank in Bangladesh. This account will act as the primary financial hub for the company’s operations. After the account is opened, the foreign shareholder must remit funds equivalent to their shareholding into this account. This capital injection is a critical prerequisite for the incorporation process, demonstrating the shareholder’s financial commitment to the company.

STEP 3: UPLOADING DOCUMENTS ON THE RJSC WEBSITE

Once the bank account is operational and the paid-up capital has been injected, the next step involves uploading the necessary documents to the RJSC website. This includes scanned copies of Form IX and the Subscriber Page, along with the Encashment Certificate, which confirms the foreign currency has been converted and deposited into the company’s bank account.

STEP 4: VERIFICATION OF ENCASHMENT CERTIFICATE

After the documents are uploaded, the RJSC conducts an initial verification. If the RJSC officials are satisfied, they will issue a letter to the bank that provided the Encashment Certificate to confirm the authenticity of the funds. Upon receiving a positive response from the bank, RJSC moves forward with the final steps of the registration process.

STEP 5: INCORPORATION

Once all verifications are complete and RJSC is satisfied with the documentation and the legitimacy of the financial transactions, the final step is the issuance of the incorporation documents. RJSC will digitally sign and issue the Certificate of Incorporation, Memorandum of Association (MoA), Articles of Association (AoA), and Form XII. These documents are then sent to the email address associated with the RJSC account, officially marking the completion of the company registration process.

BENEFITS OF LTD COMPANY

• Limited Liability: Protection of shareholders’ personal assets from company debts.
• Enhanced Credibility: Establishes a professional image and fosters trust with stakeholders.
• Access to Funding: Facilitates securing loans and attracting investments. 
• Business Continuity: Ensures the company’s existence remains independent of its founders.

POST-INCORPORATION REQUIREMENTS:

After registration as a private limited company, the following things have to be managed properly.

SHARE CERTIFICATES AND REGISTERS

After incorporating a private limited company in Bangladesh, it is essential to issue share certificates to each shareholder. These certificates serve as proof of ownership and include details such as the number of shares owned, the type of shares, and the date of issue. The Company Secretary, responsible for compliance, issues these certificates, which must be signed by two directors or, in the case of a single director, by the director and the Company Secretary. Additionally, companies must maintain a Share Register Book to record all share transactions and transfers, ensuring that all details are up-to-date and accurately reflect the current shareholders.

COMPANY SEALS AND RUBBER STAMPS

Another post-incorporation requirement is the acquisition of a company seal and rubber stamps. These items are crucial for validating official documents and contracts. The company seal, often required by law, is used to emboss documents to confer authenticity. Rubber stamps, on the other hand, are used for day-to-day operations such as endorsing cheques and other routine paperwork.

APPLYING FOR A TRADE LICENSE, TAX IDENTIFICATION NUMBER (TIN) AND BUSINESS IDENTIFICATION NUMBER (BIN)

To operate legally in Bangladesh, newly incorporated companies must apply for a Trade License,  Tax Identification Number (TIN), and Business Identification Number (BIN). The Trade License is obtained from the local government and is mandatory for conducting business activities. The process involves selecting a commercial space, either through purchase or lease, and then applying for the license.
Simultaneously, companies must register for a TIN and BIN, which is issued by the National Board of Revenue (NBR). The TIN and BIN are critical requirements for tax and VAT compliance and can be obtained either manually or electronically. The electronic version, known as E-TIN and BIN, is more convenient and can be acquired by submitting an application through the NBR’s official website. Necessary documents for TIN and BIN registration include a copy of the Trade License, the Company Incorporation Certificate, and the Memorandum and Articles of Association and Bank Statements (Bank Statements required for BIN registration). It is essential to ensure that all documents are in order and submitted correctly to avoid delays.

RETURN FILING REQUIREMENTS

ANNUAL RETURN

Every private limited company in Bangladesh is required to submit an annual return to the Registrar of Joint Stock Companies and Firms (RJSC). This return must be filed following the Annual General Meeting (AGM), which should be held within 18 months from the date of the company’s incorporation. Subsequently, no more than 15 months may elapse between one AGM and the next. The annual return includes Schedule X, which contains a summary of share capital and lists of shareholders and directors. This must be submitted within 21 days of the AGM. Additionally, the company must file its balance sheet and profit & loss account within 30 days of the AGM.

REGULAR RETURN

In the event of any changes within the company, such as alterations in the board of directors, the shareholder structure, or other significant amendments, a regular return must be filed. This return should be submitted to the RJSC within a specified period to ensure that the company’s records are up-to-date. The forms required for such filings include Form III for notices of consolidation, division, subdivision, or conversion into stock of shares, which must be filed within 15 days of the change. Changes to the registered office must be reported using Form VI within 28 days of the change.

ADDITIONAL FILING REQUIREMENTS

Private limited companies are also obligated to file various other documents depending on specific circumstances:

• Form IX, regarding the consent of directors to act, must be submitted within 30 days of appointment.
• Form XV, concerning the return of allotment, should be filed within 60 days of allotment.
• For any mortgages or charges created or modified, Form XVIII and Form XIX must be filed within 21 days of the creation or modification.

These requirements ensure that the RJSC has all the necessary information to maintain accurate and current records of all registered companies in Bangladesh.

CONCLUSION

Throughout the detailed journey of establishing a private limited company in Bangladesh, we have navigated the intricate landscape of pre-registration criteria, the pivotal role of the Registrar of Joint Stock Companies and Firms (RJSC), and the crucial steps for achieving a successful registration. The structured step-by-step guide underscores not only the importance of meticulous planning and adherence to legal requirements but also highlights the significance of understanding the nuanced roles of directors, shareholders, and the criticality of capital requirements. This comprehensive exploration empowers entrepreneurs with the essential knowledge to embark on their business ventures with confidence and legal acumen.