Private Limited Company Registration | Incorporation Procedure in Bangladesh
According to the Companies Act 1994, A private limited company in Bangladesh is a separate legal entity and any person (foreign or local) above the age of 18 can register a company in Bangladesh.
As per section 2(q) of Companies Act 1994, A Private Company is a Company which by its Articles of Association restricts the right of transfer of the share, limits the number of members to fifty, and prohibits invitation to the public to subscribe to the shares or debentures of the Company.
The step by step process of registration of a private limited company in Bangladesh is given below: -
STEP 1: Pre-Registration Documents:
- OBTAIN NAME CLEARANCE LETTER | The name must be approved (cleared) before the incorporation of the company in Bangladesh.
- DIRECTORS: Minimum of two directors are mandatory for a private limited company. Directors can be either local or foreign nationals.
- SHAREHOLDERS: A private limited company in Bangladesh can have a minimum of 2 and a maximum of 50 shareholders. A director and shareholder can be the same or a different person, another legal entity.
- PAID-UP CAPITAL: Paid-up Capital is the amount of money a company has received from shareholders in exchange for shares of stock. The minimum paid-up capital for registration of a Bangladeshi company is Taka 1 (local) and USD 50000 for a foreign-owned company.
- AUTHORIZED CAPITAL: Authorized Capital is the maximum amount of capital a company is authorized to raise from its shareholders by issuing shares to them. It is not mandatory for a company to issue its entire authorized capital in the public subscription. It may choose to issue capital at different stages as per the needs and demand. However, for practical reasons and to obtain full flexibility regarding expatriation and bringing in foreign expatriates a minimum of USD 50000/- is required to be invested in the Company.
- REGISTER ADDRESS: A registered office is the official address of an incorporated company, association, or any other legal entity. The registered address must be a physical address and cannot be a P.O. Box.
- MEMORANDUM AND ARTICLES of ASSOCIATION: The company to be incorporated must have its own Memorandum of Association and Articles of Association.
STEP 2: Required Documents for Company Registration in Bangladesh:
For the purpose of company incorporation in Bangladesh, the following information is required by the RJSC:
- Company Name: A name clearance must be obtained.
- Memorandum of Association and Articles of Association: RJSC requires that the object clause in the Memorandum of Association has to be within 400 words and 7 clauses.
- Shareholders Particulars: A copy of the National Passport is required if the shareholder is a Bangladeshi citizen.
- Particulars of the Directors, including the Tax Identification Numbers are required.
- Registered Address.
- Signed Form IX and Subscriber Page: Signed and scanned copies in pdf are required.
- For foreigners: Copies of passports of shareholders and directors are required.
STEP 3: Bank Account Opening and Bringing in the Paid-Up Capital:
This step is only applicable if the proposed company has a foreign shareholding.
A bank account will have to be opened 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 shareholders from outside of Bangladesh has to be remitted into the account. The Bank will issue an Encashment Certificate which will be required by the RJSC for incorporation.
STEP 4: Registration of the Company:
The last step is to submit all the required information on the RJSC’s website. After submission, a bank payment slip will be received for paying the registration fees along with stamp duty.
After making the payment in the bank, the application for the registration process is completed. Regular follow-up of RJSC has to be carried out in order to obtain the Certificate of Incorporation. RJSC officials will check the documents and information. If they are satisfied, they will issue the Certificate of Incorporation.
STEP 5: Post-Registration Formalities
- Certificate of Incorporation: RJSC will issue a Certificate of Incorporation of the company. The certificate will have the registration number, name of the company, and date of incorporation.
- Form XII: Form XII contains the list of directors of the incorporated company.
- Certified copies of Memorandum of Association and Articles of Association.
Applying for Trade License, Tax Identification Number, VAT registration, and other licenses:
After the incorporation, the company should either purchase a commercial space or rent some space in any commercial area.
Other Licenses, Permits and Registration:
Registration with any Chamber of Commerce & Industry is optional but mandatory for obtaining either Import Registration Certificate (IRC) or Export Registration Certificate (ERC). Import Registration Certificate (IRC) for commercial purposes or for industrial raw materials by making application to the Chief Controller of Import & Export in the prescribed form Export Registration Certificate (ERC) by making application to the Chief Controller of Import & Export. BIDA recommendation is needed for the issuance of Industrial IRC.
Any other license depending on the nature of any particular business activity.
Return Filing Requirements:
- Annual Return: Each calendar year, an Annual General Meeting (“AGM”) must be held. The AGM must be conducted within 18 months of company incorporation, after which no more than 15 months can elapse between one AGM and the next.
- Regular Return: In case of any change in the board of directors or in the shareholding structure or any other change, a relevant return must be filed with the RJSC within a certain period of time.