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One Person Company (OPC) Formation & Registration Procedure in Bangladesh

One Person Company (OPC) Formation & Registration Procedure in Bangladesh One Person Company [OPC] means and includes a company whose shareholder is merely a natural person [as inserted in by proposed Section 2 (Kha) of sub-section 1 of section 2 of the Companies Act, 1994]. That obliges that any natural person may incorporate an OPC for any lawful object by signing his/her name into the memorandum as the only shareholder. A natural person can only form a One Person Company (OPC).

One Person Company

The 'Companies (2nd Amendment) Act, 2020' was recently passed in Bangladesh Parliament, keeping provision for the formation of one-person companies (OPC), with only one natural shareholder. Even though the provisions in the Act do not incorporate any bar for a foreigner in forming an OPC, the particulars in the prescribed form of memorandum require NID of the shareholder, which will not be available for a foreigner, and thus a foreigner may not be able to form an OPC. The memorandum of an OPC must state the name of the nominee (with consent) who would become the shareholder of the company upon death or incapacity of the shareholder. While the Act is aiming to attract greater investment, OPC needs minimum paid-up capital of BDT 2.5 million, which may not be entirely consistent with the objective. In case the paid-up capital exceeds BDT 50 Million, the OPC has to be converted to other forms of companies.

the company formation or incorporation of company in Bangladesh
  1. Company Name:  The name must be approved (cleared) before the company formation or incorporation of company in Bangladesh.
  2. Directors: The Minimum one directors are mandatory. Directors can be either local or foreign. Directors must be at least 18 years of age and must not be bankrupt or convicted for any malpractice in the past. The law requires that a director must own qualification shares stated in the Articles of Association. A shareholder who is not a natural person (i.e. a company) can select a nominee director.
  3. 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. The shareholder can be a person or another legal entity such as another company. 100% local or foreign shareholding is allowed in most sectors. New shares can be issued or existing shares can be transferred to another person any time after the Bangladeshi company has gone through the incorporation process.
  1. Authorized Capital: You must state the authorized capital in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that the company is authorized to issue (allocate) to shareholders. Part of the authorized capital can remain issued. There is no minimum or maximum limit for authorized capital in Bangladesh.
  2. Paid-up Capital: Paid-up capital (also known as share capital) can be increased any time after the incorporation of the company. Registered Address: In order to register a company in Bangladesh, you must provide a local address as the registered address of the company. The registered address must be a physical address (can be either a residential or commercial address).
  3. Memorandum and Articles of Association: The company to be incorporated must prepare a memorandum of association (MOA) and articles of association (AOA). As per section 392A, Memorandum and Articles of Association mean and includes Memorandum and Article of Association mentioned in Schedules 9A and 9B.
  4. Meeting: As per section 392F, the Director of OPC will call at least one board of directors meeting in every half year. Amendment– As per section 392G, if any changes are made in the Memorandum and Article of Association of the OPC, the Company will notify about such changes to the Registrar of Joint Stock Company (RJSC).
  5. Transfer of shares to the natural person: As per section 392H, All shares of the OPC can be transferred to any other individuals with natural beings subject to the provision of section 38.
  6. Balance sheet: As per section 392I, in the case of OPC, within 160 days of the end of a financial year, its financial statements must be submitted to the Registrar. Each balance sheet consists of the profit and loss or income and expenditure and signed by the Director.
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