Whenever someone thinks of opening a private company, they become worried about the uncertain path ahead. Many think that registering such a company is complicated, and they will fall into unintelligible difficulties. Nothing can be more wrong. With every resource essential for a private limited company registration available online, the process is simpler than ever.
However, failing to meet certain regulatory boundaries and stepping into the wrong spots may make it lengthier. Being knowledgeable and getting the right advice are the only solutions. Here is a detailed guide for registering a Private Limited company in Bangladesh that describes every small thing you need to know for your company’s incorporation.
Business Types in Bangladesh
There are five different ways you can start a business in Bangladesh. Each of them is accepted by the Bangladeshi legal authorities and modelled by a set of clearly defined rules and boundaries. They are:
Private Limited: Typically owned by 2 to 50 shareholders. Liabilities and rights of each owner stand upon the size of his shareholding.
Public Limited: Can be distributed among a maximum of 7 shareholders. Company owners can sell shares of such companies to the public and raise funds.
Branch Office: Run with the same legal authority as its parent company. Branch offices are local or foreign extensions of an already established company with a different base office.
Liaison Office: Liaison offices are set up, generally by foreign companies, for non-commercial purposes. Such purposes include promoting businesses, researching the market, surveying, and connecting with local companies.
Sole Proprietorship: Proprietorship businesses are run by a single person, holding them as the sole liability bearer.
Having even a brief understanding of them will help you realize the privileges of registering a private limited company in Bangladesh. Now let’s elaborate on the Private Limited company to better understand its business structure.
Private Limited
This is perhaps the most common business model in Bangladesh. Its binding of liabilities is comparatively tolerable and sets a ground for easily conductible entity formation. The Bangladeshi Law accepts private limited businesses as an independent and authoritative legal entity.
That means the owner or the shareholders of the business don’t bear judicial or financial liabilities. If the company is sued or in debt, the owners won’t be personally charged for it. Any penalty will be carried out from the company’s fund.
Outstanding Features
- Formed with 2 to 50 shareholders
- Recognized as an independent legal entity
- Liabilities of the shareholders are limited as they don’t share legal responsibilities of the company
- Liabilities are limited by shares. That means legal or financial credits will only affect their invested assets
Key Requirements for Private Limited Company Registration in Bangladesh
You will be surprised at how little it takes to be eligible to register a business in Bangladesh. Moreover, you will find that getting access to documents that sound critical at first is possible through rather simple steps. Let’s know everything you need for your entity formation:
Shareholders and Directors
According to the Companies Act 1994, a Private Company must have at least 2 or a maximum of 50 shareholders. All shareholders may equal or vary in the size of their shares, but they will bear equal rights in decision-making and governance.
The company law also allows private companies to have up to 2 directors to represent the entire body of shareholders and approve or authorize decisions made upon everyone’s accord.
Registered Name
A company must have a name registered by the Registrar of Joint Stock Companies and Firms (RJSC). The name should possess certain attributes like uniqueness, novelty, and characters approved by the RJSC.
Registered Address
During your company’s registration process, you will be required to provide a registered address for your company. The registration must be authorized by the RJSC. If you don’t have a prior assigned address, you can easily register one by:
- Visiting the RJSC website
- Providing your address information in the Notice of Situation of Registered Office, Form VI
Memorandum of Association (MoA)
Shareholders must prepare a Memorandum of Association (MOA) following the RJSC guidelines. Usually, MoA entails describing a company’s goals, visions, operational scope, and purposes in a detailed format. The key information to be included in an MOA:
- Registered company name
- Registered office address
- Statements of purpose
- Description of the shared liability of each member
- Description of authorized capital
Articles of Association (AoA)
Before applying for registration, shareholders must set internal rules and regulations, clarifying managerial and administrative hierarchy and the roles of each participating member. An AoA must also be explanatory in outlining the structure of the company and authoritative in setting the liability of the shareholders. It must also align with the RJSC guidelines.
Forms
There are 5 specified forms that shareholders must fill out and submit via online or in-house RJSC office.
- Form I: Declaration of compliance: The RJSC Form I is, by nature, an assurance from the owner or assigned legal representative on the completion of every prerequisite for registration under the Companies Act, 1994.
- Form VI: Situation of registered office: The RJSC Form VI is used to register the office address, detailing its current location, or to provide information about any changes in the current registered office address.
- Form IX: Consent to act as director: The RJSC Form IX specifies the names of the directors and collects their consents to carry out their roles described in the AoA.
- Form X: List of persons consenting as directors: The RJSC Form X is the list of the names who gave consent to serve as directors.
- Form XII: Particulars of directors: The RJSC Form XII specifies the names of the directors, manager, managing agents, and other personnel with liability and authority to make decisions of the company.
TIN
A TIN or tax identification number is a 12-digit code assigned by the National Revenue Board (NBR). Every company must get a TIN as directed by the Companies Act, 1994. It will streamline every step forward, letting them have safe and trackable transactions.
Authorized Capital
Authorized capital refers to the maximum amount of investment that shareholders deposit as their initial capital. Currently, the Bangladeshi judicial system doesn’t require a minimum deposit obligation. But it’s a common practice to invest a minimal amount.
Step-by-Step Guide to Private Limited Company Registration
Now, get into the actual registration process that will, if executed with caution, ultimately reward you with an incorporated business. Every step has a detailed explanation of the procedure and attached resources to make your business formation easier for you. Let’s delve into them:
Name Clearance
First, a company needs its name so that it can be addressed in official and legal documents. To ascribe a name such authority, owners must register it through the Registrar of Joint Stock Companies and Firms (RJSC). The process of authorizing a name is called “name clearance”. The general steps of clearing a name are simple. You have to:
- Pick a unique name relevant to your company’s service
- Apply to the RJSC to clear the name. You can apply online by visiting http://app.roc.gov.bd. Find the detailed online registration process here.
- RJSC will check if the name is available and not owned by any other companies
- If the name is found similar to or close to the expression of other businesses’ names, RJSC may decide not to clear it
- On the occasion of your name being unique in spelling and expression, RJSC will issue its clearance certificate
- RJSC will ask for service money for delivering the certificate
- Upon the clearance, and the charge is paid, RJSC will give you a 30-day window to register your business name
- The validity window can be extended by paying an extra charge
Preparing the Essential Documents
The second step of the registration process is to acquire all the documents and their formats from the official RJSC website. Some of the documents need preparation, such as:
- Memorandum of Association, and
- Articles of Association
And the rest of the documents are primarily forms (mentioned in the above requirement section) that require information about managerial and administrative structure and personnel.
Preparing a Bank Account for Initial Transactions
At this stage, shareholders need to open a bank account in the name of the company. The bank may require specific documents, like
- Memorandum and Articles of Association
- Name clearance certification
Once the account is ready, shareholders may deposit their initial capital, which will later be called registered cash or authorized capital after receiving the approval of the RJSC. It is notable that the judicial authority doesn’t specify a minimum amount for this initial deposit. However, the general convention is to deposit BDT 1,00,000.
Submitting the Documents
By this far, you must have prepared all the documents, forms, and certifications, and got approval from the relevant authority. Submission of these documents can be done online and offline. And both types of submissions are required.
For online submission, you have to visit the official RJSC portal and find the proper path and channel to upload the digital version of the documents.
Registration Fees and Timeline
Shareholders of the private company have to pay registration fees for name clearance and company registration. RJSC has clearly stated the amount required for each registration.
Registration Fees for Name Clearance
Owners must pay:
- BDT 100 for every suggested name
- BDT 100 for each time expansion
Fees for Private Company Registration
Company registration charges are primarily of three types:
Stamp Fees: Stamps are needed to affix on documents like Memorandum of Association, Articles of Association for authorized capital, each with varying charges. The general charge includes:
- BDT 500 for the stamp affixing on the Memorandum of Association
- BDT 2,000 for the stamp affixing on the Articles of Association, when the authorized capital doesn’t exceed BDT 10,00,000.
- For authorized capital between 10,00,000.00 up to 3,00,00,000, the affixing stamp will cost BDT 4,000
- For authorized capital higher than 3,00,00,000, the stamp charge will be BDT 10,000
Registration Fees: Registration fees include the charges for the submittable forms and for authorized capital.
- Submittable Forms: BDT 200 for each 5 forms described in the requirement sections, along with the memorandum and articles of association. They make a total payable of BDT 1200.
- Charges on Authorized Capital: Based on the size of the authorized capital shared by the owners, they have to pay:
| Authorized Capital Amount | Fee |
| BDT 20000 or below | 2,000 |
| BDT 20000 to BDT 50000 | 180 |
| BDT 20,000 to BDT 10,00,000 | 45 |
| BDT 10,00,000 to BDT 50,00,000 | 24 |
| Every Additional BDT 1,00,000 | 45 |
General Timeline
From name clearance to getting the incorporation certificate, it may take up to 6 weeks or around.
Post-Registration Requirements
The successful incorporation of your business creates its legal identity. But to function break-free, it needs more authorizations and certifications. Here are a few more essentials that you must get after completing registration:
Trade License
The proposed company must apply for and receive a trade license from their respective City Corporation. It is a mandatory submittable during the registration process.
VAT Registration Certificate
Another prerequisite for a private company registration, the VAT registration certificate is a collectible from the National Revenue Board (NBR).
Fire Certificate
Under certain circumstances, it may be required to submit a fire certificate or fire safety certificate during the company registration process.
Environment Clearance Certificate
If the newly forming company is related to a business that may have an environmental impact on their production to delivery cycle, it will need to submit an environment clearance certificate. The certificate is given by the Department of Environment.
Advantages of Registering with Bangladesh Consultant
Bangladesh Consultant is a prominent name among legal service providers in Bangladesh. We streamline your every step towards the Private Limited company registration and incorporation process. Our legal experts and consultants are seasoned professionals who know the common intricacies and judicial constraints faced by new company founders. You will find them agile and proactive in providing you with advice and solutions regardless of your issue.
By choosing Bangladesh Consultant as your legal partner in company registration, you will get:
- Quickest name clearance
- Error-free document and form preparation
- Submission to get fast approval
- Legal advice for failing to meet compliance requirements
- All the post-incorporation services
- Compliance with judicial regulations at every step
Conclusion
Entity formation is easier than you think if you know what to do and where to get the essentials. It may seem intimidating at first to look at all the requirements and obligations for a private limited company registration. Every step of the registration process, from name clearance, drafting documents, to submitting them through the right channels, looks more difficult than necessary. Because with proper knowledge and helpful guidance from Bangladesh Consultant, you will pass every step at a lightning-fast speed.
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