There are numerous ways to establish a business in Bangladesh, with Private Limited Company incorporation being one of the most favored and practical. This article will therefore explore every detail of the private limited company registration process in Bangladesh. Furthermore, this article will address the legal obligations, including tax compliance, that a private limited company in Bangladesh must fulfill following its incorporation.
The majority of companies in Bangladesh are duly registered as private limited companies. In the jurisdiction of Bangladesh, it is imperative to acknowledge that a private limited company possesses the status of a distinct legal entity.
Who can form the company: Pursuant to the provisions set forth in the Companies Act of 1994, it is hereby established that any individual, regardless of their nationality or domicile, who has attained the age of majority, being 18 years or older, possesses the legal capacity to undertake the registration of a company within the jurisdiction of Bangladesh.
Registration Authority: The Registrar of Joint Stock Companies (RJSC), also referred to as the entity of the Registrar of Joint Stock Companies and Firms, is an authorized entity of the Government of the People's Republic of Bangladesh tasked with the registration of new companies in accordance with the Company Act 1994.
Key terms to form a company in Bangladesh:
Company Name: First step is to select your name and the name must be cleared from RJSC before incorporation of the company in Bangladesh. According to Sec 11(1) of Company Act 1994, It is illegal to register a business with the same name as an existing business, or a name that looks so much like the existing business's name that it could be used to trick people. The only time this is okay is if the existing business is in the process of dissolving and gives written permission in the way the Registrar specifies.
Directors: According to Company Act (1) Every public company and a private company which is a subsidiary of a public company shall have at least three directors. (2) Every private company other than a private company mentioned in sub-section (1) shall have at least two directors; 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 which is not a natural person (i.e. a company) can select a nominee director.
Shareholders: A private limited company in Bangladesh can have a minimum of 2 and 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 anytime after the Bangladeshi company has gone through the incorporation process.
Memorandum and Articles of Association: The company to be incorporated must prepare a memorandum of association (MoA) and articles of association (AoA). You must state the authorized capital in the Memorandum of Association and Articles of Association. There is no minimum or maximum limit for authorized capital in Bangladesh.
Registered Address: In order to formally register a company under the jurisdiction of Bangladesh, it is mandatory to provide a local address that will function as the registered address of the organization. The specified location (which may include a place of business or a place of domicile) must be physical, and post office boxes are expressly prohibited.
Continued---
Next- Introduction of Private Limited and Public Limited Company
Comments (0)