Since the Registration House (RJSC) has been largely digitalized, the process for registering a private limited company in Bangladesh might not be as difficult as it once was.
But before going ahead and incorporating a company in Bangladesh, it is strongly advised to choose a consultant for the drafting, consolidating, and liaison.
One of the most popular options for starting a business when it comes to entity formation in Bangladesh is to turn to forming a private limited company there.
A private limited company can be formed in Bangladesh or a branch office can be registered, which are the two most popular and practical ways to launch a business in Bangladesh.
The process for formatting a private limited company in Bangladesh is described below:
An Clarification Of A Private Limited Company
According to section 2(q) of the Companies Act of 1994, a private company is one whose articles of association limit the transferability of shares, limit membership to fifty and forbid going to invite the general public to sign up for shares or debentures of the company.
What characteristics are listed in the Companies Act of 1994's definition of a Private Limited Company?
The Companies Act of 1994 lists the following attributes of a Private Limited Company:
The minimum number of members is two [Section 5];
The maximum number of members is fifty the minimum number of members is two [Section 5]; the maximum number of members is fifty (50),
Excluding those who are employed by the Company [Section 2(q)];
The number of directors must be at least two [Section 90(2)];
The invitation of the public to subscribe for the Company's shares or debentures is prohibited [Section 2(q)];
It is not required to comply with the stipulation of a statutory meeting or report [s. 83(12)];
It is exempt from the stipulation of a statutory meeting or report [s. 83(12)];
A Private Company can start doing business as soon as it registers with the RJSC, subject to obtaining other licenses listed in the post registration section of this document.
How Can A Private Limited Company Be Incorporated In Bangladesh?
The Companies Act of 1994, which deals with the legal requirements of company incorporation, does not provide a step-by-step process on how to set up a company.
This fact must be understood in order to comprehend the process for incorporating a private limited company in Bangladesh. The RJSC, the appropriate body, handles it.
On its official website, it offers detailed instructions on how to set up a company, from name clearance to formation.
Below is a step-by-step description of how to register a private limited company with shares in Bangladesh:
Step 1: Obtain the Name Clearance Letter
Application for name clearance to RJSC with the supporting documentation listed below
A form of application;
A proposed name.
Step 2: Preparing the documentation
Creating the necessary documents, such as the articles of association and the memorandum of articles;
A decision by the directors to establish a new corporation in Bangladesh;
Obtaining and completing the forms below in order to register the Company with RJSC:
Form I: Declaration of Company Registration;
Form VI: Notice of Registered Office Situation;
Form IX: Acting director consent;
Form X: List of individuals signing to serve as directors;
Form XII: Information about the managing agents, manager, and directors.
Step 3: Formalities related to a bank account
Directors are required to open a temporary bank account in the proposed company's name with any listed bank;
Making a capital deposit into the bank account;
An encashment certificate from the bank stating that the required capital contribution amount has been properly transferred to the proposed organization's temporary bank account.
Step 4: Documents are submitted to RJSC
Application to RJSC along with the enforceable documents listed above.
Post-registration requirements for a private limited company with shares:
Trade Permit
The applicable City Corporation must grant the Companies a trade license. The proposed Company is obligated to submit its application, along with the necessary paperwork and fees, to the closest city corporation.
Tax Identification Number (TIN)
The National Board of Revenue's suggested website must be used by a business to obtain an E-TIN (NBR).
Certificate of VAT Registration
The newly formed Company must obtain a VAT registration certificate. In this regard, the National Board of Revenue must receive the application (NBR).
Certificate of Fire
The Bangladesh Fire Service as well as Civil Defense Authority issues fire certificates.
Certificate of Environmental Clearance
A company must obtain an environmental security clearance from the Department of the Environment.
How Much Time Does Incorporation Take?
The certificate of incorporation (also known as the company registration certificate) is typically provided by RJSC within 6 to 8 working days after the aforementioned formalities have been completed.
Once all the necessary paperwork has been submitted to RJSC, it typically takes two to three weeks to register a business.
Once a name clearance has been obtained, it is good for six months. The average time needed to obtain a name clearance is three working days.
A bank account must be opened after acquiring the Name Clearance certificate, into which the initial paid-up capital must be moved from the shareholders' account.
If there is any foreign investment, the paid-up capital amount must be transferred through the recently opened bank account according to the correct protocol.
Fees Connected With Incorporation
The amount of Authorized Share capital determines the government fees for the Company's registration. Governmental fees for the issuance of an incorporation certificate shall be BDT 1000.
FAQs
Does Ltd have one owner?
Ans: At least one stockholder, who may also serve as a director, is required for a limited by shares. If you are the only stockholder, you will have full ownership of the business. There is no upper limit on shareholders.
Can I start a limited company alone?
Ans: A limited company may be formed by a single person who will serve as both the company's sole shareholder and director, or by a number of shareholders. Creating a limited company has several benefits, including: obligations, including debts or legal actions.
Can Ltd have 2 directors?
Ans: A company's sole shareholder and director may be the same person. Alternately, a corporation may, both at the time of its founding and at any time afterwards, have more than one director and shareholder.
