Want to start your own business in Bangladesh? A smart first step is to form a private limited company. It provides your business with a legal identity and secures your personal finances. Registration is handled by the RJSC and is now primarily online. Although it consists of multiple steps, it is not difficult to grasp the steps and make it manageable.
Legal Advice BD is here to guide you on how to open a limited company in Bangladesh. Keep reading!
Benefits of Opening a Limited Company in Bangladesh
Separate Legal Identity
A limited company is an independent legal entity. It is separate from its owners, also known as the shareholders. The company can own property, take and be taken to court, incur debt, and be sued.
Limited Liability
It is a significant legal benefit. Liability of shareholders is confined to the amount they invested in the company. Creditors can claim the assets of the company only in case the company experiences financial losses and/or in case it is sued. Your personal property, such as a house or a car, is insured.
This shield will provide confidence in taking risks in business, as the individual will not get into personal financial ruin.
Perpetual Succession
The firm has an unending succession. This implies that its existence is not influenced by death, bankruptcy, or transfer of shares by any shareholder. It is still going by the original name of the company. It can only be ended by a formal legal procedure of winding up. This gives the investors and customers stability and confidence.
Easier Access to Capital
A company that is a limited liability corporation can more easily raise capital compared to a sole proprietorship. It can accomplish this through new shares to current or new shareholders.
Lending to incorporated entities is also favored by financial institutions. Its distinct status permits the company to borrow funds in its name with the company’s assets as security.
Increased Credibility and Trust
The business is registered by the Registrar of Joint Stock Companies (RJSC), and this enables it to be recognised legally.
A limited suffix is an additional element of credibility and formality. A company registered is regarded as more reliable and stable by customers, suppliers, and partners.
When are You Eligible to Open a Limited Company in Bangladesh?
Minimum Number of Members
To form a private limited company, you need at least two shareholders. You may have as many as fifty shareholders. A private limited company cannot be established by a single individual.
In the case of a public limited company, you require a minimum of seven shareholders. A public company does not have a maximum limit.
Director Requirements
A private limited company will need at least two directors. Minimum one of these directors should be a Bangladeshi resident. The age of a director should also be 18 years. They must be of sound mind. They should not be bankrupt.
Directors are in charge of the company’s affairs. They are required to serve the best interests of the company.
Minimal Capital Requirement
The law in Bangladesh has no minimum capital that all companies have to possess. You are to determine the authorized capital of your company. In this case, this is the highest amount of shares that the firm can issue. You are also obliged to determine the paid-up capital.
These amounts should be mentioned in the Memorandum of Association of the company.
Registered Office Address
The registered office of every company is required to be in Bangladesh. All legal notices and mail are received through this. Such an address should be evidenced during registration. This may be a utility bill or a rental.
Company Name and Objectives
The name of your company has to be unique. It can not be the same or too close to the name of an existing company. It has to be approved by the Registrar of Joint Stock Companies (RJSC). The objectives of the company contained in the Memorandum of Association should be legal.
Get expert insights on managing emergencies by checking out How to Handle Crisis Management in Bangladesh.
A Comprehensive Guide on How To Open A Limited Company In Bangladesh
Name Clearance and Reservation
To begin with, select a name that is special to your company. Send this name to the Registrar of Joint Stock Companies (RJSC) to be cleared.
The name should not be the same or too close to any other company running. It should be terminated by (Private) Limited. The name is held by you once granted over a specified time.
Writing Founding Documents
You need to prepare two important legal documents.
The Memorandum of Association (MOA) provides the objectives and structure of the capital of the company. Inside regulations of how to run the company are found in the Articles of Association (AOA). The first shareholders and directors must sign these documents.
Digital Submission and Fees
Register incorporation using the online portal of the RJSC. You will require digital signatures of the directors. Send scanned MOA, AOA, and other forms.
Another step is to remit the stipulated registration fees and stamp duties at this time. The fees necessary are based on the authorised capital of your company.
A Certificate of Incorporation
All the documents that are presented will be reviewed by the RJSC. If the issued documents are proper, they will issue the Certificate of Incorporation. This certificate is a legal birth document of your company.
It establishes that the company is an independent legal entity. This date is the date of the existence of company.
Post-Incorporation Compliance
Once you have the certificate, you have to finish other legal formalities. Open a company corporate bank account. Apply to register for Taxes (TIN) and VAT with the National Board of Revenue (NBR).
Get a business trade license from your local city corporation. Legal operation is obligatory with these steps.
Conclusion
Registering a company in Bangladesh is a straightforward process. It involves proper planning of your papers. Your primary submission tool is the RJSC site. Do not overlook the post-incorporation steps. It is essential to open a bank account and a trade license. You may also consult a lawyer or consultant. This can simplify the process.
Hopefully, this guide on how to open a limited company in Bangladesh has been insightful! You are now ready to start your limited company. Best of luck!