So are you looking to go to business with your friends? Maybe you are looking to start a partnership firm? In that case, you will need to register yourselves under the partnership firm registration in Bangladesh.
This article will share all the information you need to have and the guide through the registration process. Follow our guide to make the registration process simple and seamless.
What is a Partnership Firm?
A partnership firm is exactly what it’s called. It’s a business where friends or like-minded people team up to run together and share the profit. In Bangladesh partnership firms fall under the Partnership Act, 1932. The law states that a partnership is where people work together and divide the profit they make among themselves. Each person will be a partner and together they will be a firm. The business name is the “firm name”.
If you are having trouble understanding everything, no worries you aren’t the only one. For easier understanding let us look at an example.
Imagine Tanha loves cooking pizzas and she wants to sell her pizza creations. Now imagine Syed and Akbar have a burger shop but aren’t making enough money. Tanha goes to them and suggests selling her pizzas. Syed and Akbar love the idea of selling pizzas and making money. So the three people agree to work together and share the profit they earn.
The three people rebranded, went by “Pizza and Burger Joint” and are now a partnership firm. Syed, Akbar, and Tanha are its partners. By becoming partners the three people are now able to become more profitable. They each share their individual skills to bring in more customers and make more money. All three will be able to share profits and losses more easily.
But for this partnership to be successful they need to sign and register their partnership. Without doing so Syed and Akbar might run away with the profits and Tanha will be left penniless. Tanha won’t be able to take legal actions because there isn’t a partnership agreement. That was an extreme example but it should get the point across.
Important Elements of Partnership Law in Bangladesh
In Bangladesh, the partnership law has several important parts. Here are those parts:
- Partnership Agreement: Partnerships happen when people agree in writing.
- Definition of Partnership: Just calling someone a partner isn’t enough; there must be a written agreement.
- Profit Sharing: Sharing profit with someone doesn’t automatically make them a partner.
- Family Businesses: Families working together or married couples in business aren’t considered partners.
- Definition of Business: Business means regular work to make money, not just a one-time thing.
- Number of Partners: A partnership needs at least 2 people but not more than 20.
- Types of Partners: Partners can be regular people or companies.
- Types of Partnerships: Partnerships can be for a specific time, a project, or ongoing.
- Roles in Partnership: Each partner is like both a boss and a helper to others.
- Decision Making and Responsibility: Partners make decisions together and share responsibility.
- Joint Liability: If one partner does something wrong, all partners could be in trouble.
- Individual Responsibility: Partners can be held responsible individually for their own actions.
- Liability for Partners: If someone owes money or does something wrong, all partners may have to pay or fix it together.
Now that you know about all parts of a partnership in Bangladesh we can move to the main part of the article. Let us now go over partnership firm registration in Bangladesh.
Partnership Firm Registration in Bangladesh
Here is how you can complete the partnership firm registration in Bangladesh:
- You need to start the partnership firm registration by deciding the name of your business. You must also check if the name is available by visiting the Registrar of Joint Stock Companies and Firms (RJSC). If available you need to create an account with the name and have it confirmed. To reserve the name you need to follow the instructions on the website and pay a required fee at a particular bank.
- Once the firm name is confirmed, the partners must create a Deed of Partnership. We will discuss it later.
- Write the Deed of Partnership on a non-judicial stamp valued at 4000 taka.
- Notarize the Deed of Partnership with a Notary Public, who is usually an Advocate.
- Pay the registration fee to the RJSC to officially register your firm.
- Along with paying the registration fee you need to submit the following:
- Copy of the Deed of Partnership
- National ID cards of the partners
- Photos of the partners
- Confirmation document for the chosen name
- Proof of payment for registration
- Any other necessary documents depending on the type of your business.
Deed of Partnership
The Deed of Partnership is one of the most crucial pieces of document that must be created with careful considerations. You will require assistance of skilled business setup lawyers to ensure all the key parts are covered and noted. The partners and the lawyers should discuss every part and make adjustments. This will ensure future conflicts are less likely and business operates smoothly.
The deed will also have the following:
- Firm name and address.
- Names and addresses of partners.
- Type and nature of the business.
- Capital amount, Interest on Capital, Drawings, Interest on Drawings.
- Profit-sharing ratio.
- Partner salaries.
- Accounting period.
- Recording methods and safekeeping of books.
- Audit procedures.
- Start date of partnership, duration, and dissolution methods (if applicable).
- Bank account regulations.
- Procedures for admitting new partners or dealing with partner death.
- Dispute resolution.
- Meeting rules and bylaws.
Cost of Partnership Firm Registration in Bangladesh
The total cost of partnership firm registration in Bangladesh will vary. Here is an accurate estimate of how much you need to pay:
- Name Clearance fee: 575 taka
- A deed of Partnership by an expert advocate starts from 10,000 taka
- Non Judicial stamp (120 Taka X 40) : 4800 taka
- Printing + Notary fee: 2500 to 5000 taka
- Transport and others: 1000+ taka
- RJSC Govt. Fee: 5750 taka
- Misc. expenses: 5000 taka
Conclusion
Partnerships in business can be very effective and beneficial but only if it’s in writing and registered. Our guide to partnership firm registration in Bangladesh is comprehensive so you should have an easier time if you follow it.
There are many important parts to partnership in Bangladesh that you need to be clear on and follow for the best results. You should also hire the best business lawyers in Bangladesh to ensure your Deed of Partnership and other business documents are clearly written. Otherwise, you or your partners might fall in hot waters.