How to Register a Company in Bangladesh

Choosing the Right Company Structure

It is important to choose a company type suitable for the business needs before beginning the registration process. Here’s a closer look at the common options available in Bangladesh:

Private Limited Company

A Private Limited Company is a popular choice for entrepreneurs due to its flexibility and protection of personal assets. Shareholders have limited liability, meaning their personal assets are safeguarded even if the business faces risks. It requires at least two shareholders and two directors, who can be the same individuals. It also enhances business credibility and provides easier access to capital through share issuance. This structure allows for business growth and continuity while protecting the personal interests of its owners.

Public Limited Company (Listed Company)

This structure applies to relatively big companies that require funds from the market through an offer of shares in the stock exchange. This type of company has more restrictions than the former one, and at least seven shareholders and three directors are needed.

One Person Company (OPC)

This legal reform was adopted in 2020. OPCs allow one person to set up and operate a business, making it a great option for individuals who want the privilege of limited liability. This structure lets you have a separate legal entity from your business.

For more detailed information and professional guidance, you can visit our Company Lawyer Service at Legal Advice BD.

How to Register a Company in Bangladesh

The company registration process in Bangladesh has six key stages. They all have their own set of requirements:

 

1. Obtaining Name Clearance

First, you must obtain a name clearance certificate from the Registrar of Joint Stock Companies and Firms (RJSC). This ensures your proposed company name is unique, does not resemble existing business names, and does not infringe on intellectual property rights. You can search and check the availability of your proposed name(s) through the following link: RJSC Name Search. This step is crucial in avoiding legal issues and securing your brand identity.

Fee for Name Clearance Application: The official website of the RJSC is given where you can submit your selected company name through an online portal. After applying online, the applicants are required to deposit 575 taka in a prescribed bank.

2. Documentation

• Memorandum of Association (MoA): This document will have the core objectives of your business, the specific activities you plan to undertake, and the overall scope of your company’s authority.
• Articles of Association (AoA): Your company’s legal framework and day-to-day management will be in the AoA. This will include important details like how meetings will be conducted, the voting rights of shareholders, and the processes for electing directors. The AoA makes sure everyone understands their roles and responsibilities within the company.
• Shareholder and Director Information: When registering a company, it’s essential to collect detailed information on all shareholders and directors, including full names, nationalities, phone numbers, email addresses, and photocopies of National ID cards. For foreign shareholders, passport copies are required. A full documents checklist for company registration in Bangladesh can be found in this article.
• Registered Office Address: For company registration, you need a registered office address in Bangladesh. If you don’t have a physical office, Legal Advice BD offers temporary office addresses to help you fulfill this requirement.
• Temporary Bank Account: If your company has foreign shareholders, opening a temporary bank account is essential. You’ll need the name clearance certificate and draft copies of the MoA and AoA to do so. Foreign shareholders must transfer their initial investment as a remittance into this account. There is no minimum paid-up capital for foreign shareholders, with amounts ranging from $1,000 to unlimited. Once the paid-up capital is deposited, the bank will issue an encashment certificate, which must be submitted to the RJSC to complete the registration process.

Drafting key documents like the MoA and AoA is vital to protecting your rights within the company. Using inexperienced help or generic templates can restrict these rights. Future amendments to those documents are often difficult and costly. For example, any correction of business objectives in the MoA requires High Court approval. To avoid complications, consulting an experienced lawyer is crucial. Legal Advice BD has incorporated over 100 companies and offers expert assistance. Feel free to contact us for support.

3. Submission and Paying Government Fees

Electronic Document Submission: The RJSC’s online portal streamlines the registration process by allowing electronic submission of all necessary documents, eliminating the need for physical paperwork. You will need to submit signed, soft copies of Form-i, Form-ix, and the subscriber page of the MoA. Form-i must be signed by the Managing Director or Chairman, Form-ix must be signed by all directors, and all shareholders must sign the subscriber page. Additionally, shareholders must attach their photos to the subscriber page. This process ensures a more efficient and organized company registration in Bangladesh. 

Government Fees for company registration: Pay the required government registration fees directly through the portal. These fees are generally calculated based on the company’s authorized share capital. You can use the Fee Calculator to determine the applicable fees for your company. This tool helps ensure accurate payment, streamlining the process further.

4. Verification of Encashment Certificate

If your company has foreign shareholders, an encashment certificate from the temporary bank account must be submitted to the RJSC as part of the registration process. This certificate confirms that the foreign shareholders have transferred the required capital investment. Once the encashment certificate is submitted, the RJSC will verify it with the issuing bank to ensure the capital has been received properly. This verification is crucial to finalize the company registration in Bangladesh.

However, please note that if the company does not have any foreign shareholders, this step will not be necessary.

5. Certificate of Incorporation

After thorough scrutiny, the RJSC will issue an electronically signed Certificate of Incorporation, officially granting your company legal status to operate in Bangladesh. Along with this, you will also receive electronically signed copies of the Memorandum of Association (MoA), Articles of Association (AoA), and Form-XII, which details the particulars of directors. These documents collectively establish your company as a recognized legal entity, allowing it to function in compliance with Bangladeshi laws.

6. Post-registration Compliances Checklist

Depending on your business type, you might require other licenses as follows:

• Trade License from Local City Corporation. 
• Tax Identification Number (TIN)
• VAT Registration
• Corporate Bank Account
• Income Tax Return Filing
• Annual General Meeting (AGM)
• Statutory Return Filing to RJSC
• Audit of Financial Statements
• BIDA Registration (if applicable)
• Export License (ERC) (if exporting)
• Import License (IRC) (if importing)
• Investor Visa & Work Permit Visa (if foreign company)
• Trademarks and Copyright Registration

Document Checklist for Company Registration in Bangladesh

1. Proposed company name(s).
2. Office address and email.
3. TIN for all shareholders.
4. National ID card for all shareholders.
5. Signatures & photos of shareholders.
6. Mobile numbers & email addresses of all shareholders.
7. Breakdown of authorized and paid-up capital, and share percentages.
8. Bank account operators.
9. Designations (Chairman, Managing Director).
10. Quorum requirements for Board Meetings and Annual General Meetings (AGMs).

Benefits of Registering Your Company in Bangladesh

Formalizing your business through registration offers a multitude of advantages that can empower your company’s growth:

Limited Liability Protection

Limited Liability Protection is a key advantage when registering a company in Bangladesh. It ensures that the personal assets of shareholders remain protected from the company’s debts and legal obligations. In case of financial loss or legal disputes, shareholders are only liable up to the amount of their investment in the company. This structure minimizes personal risk while allowing entrepreneurs to take bold steps for business growth. For startups and businesses in Bangladesh, this protection offers security and encourages investment.

Access to Funding

If your company is registered, you can easily get loans, investments, and other financial facilities. The longer your business has been in operation, the higher your chances are of getting funding from banks and other financial institutions.

Legal Recognition

Registration gives your company a legal personality and lets it operate legally in Bangladesh. Now you can make contracts, own properties, and perform other activities in the business aspect easily.