Company Related issue

Formation of a Private Company

Private limited companies are the most common form of companies in Bangladesh. For the formation of such a company compliance with the Companies Act 1994 is required. The registration of the company is administered by the Registrar of Joint Stock Companies and Firms (RJSC).

A private limited company in Bangladesh is a separate legal entity and shareholders are not liable for the company’s debts beyond the amount of share capital they have contributed. According to the Companies Act 1994, any person (foreign or local) above the age of 18 can register a company in Bangladesh.

Section of Law

According to the Companies Act 1994, the three steps for the formation of the Private limited company are -

a) Name Clearance-

This is an online procedure where you can apply for a ‘Name Clearance Certificate’ via the RJSC website. This ensures that there are no other company existing with an identical name to the name you have chosen for your company. After obtaining the certificate, the Registration procedure of company must be done within 30 days.

b) Bank account opening and bringing in the paid up capital-

Next, you have to open a bank account in the name of the proposed company and obtain Bank Solvency Certificate. This is a mandatory step for foreigners wishing to form such a company.

c) Company Registration-

     Documents needed are-

      -- Memorandum & Articles of Association (MoA and AoA)
      -- Declaration on Registration of Company
      -- Notice of Situation of Registered Office
      -- Evidence of Name Clearance
      -- Consent of Director to act
      -- List of Persons Consenting to be Directors
      -- Particulars of the Directors, Manager and Managing Agents
      -- Shareholders Particulars (National ID/Passport details)
   -- Special Adhesive Stamps and Treasury Challan from Bangladesh Bank to Treasury (photocopy) of Collecting the Stamps.

The Registrar of RJSC will sign and attest the documents, if satisfied, and issue-

       -- A Certificate of Incorporation bringing the company into existence
       -- MoA and AoA
       -- Form XII
       -- Share certificates for each of the shareholders
       -- Register for shareholders, shares, directors etc
       -- Company seal
       -- A rubber stamp for the company

Thus, after complying with the requirements and obtaining Certificate of Incorporation from RJSC, a private limited company can commence its business immediately.

Yet, you would also need to apply for Trade License and Tax Identification Number and may also need to obtain more business licenses depending on your company's business activities. Also, in case of Foreigners who wishes to open a company in Bangladesh, does not have to be in Bangladesh for complying the above-mentioned formalities. The only exception may be opening a bank account.