Substantive and Interim Remedies in Bangladesh

Substantive and Interim Remedies in Bangladesh

Substantive and Interim Remedies in Bangladesh in 2023

Barrister Tahmidur Rahman Lawfirm

Barrister Tahmidur Rahman
Director, The Law Firm in Bangladesh

24 Jan 2022

In this post we talk about Substantive and Interim Remedies in Bangladesh and how you can effectively deals with prayer portion of both criminal and civil matters in Bangladesh.

 

Substantive and Interim Remedies in Bangladesh

In Bangladesh, the parties to a case have access to a variety of interim remedies. Interim remedies are temporary measures that are typically granted to preserve the status quo or prevent the loss of assets.

Common applications for interim remedies include interim declarations; interim injunctions (injunctions are orders prohibiting a person from doing something or requiring them to do something); orders for the detention, custody, preservation, inspection, sampling of relevant property; sale of relevant property which is of perishable nature or which it is desirable to sell quickly for any other reason; freezing injunctions; search orders; and orders to provide informants.

Understanding the procedure:

In any court or tribunal, requesting remedies or reliefs in the prayer section of an application or petition is a vital aspect of the practice and procedure. The contents of this article are equally applicable to both criminal and civil matters, despite the fact that this article mainly focuses on criminal law.

Interim Remedies: Nature

Relief or remedies may be of three types:

(i)Main or substantive relief:

(ii)Interim relief; and

(iii) Consequential relief.

The primary or substantive relief is granted after a final hearing on the merits of the case, and consequential relief is likewise granted after a final hearing on the merits. Consequential relief is granted as a result of the main relief, such as an order regarding costs or exceptional costs. In contrast, temporary relief (e.g., injunction, directive, stay, status quo, etc.) is granted at the issue of the Rule, the initial hearing, or the admission hearing as an intermediate remedy to protect the petitioner’s interest or right.

Substantive And Interim Remedies In Bangladesh Tahmidur Rahman Remura Top Law Firm In Dhaka

 

Writ Petition in Bangladesh

  Praying for Rule Nisi (show cause notice). This Rule is the basis and beginning of substantive Wherefore, it is prayed that your Lordships may be pleased to-

The idea of natural justice requires that the opposing party be given the opportunity to respond or explain his side of the story before anything is resolved in his favor or against him. A Rule Nisi simply satisfies that natural justice need. It is a type of show that draws attention. Once an application under Article 102 of the Constitution is admitted, the phrase Rule Nisi is utilized or issued in a Writ Petition by the Special Original Jurisdiction of the High Court Division.

A Writ Petition is a specific request to the Supreme Court’s High Court Division. In writ jurisdiction, the Hon’ble Court grants instant relief against an administrative authority’s illegal or inappropriate action, as well as judicial or quasi-judicial action.

The Bangladeshi Constitution empowers only the High Court (of Supreme Court of Bangladesh) to issue writs, directives, and orders, among other things. Writ is a very powerful weapon at a citizen’s disposal, allowing him to protect his rights by submitting a petition with the Supreme Court’s High Court Division under Article 102 of the Constitution against an illegal breach of an individual’s rights. This page examines writ: its types and cases in Bangladesh.

Writ is a highly essential legal remedy available to the citizens of a welfare state for the aim of enforcing and implementing substantive law if there has been an infringement of their fundamental rights, such as an illegal act of authority, an error of law, and so on.

In Bangladesh, this right is exercised by submitting a written document, i.e. a writ petition, to the High Court Division of the Supreme Court under Article 102 of the People’s Republic of Bangladesh for its directions or orders on the topic of fundamental rights enforcement.

Following that, the court summons or orders the opposing parties, i.e. the respondent/s, to do or desist from doing something. The primary goal of writ is to protect the fundamental rights of the people and to enforce those rights.

Types of writ in Bangladesh:

The Constitution of Bangladesh refers to the following types of writs:

  • Habeas Corpus
  • Mandamus
  • Prohibition
  • Certiorari &
  • Quo-Warranto.

Here is a short explanation of these five types of writs:

Habeas Corpus:

‘Habeas Corpus’ is a Latin phrase that meaning “have his bodies.” To present the body in court. So it is a court order commanding the authorities holding an individual in custody to bring that individual into court.

The authorities must then explain why the person is being held in court. If the authorities’ answer is unsatisfactory or the detention is proven to be illegal, the court might order the individual’s release.

Thus, the writ of ‘Habeas Corpus’ is a method for ensuring the subjects’ personal liberty by providing an effective means of immediate release from unlawful or unjustifiable confinement, whether in prison or in private custody.

In Bangladesh, for example, if a person is wrongfully arrested or imprisoned, his family or friends can seek a writ of habeas corpus under Article 102 of the Bangladesh constitution. If a person is imprisoned for a murder he did not commit, his family can seek his release through a writ of habeas corpus. However, if it is proven in court that he did commit the crime, the writ is dismissed. 

Mandamus:

The purpose of mandamus is to keep public officials within their authority while performing public tasks. Mandamus can be awarded to any form of authority for any type of duty, including administrative, legislative, quasi-judicial, and judicial functions. Mandamus is known as a “wake-up call,” as it wakes up the sleeping authorities to do their duties.

Any person who seeks legal duty to be performed by a person or a body may file a petition for writ of mandamus. A filing person must have a genuine or special interest in the subject topic and the legal authority to do so. Mandamus cannot be granted against a private person or entity.

Assume that a government employee working for Bangladesh Tele-Communication Limited (BTCL) feels that his right has been violated for whatever reason and wishes to file a writ of Mandamus against that corporation.

However, if his complaint lacks adequate material and is proven to be incorrect, the writ petition will be dismissed.

Prohibition:

Prohibition is a preventive writ issued to prohibit the illegal use of jurisdictional power to the harm of a person’s legal rights. The High Court Division is authorized by sub-clause I of clause (a) of sub-article (2) of article 102 of the Constitution to direct a person exercising any tasks in connection with the business of the Republic or local authority to refrain from doing what he is not permitted by law to do.

Anyone who believes or has reason to believe that an order issued by a lower court is illegal or outside the jurisdiction of that court may file a writ petition against the court.

If the Supreme Court determines the allegation to be true, it can issue a writ of prohibition against the subordinate court.

Certiorari:

Certiorari is a Latin word that meaning “to be certified” or “to be informed of, or to be made certain about” the proceedings of any lower court or tribunal that will be scrutinized by the superior court.

The High Court Division of the Supreme Court of Bangladesh may request records of any pending or ended procedures before any authority or court, including a tribunal, for its scrutiny as to the legality or otherwise of the said processes.

A supreme court has the authority to review the processes of all lesser tribunals and rule on their authority to hear that matter as well as their decisions on legal issues. However, the lower courts’ decisions on factual issues are rarely overturned, unless a state statute authorizes a higher court to do so.


If a lesser court, tribunal, authority, or individual has previously breached the concept of natural justice, misused power, or acted beyond its jurisdiction, the higher or superior court might quash that act, i.e. declare it illegal, by issuing certiorari.

Quo Warranto

The Writ of Quo Warranto provides redress for illegal occupation or usurpation of any public office, franchise, or liberty. It allows for an investigation of the legitimacy of a person’s claim to an office or franchise, as well as removal from such position if he is a usurper.

The office holder must demonstrate to the court under what authority he holds office. Such a remedy is accessible from the High Court Division under sub-paragraph (ii) of clause (b) of sub-article (2) of article 102 of the Constitution.

The Supreme Court may issue this writ against any firm or individual if the court determines that the company or individual has no legal authority to hold the position they had. Assume that a garment industry lacks any legal authorization to operate, the court may issue a writ of Quo Warranto against that industry.

Alternatively, a Rule issued signifies that the court has accepted the Writ Application. A typical Rule Nisi is issued, “inviting the respondent to show cause why (some action) should not be judged to have been made without any legitimate authority and to have no legal effect.” An interim order may also be issued, halting the operation of the contested action for a specified amount of time or until the Rule is resolved.

For example:

“Issue a Rule Nisi calling upon the respondents to show cause as to why the Order of cancellation of Nikah Registration licence vide Memo No.

382- Bichar-7/2N-116/87(Angsha) dated 18.04.2004 (Annexure- N) issued by the Respondent No.2 and Appointment of new Nikah Registrars vide Memo No. 2124 and Memo No. 2119(4) dated 19.04.2004 (Annexure- O and 01) issued by the Respondent No.5 shall not be declared to have been issued without lawful authority and is of no legal effect and also should be declared to be in violation of the fundamental rights of the Petitioner is granted under Articles 27, 29 and 31 read with Article 102 of the Constitution of the Peoples Republic of Bangladesh.”

 

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Praying for interim relief in the form of Stay:

An intricate examination of Section 151 of the Civil Procedure Code, 1908, where the two concerns brought down are- exercise of powers to fulfill goals of justice and to prevent abuse of process.

Courts have the authority to issue interim orders with the primary goal of preventing injustice from being done to the innocent. There is no superior role or procedure that allows any organ to overrule the provisions of S.151 of the Code, demonstrating the Supreme Court’s concern in protecting justice.

In Ram Chand and Sons Sugar Mills Pvt. Ltd Barabanki v. Kanhayalal Bhargava, the contention was that several events occurred subsequent to the pending first suit, and thus the first suit was no longer useful.

The Court has such powers relative to the issuance of interim orders due to the need to be just and convenient. In general, the Court may use the Inherent Powers assigned to it to impose interim orders in order to avoid misuse of the Court process.

The Court was established to bring the goals of justice together, and a portion of this may be seen in the Court issuing interim orders.

The Court claims that such interim injunctions improve the conduct of the suit and the litigation process.

1. Issue a Rule Nisi:

A rule nisi is primarily a temporary order of the court that has no independent existence but is conditional on confirmation by the court; thus, the court lacks the ability to extend the life of a lapsed order mero motu.

For example: ” Issuing a Rule Nisi calling upon the respondents to show cause as to why the Order of cancellation of Nikah Registration licence vide Memo No.

382- Bichar-7/2N-116/87(Angsha) dated 18.04.2004 (Annexure- N) issued by the Respondent No.2 and Appointment of new Nikah Registrars vide Memo No. 2124 and Memo No. 2119(4) dated 19.04.2004 (Annexure O) issued by the Respondent No.5 shall not be declared to have been issued without lawful authority and is of no legal effect and also should be declared to be in violation of the fundamental rights of the Petitioner is granted under Articles 27, 29 and 31 read with Article 102 of the Constitution of the Peoples Republic of Bangladesh.”

2. Praying for interim relief in the form of Stay:

The main problem with granting interlocutory injunctions, whether Prohibitory or Mandatory, is that there is always the risk that the court will make the ‘wrong’ decision, either by granting an injunction to a party who fails to establish his right at trial (or would fail if there was a trial) or by failing to grant an injunction to a party who succeeds (or would succeed) at trial.

As a result, the courts have formed a key notion that usually the Court takes the option that appears to bear the lowest danger of injustice if it turns out to be wrong.

Thus, if the court believes that withholding a mandatory interlocutory injunction would result in a greater risk of injustice than granting it, even if the court does not have a “high degree of assurance” about the Plaintiff’s chances of establishing his right, there is no rational basis for withholding the injunction.

For example, a template would be:

Pending hearing of the Rule your Lordships may be pleased to stay operation of the impugned Order of cancellation ofNikah Registration licence vide Memo No. 382- Bichar-

7/2N-116/87 (Angsha) dated 18.04.2004 (Annexure- N) issued by the Respondent No. 2 and Appointment of new Nikah Registrars vide Memo No. 2124 and Memo No. 2119(4) dated 19.04.2004 (Annexure-O and O1).issued by the Respondent No. 5 may kindly be given.”

3. Praying for substantive relief:

Upon hearing the parties and cause shown, if any, make the rules absolute. A person may bring an action for a declaration of any legal character or claim to property. This is an optional relief. The law states that no such declaration shall be made if the plaintiff fails to seek additional relief other than a mere declaration of title.

 4. Praying for consequential relief:

Pass such other or further order or orders as to his Lordships may seem fit and proper.

Rule Nisi in Bangladesh:

Generally, a rule nisi is an order “to show cause”, meaning that the ruling is absolute unless the party to whom it applies can show cause why it should not apply.

A decree nisi or rule nisi (from Latin nisi, meaning “unless”) is a court order that does not have any force unless a particular condition is met. Once the condition is met, the ruling becomes a decree absolute (rule absolute), and is binding.

Typically, the decree becomes absolute unless the adversely affected party provides satisfactory evidence or argument that the decree should not take effect. For that reason, a decree nisi may also be called a rule, order or decree to show cause.

Issuing Rule Nisi is the basis and beginning of substantive relief. After receipt of causes shown, if any, against the Rule Nisi the court will hear the matter on merit and after such hearing will deliver judgment and give substantive relief.

When the rule nisi is issued, it is incumbent on the party upon whom it has been issued to appear and help the Court in the proceedings.

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Rule and Rule Nisi under the New High Court Rules, 2012:

The term Rule or Rule Nisi has universal acceptability in legal jurisprudence. However, the newly amended High CourtDivision Rules, 2012 defines and differentiates between Rule and Rule Nisi. This differentiation seems unnecessary and confusing from the view point of the universality of these terms application. If we accept this differentiation and definition correct, how can we define “decree nisi”? The definition and differentiation are quoted below:

Issuing Rule/Rule Nisi & return date:

When a Motion Bench decides to accept an application/petition for adjudication, it will pass an order for issuing a notice calling upon the respondent(s)/opposite parties to show cause on such matters and within such period as specified in the order.

An order passed on a Writ application/petition under this sub-rule may be called a Rule Nisi. In othercases, such order may be called a Rule. In every such order (Rule Nisi or Rule) the specific date of return of service shall be mentioned along with a direction to the petitioner/applicant to put in requisites within a specified time.

For details on Rule Nisi,”Rule is returnable within 3 weeks”, “Let the service of the notice is dispensed with” etc.

Interim Relief and Main Relief:

Interim Relief is ancillary to the main relief and such relief is given in aid of or ancillary to the main relief which may beavailable to the petitioner on final determination of his petition but not as a means to enable the Petitioner to initiate anappropriate legal proceeding.

The petitioner should not be granted the interim relief in such a way that he practically gets the principal or substantive relief which he seeks to obtain on final hearing of the petition.

Any declaration or direction or order to be given must be ancillary to the main relief, but in doing so the superior courtshad always placed self-imposed limitation for not raising any new issue which requires adjudication on proper fact for which no foundation was laid by the parties. 

Interim Relief when should not be granted:

The HD while passing ad-interim order or granting ad-interim relief is to see that the relief so granted does not amountto granting the entire releifs sought for in the substantive prayer in the petition.

The HD except under exceptional circumstances without hearing the other side should not grant ad-interim relief which is close to relief sought in the Writ Peittion.

The superior courts have always discouraged granting of ad-interim relief which in fact gives the primary relief sought in the writ petition Agrani Bank v Essential Garments Ltd, 26 BLD (AD) 93.

The law is now settled that if the interim relief amounts to granting of entire relief sought in the proceeding, the ad-interim relief so granted is not legally well-founded and granting of such ad-interim relief has been deprecated by the courts where judgment is binding on all courts (Para 16) AIR 1995 SC 1368.

Without issuing Rule while disposing of the application under Article 102 of the Constitution the High Court Division was not authorised in law to pass any ad-interim relief which it could pass in aid of or ancillary to the main relief upon final determination of the rights of parties Bangladesh Bank and others v. Zafar Ahmed Chowdhury and another 56 DLR (AD).

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Consequential Relief:

In Ministry of Establishment Vs. Amjad Hossain 2 CLR (AD) 107 question was raised whether the phrase in the prayerportion of a writ petition “such other or further order or orders as to your Lordships may seem fit and proper may kindly be passed permit the High Court Division to go beyond the terms of the Rule.

The Appellate Division held that theprayer to the effect “and/or such other of further order or orders as your Lordships may deem fit and proper “do not authorise a writ Court to give relief beyond the Rule issuing order, such prayer authorises the writ Court to give any incidental relief or reliefs which may follow from the main relief according the Rule issuing order.

This view from our apex court seems wrong in view of decision in Mehta by the Indian Supreme Court.

Types of Interim Relief:

Interim relief may be of different types depending On circumstances and orders of the court allowing it. Some of the common types of interim orders are briefed below:

Injunction:

Injunction is a judicial order whereby a party is required to do or to refrain from doing any particular act or maintaining status quo. Depending on the procedure injunction may be of three types: Ad-interim, temporary and permanent injunction. Again, depending on the basis of nature injunction may be of two types: mandatory and prohibitory injunction.

Stand over:

Writ, Criminal Revision, Application under 561A of Miscellaneous Jurisdiction, Application for condonation of delay- are all motions. Motions were normally unlisted but now after amendment of High Court Rules in 2012 motions are lites as ‘In re’ and they are heard on motion days in respective courts.

However, if some of the motions remain unheard on a particular motion day, they will be taken up the next day and in that case they are put on to the list as”Stand Over”. They may also come up in the list as “In Re”. Order of *stand over” is also possible by application by an advocate.

For instance, when at the time of motion hearing the court requires some information which the latter do not have, an order of stand over for a certain period of time may be passed by the Bench which effectively adjourns thematter to a late date.

Stay:

Stay means an order of the court whereby an action or effectiveness of an action is stopped until further order.

Status Quo:

“Status quo” means the existing state of things at any given time. In other words, it means the state in which anything already is. To leave a thing in status quo is to leave it unaltered, i.e., as it is. Status quo involves any undertaking not to do a certain act.

It has also been decided that an order of status quo by the court amounts to an order of temporary injunction.

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“The purpose of mandamus is to keep public officials within their authority while performing public tasks.

Mandamus can be awarded to any form of authority for any type of duty, including administrative, legislative, quasi-judicial, and judicial functions.

Mandamus is known as a “wake-up call,” as it wakes up the sleeping authorities to do their duties.

 -Meheruba Mahbub

Are you planning to do a writ or looking for criminal and civil remedies in Bangladesh?

Tahmidur Rahman Remura TLS is a full-service law firm that has been dealing with Writ-related problems on a regular basis since its inception through its qualified and experienced lawyers.

If you require any assistance or consultation, please visit our office or contact us at +8801779127165 or +8801847220062 (WhatsApp) or by email- [email protected]

E-mail: [email protected]
Phone: +8801847220062

Address: House 410, Road 29, Mohakhali DOHS, Dhaka 1206

 

FAQ

How much money is required for company registration in Bangladesh?

The governmental fees for registering a company are determined by the amount of authorized capital. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.

How long does it take to register a company in Bangladesh?

Once the aforementioned formalities have been completed, RJSC will usually issue the certificate of incorporation (Company registration certificate) within 6-8 working days.

It usually takes 2-3 weeks from the date of submission of all documents to RJSC to register a company.

What is BIDA?

Bangladesh Investment Development Authority (BIDA) is in charge of facilitating foreign investments in the country.

BIDA's responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approving remittance of royalties and technical fees, assisting in the acquisition of industrial plots, facilitating utility connections, approving foreign loans, suppliers credit, and providing assistance and advice on a variety of investment-related issues.

Foreign investors with industrial projects are strongly advised to register with BIDA after forming their limited company. However, there is no requirement for a commercial or trading company to register with BIDA. The average time frame for obtaining registration is 7-10 working days.

What documents are needed to set up a private limited company in Bangladesh?

1. Memorandum of Association
2. Article of Association
3. Certificate of Incorporation
4. Trade License
5. TIN
6. VAT Registration Certificate
7. Name Clearance
8. Environmental Clearance Certificate
9. Fire Certificate

What is the minimum capital required for a private limited company in Bangladesh?

In Bangladesh, there is no minimum or maximum authorised capital for a local company.

However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50,000/- must be invested in the Company.

Can a single person start a company in Bangladesh?

 Bangladesh does not allow a single person to open a private limited company or One Person Company (OPC).

A private limited company must have at least two shareholders. In the case of a public limited company, however, the total number of shareholders required is seven.

Can a private limited company have one director in Bangladesh?

A private limited company must have at least two directors. Local or foreign nationals may serve as directors.

Directors must be at least 18 years old and have never been bankrupt or convicted of a crime. A director is required by law to own the qualification shares specified in the Articles of Association.

What is the difference between authorised capital and paid-up capital?

- Authorised capital: The amount of authorised capital must be specified in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that a company may allocate to shareholders.  

In Bangladesh, there is no minimum or maximum authorised capital for a local company. However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50000/- must be invested in the Company.

-Paid-Up Capital : The minimum paid-up capital for registering a Bangladeshi company is Taka 1 (for local companies) and USD 50000 (for foreign companies).

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Author’s Bio
About Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

Meheruba Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.

Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
Work highlights

Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:

⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.

⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group

⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio

⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector

⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia

Email: [email protected]

Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

Gender: Female

Job Title: Barrister and Senior Associate

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Wildlife laws in Bangladesh

Wildlife laws in Bangladesh

Wildlife laws in Bangladesh – Everything you need to know in 2022

Barrister Tahmidur Rahman Lawfirm

Barrister Tahmidur Rahman
Director, Tahmidur Rahman Remura Law Firm in Bangladesh

24 Jan 2022

This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any breach of violation of wildlife laws in Bangladesh and whats steps can you take.

Major Wildlife laws in Bangladesh

After regaining independence, Bangladesh tackled various development difficulties, including protecting its wildlife and preventing illegal trade in endangered species. The President of Bangladesh issued Presidential Order No. 23 of 1973, known as the Bangladesh Wild Life (Preservation) Order, in 1973.

In 2012, parliament passed another Act called The Wildlife (Preservation and Security) Act, 2012 to adapt new legal requirements for coping with shifting scenarios. The latter nullified the former.

Key provisions of the Act: The government can now convene a “Wild life Advisory Board” made up of specialists thanks to the 2012 Act.

The Board will periodically conduct an evaluation of the current state of biodiversity, wildlife, and forest resources, and issue guidance for their future growth and management. However, a Chief Warden, an Additional Chief Warden, and a Warden have been tasked with overseeing their growth and management as a whole.

 

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Duties of Chief Conservator of Forest, Conservator of Forest and Divisional Forest Officers in Wildlife laws in Bangladesh

By virtue of their positions, the Chief Conservator of Forest, the Conservator of Forest, and the Divisional Forest Officers will serve in the roles of Chief Warden, Additional Chief Warden, and Warden, respectively. The Act requires all private citizens to register their possession of endangered species, protected plant species, and wildlife products within Section 11. According to Article 12, it is illegal to deal in such wildlife or wildlife products without first registering as a dealer. Any disobedience will result in legal consequences.

 

Section 39 of the Act for wildlife laws in Bangladesh provides for a maximum sentence of one year in jail, which may be increased to two years for further offenses. In order to ensure the continued health and viability of wildlife and flora, the government can designate any land as a wildlife refuge, community conservation area, safari park, eco park, botanical garden, wildlife reproduction center, landscape zone, buffer zone, or core zone under the authority granted by the Act.  

Any person who violates sanctuary rules as per wildlife laws in Bangladesh is subject to a maximum of 2 years in prison, with the maximum sentence increasing to 5 years for subsequent offenses. The Act also allows for the establishment of wildlife rescue facilities, which provide medical care, food, housing, and safety for animals that have been injured, captured, or abandoned. The Act provides for the establishment of a unit composed of members of law enforcement agencies to combat wildlife crime and to enforce the provisions of international conventions, protocols, treaties, etc.

Bangladesh is home to many threatened species, including tigers and elephants. The illegal slaughter of these two species is now punishable by up to 7 years in jail under the Act, and up to 12 years in the event of a second conviction. In addition to jail time, a criminal may be required to pay a hefty fine. Trading of tiger or elephant parts has a minimum sentence of 3 years in jail, with the potential for an additional 2 years if the offender is caught again within 5 years.

As per wildlife laws in Bangladesh the act also makes it illegal to kill or trade protected species such as leopards, crocodiles, and migratory birds. These crimes carry a sentence of one to five years in jail. It is also a crime under the Act to aid in the commission of any of the aforementioned crimes.

Wildlife Laws In Bangladesh_Best Law Firm In Bangladesh Tahmidur Rahman_Top Law Firm In Bd

“Big 5” laws of International wild life laws

Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES) 1973, Convention on the Conservation of Migratory Species of Wild Animals 1979, Biodiversity Convention 1992, Ramsar Convention 1971, and World Heritage Convention 1972 are just a few of the wildlife conservation treaties that make up international wildlife law, also known as the “Big 5.” Non-binding instruments, such as Conference of the Parties (COP) decisions and various action plans, typically accompany and inform these.

Role of Bangladesh in wildlife laws

It’s important to note that Bangladesh has ratified, acceded to, or otherwise accepted all of these international treaties and conventions. Further, its wilderness areas are home to a great range of animal species, making it one of the world’s mega biodiverse states. The State should attempt to maintain and improve the environment and to preserve and safeguard the natural resources, bio-diversity, wetlands, forests, and wild life for the current and future citizens, as stated in Article 18A of the Constitution of Bangladesh.

The government of Bangladesh issued the Wildlife (Preservation) Order in 1973, which later became the Bangladesh Wildlife (Preservation) Act in 1973. Following this, in 2012, the National Parliament approved another Act, the Animals (Preservation and Security) Act, 2012, which replaced the former legislation in order to ensure the protection of forests, wildlife, and biodiversity.

As of right now, this law is the highest authority in Bangladesh on matters pertaining to the preservation of natural resources.

Despite the fact that all laws are often founded on the decisions made at the national level, States are also bound by the requirements of international treaties to which they are party and should thus base their laws on these treaties. State governments are responsible for making, enforcing, and enforcing wildlife trafficking laws across borders. Bangladesh is in a similar situation, with a major proportion of its wildlife in peril despite the fact that few regions are protected by law.

Partnership Business In Bangladesh

 Bangladesh’s court’s jurisdiction in Wildlife laws in Bangladesh

Courts with jurisdiction over the offenses covered by this Act include the First Class Judicial Magistrate or the Metropolitan Magistrate and the Court of Sessions. Judges can fine offenders any sum allowed by the law. The Court of Sessions has jurisdiction over cases involving the unlawful killing of tigers and elephants.

The poaching of endangered species like the tiger and elephant is now a cognizable and non-bailable offense. All other Act violations are not cognizable and bailable.
No court will have jurisdiction over a violation of the Act unless a formal complaint has been filed by either an authorized authority or a victim.

Awareness among the general public is crucial in the fight against wildlife crime, which must be complemented by legal restrictions against the trafficking of endangered species. The risk of losing a species of animal or plant, and the long-term consequences for ecological balance, are not well understood by the general public. This is why those who commit crimes against animals are always given a way out.

Partnership Business In Bangladesh_Best Law Firm In Bangladesh_Barrister Tahmidur Rahman

If you want to open a liaison office in Bangladesh or about branch formation click here!

“Tahmidur Rahman – The Law Firm in Bangladesh is considered as one of the leading corporate firms in Dhaka, Bangladesh”

BDLaw Firms Bangladesh

“Courts with jurisdiction over the offenses covered by this Act include the First Class Judicial Magistrate or the Metropolitan Magistrate and the Court of Sessions. “

Barrister Tahmidur Rahman

Are you planning to take actions in regards to Wildlife laws in Bangladesh?

Company formation and registration at Tahmidur Rahman Remura: TLS: The Law Firm in Bangladesh:

The legal team of Tahmidur Rahman, The Law Firm in Bangladesh Remura: TLS, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to Wildlifes laws and preservation . For queries or legal assistance, please reach us at:

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165

Address: House 410, Road 29, Mohakhali DOHS

 

FAQ

How much money is required for company registration in Bangladesh?

The governmental fees for registering a company are determined by the amount of authorized capital. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.

How long does it take to register a company in Bangladesh?

Once the aforementioned formalities have been completed, RJSC will usually issue the certificate of incorporation (Company registration certificate) within 6-8 working days.

It usually takes 2-3 weeks from the date of submission of all documents to RJSC to register a company.

What is BIDA?

Bangladesh Investment Development Authority (BIDA) is in charge of facilitating foreign investments in the country.

BIDA's responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approving remittance of royalties and technical fees, assisting in the acquisition of industrial plots, facilitating utility connections, approving foreign loans, suppliers credit, and providing assistance and advice on a variety of investment-related issues.

Foreign investors with industrial projects are strongly advised to register with BIDA after forming their limited company. However, there is no requirement for a commercial or trading company to register with BIDA. The average time frame for obtaining registration is 7-10 working days.

What documents are needed to set up a private limited company in Bangladesh?

1. Memorandum of Association
2. Article of Association
3. Certificate of Incorporation
4. Trade License
5. TIN
6. VAT Registration Certificate
7. Name Clearance
8. Environmental Clearance Certificate
9. Fire Certificate

What is the minimum capital required for a private limited company in Bangladesh?

In Bangladesh, there is no minimum or maximum authorised capital for a local company.

However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50,000/- must be invested in the Company.

Can a single person start a company in Bangladesh?

 Bangladesh does not allow a single person to open a private limited company or One Person Company (OPC).

A private limited company must have at least two shareholders. In the case of a public limited company, however, the total number of shareholders required is seven.

Can a private limited company have one director in Bangladesh?

A private limited company must have at least two directors. Local or foreign nationals may serve as directors.

Directors must be at least 18 years old and have never been bankrupt or convicted of a crime. A director is required by law to own the qualification shares specified in the Articles of Association.

What is the difference between authorised capital and paid-up capital?

- Authorised capital: The amount of authorised capital must be specified in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that a company may allocate to shareholders.  

In Bangladesh, there is no minimum or maximum authorised capital for a local company. However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50000/- must be invested in the Company.

-Paid-Up Capital : The minimum paid-up capital for registering a Bangladeshi company is Taka 1 (for local companies) and USD 50000 (for foreign companies).

Infographics
How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Bangladesh
Video Tutorial
Author’s Bio
About Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

Meheruba Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.

Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
Work highlights

Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:

⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.

⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group

⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio

⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector

⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia

Email: [email protected]

Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

Gender: Female

Job Title: Barrister and Senior Associate

Have a Different Question?

Email us anytime : [email protected]

Or call — +8801847220062 or +8801779127165

Pi Visa For Foreign Investor In Bangladesh

PI Visa for foreign investor in Bangladesh

PI Visa for foreign investor in Bangladesh • In order to apply for a work permit, foreign investors and employees must hold a PI (private investor) or E2/E3 (employment) VISA. • BIDA issues a letter of recommendation for obtaining a PI and E2/E3 VISA. • VoAs may be...

How To Form An Association In Bangladesh

How to form an Association in Bangladesh

How to form an Association in Bangladesh abd Section 28 of the 1994 Companies Act: Under section 28 of the Companies Act, a nonprofit organization may incorporate as a corporation. This Association will enjoy all the advantages of a limited liability company, but it...

Traffic And Road Laws In Bangladesh

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Traffic and Road laws in Bangladesh The administration of traffic and enforcement of traffic laws in Bangladesh have always been a mess. Our nation's road construction has never been able to keep up with the rapid increase of vehicles. In recent years, however, the...

F-1 Student Visa From Bangladesh

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F-1 Student Visa from Bangladesh: The most common visa for students wishing to study in the United States is the F-1 student visa. It is a temporary visa for foreign students who wish to study at an accredited school or college in the United States. The United States...

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K-2 Visa for Children of US Citizens

K-2 Visa for Children of US Citizens A K-2 visa allows the children of a K-1 fiance visa holder to enter the United States until an immigrant visa becomes available. To be eligible for one of these nonimmigrant visas, the applicant must be under the age of 21 and the...

Mediation in Bangladesh

Mediation in Bangladesh: A Complete OverviewBarrister Remura MahbubDirector, Tahmidur Remura TLS, Law Firm in Bangladesh12 Nov 2022The purpose of this article is to explain the entire process of mediation in Bangladesh: provisions that regulate mediation, step...

Joint Ventures in Bangladesh

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PI Visa for foreign investor in Bangladesh

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A complete guide on Franchise Business Registration in Bangladesh

Bangladesh is the seventh largest consumer of goods and services in the world. In Bangladesh, franchising is an established method for launching a business. The industries of transportation, beauty, fast food, education, wellness, mail delivery, clothing, and health...

How to form an Association in Bangladesh

How to form an Association in Bangladesh abd Section 28 of the 1994 Companies Act: Under section 28 of the Companies Act, a nonprofit organization may incorporate as a corporation. This Association will enjoy all the advantages of a limited liability company, but it...

F-1 Student Visa from Bangladesh

F-1 Student Visa from Bangladesh: The most common visa for students wishing to study in the United States is the F-1 student visa. It is a temporary visa for foreign students who wish to study at an accredited school or college in the United States. The United States...

Holding and Subsidiary Companies in Bangladesh in 2023 – Everything you need to know

Holding and Subsidiary Companies in Bangladesh in 2023 – Everything you need to know

Holding and Subsidiary Companies in Bangladesh – Everything you need to know in 2023

Barrister Tahmidur Rahman
Director, The Law Firm in Bangladesh

24 Jan 2022

This article will explain in details about Holding and Subsidiary Companies in Bangladesh and how can you start your business in Bangladesh.

 

Types of Companies in Bangladesh

There are six ways of doing business in Bangladesh:

In general, these are the six types of business entities can be found in Bangladesh

In simplest way: How you can incorporate Holding and Subsidiary Companies in Bangladesh

Holding and Subsidiary Companies in Bangladesh

When a company has control over another company and it holds the majority of the shares of another company, it is known as a holding company. And the company which is controlled by the first mentioned the company is known as a subsidiary company. Under the provision of Companies Act, 1994,

“a company shall be deemed to be the holding company of another if and only if that other is its subsidiary.”

So, the following characteristics of a holding company may be found-

  • It has the controlling power over another company;
  • It holds more than 50% shares of that other company;
  • It has more than 50% voting power;
  • The holding company is directly of indirectly empowered to
  • appoint directors of that other company.

Subsidiary company:

On satisfying any or more of the following conditions, a company shall be deemed to be a subsidiary company:

(1) Controlling the composition of board of directors:

If the composition of board of directors of a company is controlled byanother company, then the company whose board of directors is controlledshall be deemed to be a subsidiary company. [sec. 2 (2) (a)]

The composition of board of directors is said to be controlled when any director of the subsidiary company is removed or appointed by the parent company without the consent of any other person of the said subsidiary Company.

Holding And Subsidiary Companies In Bangladesh_Best Law Firm In Bangladesh

(2) Controlling voting securities:

A company shall be a subsidiary of another company if more than 50% of the voting securities are directly or in directly controlled, held or owned or managed in any other ways by another (holding) company.

(3) Subsidiary of another subsidiary company:

A company shall also be deemed to be a subsidiary of another company if it is a subsidiary of any company which is that other company’s subsidiary.

For Example: Company B is a subsidiary of company A, and company C is a subsidiary of company B. So, company C is a subsidiary of company ‘A’ also. If company ‘D’ is a subsidiary, then ‘D’ will be regarded as subsidiary of company ‘B’ also, and consequently of company ‘A’ also.

Other Companies alongside Holding and Subsidiary Companies in Bangladesh in Bangladesh:

(a) Existing Company:

Existing company indicates the company formed and registered at or before the commencement of the Companies Act, 1994. Before passing this Act, the companies were regulated under the Companies Act, 1913 .

However, under the provision of present Companies Act, 1994 “Existing Company” means a company formed and registered under any law relating to companies in force at any time before the commencement of this Act, and is in operation after commencement of this Act. 

(b) Foreign Company:

Generally, a foreign company is a company which is incorporated outside Bangladesh. But under section 378, a foreign company may include company incorporated outside Bangladesh, but has an established place of business in Bangladesh.

Holding And Subsidiary Companies In Bangladesh_Best Law Firm In Bd

Setting up a Subsidiary Company in Bangladesh

 

In the event that you go it alone and establish a Bangladesh subsidiary, you’ll need to think carefully about the best organizational structure and geographical location for your business. Private Limited Company is the most common business structure because it shields the parent company from legal responsibility for the actions of its subsidiaries.

Once a building type has been selected, a site must be selected. Countries, states, or even counties can have their own sets of rules and norms by which they conduct business. Consider these criteria as you make your final decision on a suitable location for your company.

The following are the stages of establishing a Holding and Subsidiary Companies in Bangladesh:

  • The Registrar of Joint Stock Companies and Firms website allows you to check your name and print a clearance certificate.
  • Getting Your Company’s Articles of Incorporation and Memorandum of Incorporation
  • To obtain encashment certificates and finalize your registration, you must first open a bank account in Bangladesh.
  • Since the banking system in Bangladesh wasn’t built to handle international business transactions, companies there often face difficulties when trying to do business there. Acquiring encashment certificates is a necessary step in the registration process because they serve as evidence that foreign currency was converted to Bangladeshi Taka. In a stroke of good fortune for expanding businesses, Bangladesh is currently modernizing its banking systems.
Partnership Business In Bangladesh_Best Law Firm In Bangladesh_Barrister Tahmidur Rahman

If you want to open a liaison office in Bangladesh or about branch formation click here!

“Tahmidur Rahman – The Law Firm in Bangladesh is considered as one of the leading corporate firms in Dhaka, Bangladesh”

BDLaw Firms Bangladesh

What are some alternative ways to set up a company in Bangladesh?

Branch Office:

A branch  is not a separate incorporated entity, but rather an extension of its parent company. In other words, the parent company is liable for the liabilities of its branches. 

With Bangladesh Investment Development Authority’s (BIDA) approval, a branch can engage in commercial activities. The Exchange Control Guidelines, on the other hand, strictly monitor its operation.
In Bangladesh, the average time to open a branch officis 45- 60 days.

Liason Office:

A liaison, also known as a representative office, is subject to BIDA approval  similarly as a branch.

It must have an overseas parent company, and its activities are limited because it only serves as a communication or coordination instrument for Bangladesh’s business resources.

Also, keep in mind that a liaison office in Bangladesh cannot earn any local income. Through remittance, the parent company bears all of its expenses and operational cost. It also adheres to the general business registration procedure in Bangladesh.

 

Foreign Investment In Bangladedsh

“To start a private limited company in Bangladesh, you will need to open a temporary bank account in the proposed company name with any scheduled bank in Bangladesh.

 This stage is solely applicable if the proposed company has foreign shareholding.”

 -Meheruba Mahbub

Are you planning to register a private limited company in Bangladesh?

Company formation and registration at Tahmidur Rahman Remura: TLS: The Law Firm in Bangladesh:

The legal team of Tahmidur Rahman, The Law Firm in Bangladesh Remura: TLS, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165

Address: House 410, Road 29, Mohakhali DOHS

 

FAQ

How much money is required for company registration in Bangladesh?

The governmental fees for registering a company are determined by the amount of authorized capital. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.

How long does it take to register a company in Bangladesh?

Once the aforementioned formalities have been completed, RJSC will usually issue the certificate of incorporation (Company registration certificate) within 6-8 working days.

It usually takes 2-3 weeks from the date of submission of all documents to RJSC to register a company.

What is BIDA?

Bangladesh Investment Development Authority (BIDA) is in charge of facilitating foreign investments in the country.

BIDA's responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approving remittance of royalties and technical fees, assisting in the acquisition of industrial plots, facilitating utility connections, approving foreign loans, suppliers credit, and providing assistance and advice on a variety of investment-related issues.

Foreign investors with industrial projects are strongly advised to register with BIDA after forming their limited company. However, there is no requirement for a commercial or trading company to register with BIDA. The average time frame for obtaining registration is 7-10 working days.

What documents are needed to set up a private limited company in Bangladesh?

1. Memorandum of Association
2. Article of Association
3. Certificate of Incorporation
4. Trade License
5. TIN
6. VAT Registration Certificate
7. Name Clearance
8. Environmental Clearance Certificate
9. Fire Certificate

What is the minimum capital required for a private limited company in Bangladesh?

In Bangladesh, there is no minimum or maximum authorised capital for a local company.

However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50,000/- must be invested in the Company.

Can a single person start a company in Bangladesh?

 Bangladesh does not allow a single person to open a private limited company or One Person Company (OPC).

A private limited company must have at least two shareholders. In the case of a public limited company, however, the total number of shareholders required is seven.

Can a private limited company have one director in Bangladesh?

A private limited company must have at least two directors. Local or foreign nationals may serve as directors.

Directors must be at least 18 years old and have never been bankrupt or convicted of a crime. A director is required by law to own the qualification shares specified in the Articles of Association.

What is the difference between authorised capital and paid-up capital?

- Authorised capital: The amount of authorised capital must be specified in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that a company may allocate to shareholders.  

In Bangladesh, there is no minimum or maximum authorised capital for a local company. However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50000/- must be invested in the Company.

-Paid-Up Capital : The minimum paid-up capital for registering a Bangladeshi company is Taka 1 (for local companies) and USD 50000 (for foreign companies).

Infographics
How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Bangladesh
Video Tutorial
Author’s Bio
About Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

Meheruba Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.

Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
Work highlights

Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:

⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.

⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group

⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio

⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector

⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia

Email: [email protected]

Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

Gender: Female

Job Title: Barrister and Senior Associate

Have a Different Question?

Email us anytime : [email protected]

Or call — +8801847220062 or +8801779127165

Pi Visa For Foreign Investor In Bangladesh

PI Visa for foreign investor in Bangladesh

PI Visa for foreign investor in Bangladesh • In order to apply for a work permit, foreign investors and employees must hold a PI (private investor) or E2/E3 (employment) VISA. • BIDA issues a letter of recommendation for obtaining a PI and E2/E3 VISA. • VoAs may be...

How To Form An Association In Bangladesh

How to form an Association in Bangladesh

How to form an Association in Bangladesh abd Section 28 of the 1994 Companies Act: Under section 28 of the Companies Act, a nonprofit organization may incorporate as a corporation. This Association will enjoy all the advantages of a limited liability company, but it...

Traffic And Road Laws In Bangladesh

Traffic and Road laws in Bangladesh

Traffic and Road laws in Bangladesh The administration of traffic and enforcement of traffic laws in Bangladesh have always been a mess. Our nation's road construction has never been able to keep up with the rapid increase of vehicles. In recent years, however, the...

F-1 Student Visa From Bangladesh

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K-2 Visa for Children of US Citizens A K-2 visa allows the children of a K-1 fiance visa holder to enter the United States until an immigrant visa becomes available. To be eligible for one of these nonimmigrant visas, the applicant must be under the age of 21 and the...

Mediation in Bangladesh

Mediation in Bangladesh: A Complete OverviewBarrister Remura MahbubDirector, Tahmidur Remura TLS, Law Firm in Bangladesh12 Nov 2022The purpose of this article is to explain the entire process of mediation in Bangladesh: provisions that regulate mediation, step...

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VAT registration and enlistment in Bangladesh Every company in the country must have a unique Business Identification Number (BIN). A business must first obtain a VAT registration certificate before applying for a BIN. The annual turnover of a business determines...

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When and why is a VAT agent required in Bangladesh? A non-resident entity that conducts business in Bangladesh but does not have a fixed place of business must appoint a VAT Agent in Bangladesh, according to the Value Added Tax and Supplementary Duty Act, 2012, and...

Warisan and Succession Certificate in Bangladesh

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PI Visa for foreign investor in Bangladesh

PI Visa for foreign investor in Bangladesh • In order to apply for a work permit, foreign investors and employees must hold a PI (private investor) or E2/E3 (employment) VISA. • BIDA issues a letter of recommendation for obtaining a PI and E2/E3 VISA. • VoAs may be...

A complete guide on Franchise Business Registration in Bangladesh

Bangladesh is the seventh largest consumer of goods and services in the world. In Bangladesh, franchising is an established method for launching a business. The industries of transportation, beauty, fast food, education, wellness, mail delivery, clothing, and health...

How to form an Association in Bangladesh

How to form an Association in Bangladesh abd Section 28 of the 1994 Companies Act: Under section 28 of the Companies Act, a nonprofit organization may incorporate as a corporation. This Association will enjoy all the advantages of a limited liability company, but it...

F-1 Student Visa from Bangladesh

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Partnership Business in Bangladesh | Fastest and Effective Process of starting your business

Partnership Business in Bangladesh | Fastest and Effective Process of starting your business

Partnership business in Bangladesh in 2023- Everything you need to know

Barrister Tahmidur Rahman
Director, The Law Firm in Bangladesh

24 Jan 2022

This article will explain in details about Partnership Business in Bangladesh and how can you start your business in Bangladesh.

 

Types of Companies in Bangladesh

There are six ways of doing business in Bangladesh:

In general, these five types of business entities can be found in Bangladesh. Around 65 percent of businesses are run on a sole proprietorship basis. 

In simplest way: How you can incorporate a Partnership in Bangladesh

PARTNERSHIP BUSINESS IN BANGLADESH

A partnership is a type of business structure where two or more partners start an entity to do business. For a partnership to exist, there must always be two or more partners.

A Partnership is defined by the Partnership Act, 1932, (the “Partnership Act”) as ‘the relation between persons who have agreed to share profits of the business carried on by all or any of them acting for all’. This definition gives three minimum requirements to constitute a partnership:

The individuals who wish to form a partnership must enter into a verbal or written agreement.

The purpose of the agreement must be to divide the profits from the business that will be conducted by the partnership, and

The business must be operated by all of the partners or by one of them acting on their behalf.

The Partnership Act does not define the term “person.”

There are no penalties for failing to register your partnership, so registration is not required. However, it is recommended as the following rights are denied to unregistered businesses:

The Partnership Act prohibits a partner from bringing a lawsuit against the firm or other partners to enforce any contractual or statutory right.

A contractual right cannot be enforced in court by or on behalf of your company against a third party.

In addition, neither the firm nor any of its partners may assert a set-off (i.e., the mutual adjustment of debts owed by disputing parties to one another) or other proceedings in a dispute with a third party.

PARTNERSHIP BUSINESS IN BANGLADESH QUICK FACTS

In Bangladesh, a registered partnership is the only way to establish a separate legal identity (i.e. separate from its owners) for liability purposes.

All partners of a partnership are jointly and severally liable for the partnership’s liability.

In Bangladesh, the concept of Limited Liability Partnership does not exist.

TAXATION in Partnership Business in Bangladesh: 

Tax-wise, partnership business in Bangladesh are not taxed at the entity level; rather, profits are treated as part of each partner’s personal income and taxed at rates applicable to personal income.

MEMBERS & MANAGEMENT in Partnership Business in Bangladesh:

There must be at least two and no more than twenty partners in partnership business in Bangladesh.

The partners can be individuals or corporations.

In Bangladesh, unlike private or public limited companies, partnerships do not have directors, shareholders, or secretaries; instead, the partners own and operate the business.

PARTNERSHIP DOCUMENTS REQUIRED:

For a partnership to be registered in Bangladesh, the following information/documents are required:

  • Proposed business name;
  • Contract of partnership duly notarized;
  • Form I;
  • Details about the partners;
  • Addresses of the partners’ homes;
  • Details of the partnership’s registered address; and
  • Percentage of each partner’s share of the profit.

 

PARTNERSHIP REGISTRATION PROCEDURE in Bangladesh:

The Registrar of Joint Stock Companies and Firms of Bangladesh (“RJSC”) can register a partnership.

 

The registration process for a partnership business in Bangladesh consists of two steps: name reservation and entity registration. Typically, registration of a partnership can be completed within one or two days.

 

STEP 1- CHOOSING THE PARTNERSHIP NAME:

The partners may choose any name for their partnership business in Bangladesh , subject to the following restrictions:

The names must not be too similar to or identical with the name of an existing business engaged in a similar line of work. The reason for this rule is that a company’s reputation or goodwill may be damaged if a new company adopts an allied name.

The name cannot contain certain words that express or imply the sanction, approval, or sponsorship of the government.

After selecting a name, you must submit an application for name clearance via the RJSC website.

STEP 2 – PREPARE A PARTNERSHIP DEED:

You must create a partnership agreement for your partnership business in Bangladesh. Typically, a partnership agreement will include the following clauses:

  • Name and address of the company, as well as the names of all partners;
  • Nature of the enterprise to be conducted;
  • Date of Business Commencement;
  • Whether the duration of the partnership is fixed or indefinite;
  • Contribution of capital by each partner;
  • ratio of profit-sharing among partners;
  • Rules for retirement, death, and admission of a partner; and
  • The aforementioned are the minimum requirements for all partnership agreements. Additionally, the parties may include any additional clauses.

The Partnership Deed must be printed on stamp paper in accordance with the Stamp Act, and all partners must sign it. It should then be notarized.

STEP 3- REGISTER PARTNERSHIP DEED WITH RJSC:

The partnership deed and its completion Form I must be submitted to RJSC. These documents will be reviewed by RJSC representatives. When officials are satisfied with the points stated in the partnership agreement, he shall record an entry of the statement in the Register of Firms and issue a Certificate of Registration.

There are numerous types of businesses in Bangladesh. One is a Partnership Firm, while the others are Sole Proprietorship and Limited Liability Company. The Partnership Act of 1932 governs the formation of a Partnership Firm. In Bangladesh, only RJSC (The Registrar of Joint Stock Companies and Firms) has the authority to register Partnership Firms. For Partnership Registration in Bangladesh, the steps outlined at the end of this article must be followed.

 

Proprietorship Business In Bangladesh_Best Law Firm In Dhaka

Liability of a Proprietorship Business in Bangladesh:

A sole proprietorship is not a separate legal entity. The owner is responsible for all business outcomes.

Taxation in Proprietorship Business in Bangladesh:

The proprietor will be required to pay the tax on his personal income from the business.

Maintenance & Operation in Proprietorship Business in Bangladesh:

  • The running expenses of a proprietorship are quite cheap.
  • Annual preparation of a profit & loss statement and audit report is not necessary.
  • The only individual who makes business decisions is the owner.

Additional necessary approvals and documents for Proprietorship Business in Bangladesh:

After obtaining a Trade License for a sole proprietorship, a Taxpayer Identification Number (TIN) certificate is required to create a bank account (business account) in order to conduct commercial transactions.

Currently, most businesses incorporate VAT (Value Added Tax). To deduct VAT, a VAT Registration Certificate must be collected. To operate a business and deduct AIT (Advance Income Tax) at the source, a TIN is required.

If a proprietor desires to engage in international or multinational company, he or she must possess an Export Registration Certificate or an Import Registration Certificate. Bangladesh is now one of the world’s largest exporters of ready-made clothes, jute, frozen foods, leather goods, and potatoes.

In Bangladesh, a significant number of proprietorships, partnerships, and limited liability companies are interested in engaging in international commerce or export and import operations. In Bangladesh, when two or more entrepreneurs wish to start a firm, they must either form a Limited Company or a Partnership Firm.

Partnership Business In Bangladesh
Proprietorship Business In Bangladesh_Top Law Firm In Dhaka_Tahmidur Rahman Remura

When two or more people with a similar mindset or similar professional backgrounds start a business and create a voluntary agreement with the intention of making and sharing profits, this is referred to as a Partnership Business. Minimum of two and maximum of twenty individuals can form a business partnership.

In order to open a bank account for a partnership business, registration with the RJSC is now required. For this reason, many unregistered Partnership Business proprietors will register their Partnership Business with RJSC. To obtain legal privileges, however, Partnership Business Registration with RJSC is required.

The partnership agreement is commonly referred to as the partnership deed. Typically, the following provisions are included in a Partnership Deed:

  • Partner’s Name, Current Address, and Permanent Address.
  • Firm’s name as a partnership
  • Business Description Business Address
  • Duration of the Relationship
  • Profit participation for each Partner
  • Capital contributions made by each partner
  • Conditions of Retiring
  • Mode of Administration
  • Interest on Lending
  • Breakup of a Partnership

Steps in Bangladesh Partnership Registration:

 

A partnership can be registered either at the time of formation or later. An application must be submitted to the RJSC with the following information:

  • Initial Clearance Declaration of Partnership Firm
  • Date of Incorporation of the Partnership
  • Duration of the Business Partnership
  • Principal place of business with Complete Address Date of
  • Partnership Formation
  • Partners’ Particulars
  • Business Information The application must be submitted on the prescribed Form- I.

We recommend that you immediately register your existing Partnership Firm to avoid unforeseen circumstances. Also, if you establish a new partnership in Bangladesh, you must register with the RJSC. Please review the specifics of additional RJSC.

Benefits of Partnership Business in Bangladesh:

Due to the nature of business start-up capital funds provided by the partners, the greater the number of partners, the more capital they can invest in their business, allowing for greater adaptability and advancement potential.

Generally speaking, a partnership is simpler to register, operate, and manage. Partnerships are subject to less stringent rules and regulations than corporations. As long as all partners are in agreement, they are free to run their business as they see fit.

Every business partner contributes new ideas and abilities. It is easier to make a decision to solve a problem when there are more minds to consider it. Each partner can share in the business’s duties and responsibilities.

After completing Partnership Registration in Bangladesh, the following documents are required to commence business operations:

Certificate of Trade License for your newly registered Partnership.
Certificate of VAT Registration for a Bank Account
Import Registration Certificate (In case of Import Business)
Certificate of Registration for Export (In case of Export Business)

Partnership Business In Bangladesh_Best Law Firm In Bangladesh_Barrister Tahmidur Rahman

If you want to open a liaison office in Bangladesh or about branch formation click here!

“Tahmidur Rahman – The Law Firm in Bangladesh is considered as one of the leading corporate firms in Dhaka, Bangladesh”

BDLaw Firms Bangladesh

What are some alternative ways to set up a company in Bangladesh?

Branch Office:

A branch  is not a separate incorporated entity, but rather an extension of its parent company. In other words, the parent company is liable for the liabilities of its branches. 

With Bangladesh Investment Development Authority’s (BIDA) approval, a branch can engage in commercial activities. The Exchange Control Guidelines, on the other hand, strictly monitor its operation.
In Bangladesh, the average time to open a branch officis 45- 60 days.

Liason Office:

A liaison, also known as a representative office, is subject to BIDA approval  similarly as a branch.

It must have an overseas parent company, and its activities are limited because it only serves as a communication or coordination instrument for Bangladesh’s business resources.

Also, keep in mind that a liaison office in Bangladesh cannot earn any local income. Through remittance, the parent company bears all of its expenses and operational cost. It also adheres to the general business registration procedure in Bangladesh.

 

How To Register A Private Limited Company In Bangladesh Infographics Remura: Tls: Tls Mahbub

“To start a private limited company in Bangladesh, you will need to open a temporary bank account in the proposed company name with any scheduled bank in Bangladesh.

 This stage is solely applicable if the proposed company has foreign shareholding.”

 -Meheruba Mahbub

Are you planning to register a private limited company in Bangladesh?

Company formation and registration at Tahmidur Rahman Remura: TLS: The Law Firm in Bangladesh:

The legal team of Tahmidur Rahman, The Law Firm in Bangladesh Remura: TLS, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165

Address: House 410, Road 29, Mohakhali DOHS

 

FAQ

How much money is required for company registration in Bangladesh?

The governmental fees for registering a company are determined by the amount of authorized capital. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.

How long does it take to register a company in Bangladesh?

Once the aforementioned formalities have been completed, RJSC will usually issue the certificate of incorporation (Company registration certificate) within 6-8 working days.

It usually takes 2-3 weeks from the date of submission of all documents to RJSC to register a company.

What is BIDA?

Bangladesh Investment Development Authority (BIDA) is in charge of facilitating foreign investments in the country.

BIDA's responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approving remittance of royalties and technical fees, assisting in the acquisition of industrial plots, facilitating utility connections, approving foreign loans, suppliers credit, and providing assistance and advice on a variety of investment-related issues.

Foreign investors with industrial projects are strongly advised to register with BIDA after forming their limited company. However, there is no requirement for a commercial or trading company to register with BIDA. The average time frame for obtaining registration is 7-10 working days.

What documents are needed to set up a private limited company in Bangladesh?

1. Memorandum of Association
2. Article of Association
3. Certificate of Incorporation
4. Trade License
5. TIN
6. VAT Registration Certificate
7. Name Clearance
8. Environmental Clearance Certificate
9. Fire Certificate

What is the minimum capital required for a private limited company in Bangladesh?

In Bangladesh, there is no minimum or maximum authorised capital for a local company.

However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50,000/- must be invested in the Company.

Can a single person start a company in Bangladesh?

 Bangladesh does not allow a single person to open a private limited company or One Person Company (OPC).

A private limited company must have at least two shareholders. In the case of a public limited company, however, the total number of shareholders required is seven.

Can a private limited company have one director in Bangladesh?

A private limited company must have at least two directors. Local or foreign nationals may serve as directors.

Directors must be at least 18 years old and have never been bankrupt or convicted of a crime. A director is required by law to own the qualification shares specified in the Articles of Association.

What is the difference between authorised capital and paid-up capital?

- Authorised capital: The amount of authorised capital must be specified in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that a company may allocate to shareholders.  

In Bangladesh, there is no minimum or maximum authorised capital for a local company. However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50000/- must be invested in the Company.

-Paid-Up Capital : The minimum paid-up capital for registering a Bangladeshi company is Taka 1 (for local companies) and USD 50000 (for foreign companies).

Infographics
How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Bangladesh
Video Tutorial
Author’s Bio
About Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

Meheruba Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.

Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
Work highlights

Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:

⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.

⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group

⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio

⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector

⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia

Email: [email protected]

Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

Gender: Female

Job Title: Barrister and Senior Associate

Have a Different Question?

Email us anytime : [email protected]

Or call — +8801847220062 or +8801779127165

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Proprietorship Business in Bangladesh

Proprietorship Business in Bangladesh

Proprietorship business in Bangladesh in 2023- Everything you need to know

Barrister Remura Mahbub
Director, The Law Firm in Bangladesh

24 Jan 2022

This article will explain in details about Proprietorship Business in Bangladesh and how can you start your business in Bangladesh.

 

Types of Companies in Bangladesh

There are five ways of doing business in Bangladesh:

In general, these five types of business entities can be found in Bangladesh. Around 65 percent of businesses are run on a sole proprietorship basis. A proprietorship business can be started by a single entrepreneur. Small and medium-sized businesses typically opt for sole proprietorship.

    In simplest way: How you can incorporate a Proprietorship in Bangladesh

    In short for you: The following steps outline how to start a sole proprietorship business:

    1. First, you have to select a name for Your Business in Bangladesh
    2. You have to rent a commercial space to begin your business.
    3. Fill out an application for a trade license from your local city corporation/union, etc.
    4. Apply for and obtain a business license
    5. Complete an application for an e-tin certificate
    6. Open a bank account in the company’s name.

    That’s all you need! Once you are done with these simple formalities, you will have a legal Proprietorship business under your ownership.

    You can still stick around here for more information on this matter! We are glad you are doing so!

    Now some key facts about Sole Proprietorship

     

    • In Bangladesh, a sole proprietorship does not constitute a separate legal entity and thus is not distinct from the owner/ proprietor.
    • The owner of the business is personally liable for all liabilities incurred during the course of the business.
    • A sole proprietorship is open to any Bangladeshi citizen over the age of 18.
    • As the sole proprietorship’s business address, a local commercial address must be provided.
    • Profits from a sole proprietorship are treated as income of the individual who owns the entity, and thus are taxed at the same rate as personal income.
    • Because a sole proprietorship in Bangladesh is not a legal entity, it cannot register another business firm.
    • Sole proprietorships are exempt from auditing their accounts because any profits are taxed as personal income.
    • The most basic requirement for a proprietorship is a trade license.
      The Trade License must be renewed annually.

     

    Proprietorship Business In Bangladesh_Best Law Firm In Bangladesh_Tahmidur Rahman Best Law Firm In Dhaka

    CONSIDERATIONS FOR FOREIGNERS in regards to

    Proprietorship Business in Bangladesh:

    Practically speaking, a sole proprietorship is unavailable to foreigners. Foreign business professionals should instead create a limited liability firm. Consult the company registration in Bangladesh guide for more information on limited liability firms.

    Sole Proprietorship Business in Bangladesh

    If you are thinking of having a proprietorship business in Bangladesh, you are not the only one.

    The easiest and quickest way to start a one-owner firm is through a sole proprietorship. When you begin performing business, sole proprietorship commences.

    It does not need the filing of government or state forms and imposes little regulatory requirements, making it a perfect starting point for self-employed individuals.

    The absence of a separate legal entity distinguishes a sole proprietorship from a company, be it public or private. The owner of a sole proprietorship is therefore not free from liabilities incurred by the business.

    For instance, the debts of a sole proprietorship are also the owner’s debts. However, the gains of a sole proprietorship are also the owner’s profits, as all profits pass directly to the sole proprietor.

    Approximately 65 percent of enterprises are operated as sole proprietorships. A sole owner can establish a sole proprietorship. Small and medium-sized businesses typically operate as sole proprietorships.

    First get a trade license to start your proprietorship Business

    A Trades License must be obtained from the local authority, which could be the City Corporation Office, Municipality Office, Upozila council and Union Council, or the respective Govt. authority, if a proprietorship business is to be established.

    To receive a Trade License, one must choose a suitable name for their Proprietorship business, submit the required paperwork, and pay the applicable government fees (for the type of business) to the Trade License granting authorities.

    A Trade License is issued by the authority following a review of all applicable documentation and a mandatory field inquiry.

    Following issues are considered by the authority:

    • The proprietorship’s name – Name of the proprietor
    • Such enterprises like Export, Import, Supplier, etc.
    • Business Address
    • Address, Date of Birth, and Name of Parents
    • Owner’s Identification Cards copy
    • Photograph of the owner Registered business address VAT chalan copy of the company license Office rental deed
    • Fill up Trade license form with the Owner’s signature

     

    Proprietorship Business In Bangladesh_Best Law Firm In Dhaka

    Liability of a Proprietorship Business in Bangladesh:

    A sole proprietorship is not a separate legal entity. The owner is responsible for all business outcomes.

    Taxation in Proprietorship Business in Bangladesh:

    The proprietor will be required to pay the tax on his personal income from the business.

    Maintenance & Operation in Proprietorship Business in Bangladesh:

    • The running expenses of a proprietorship are quite cheap.
    • Annual preparation of a profit & loss statement and audit report is not necessary.
    • The only individual who makes business decisions is the owner.

    Additional necessary approvals and documents for Proprietorship Business in Bangladesh:

    After obtaining a Trade License for a sole proprietorship, a Taxpayer Identification Number (TIN) certificate is required to create a bank account (business account) in order to conduct commercial transactions.

    Currently, most businesses incorporate VAT (Value Added Tax). To deduct VAT, a VAT Registration Certificate must be collected. To operate a business and deduct AIT (Advance Income Tax) at the source, a TIN is required.

    If a proprietor desires to engage in international or multinational company, he or she must possess an Export Registration Certificate or an Import Registration Certificate. Bangladesh is now one of the world’s largest exporters of ready-made clothes, jute, frozen foods, leather goods, and potatoes.

    In Bangladesh, a significant number of proprietorships, partnerships, and limited liability companies are interested in engaging in international commerce or export and import operations. In Bangladesh, when two or more entrepreneurs wish to start a firm, they must either form a Limited Company or a Partnership Firm.

    Proprietorship Business In Bangladesh_Top Law Firm In Dhaka_Tahmidur Rahman Remura

    Proprietorship Business in Bangladesh and its benefits:

    • It is the most convenient and inexpensive business structure to establish.
    • As a sole owner, you have complete authority over all aspects of the firm, including decision-making.
    • There is no profit sharing: All income earned by the business is accounted for.
    • The termination of a single proprietorship is simpler, quicker, and less expensive than that of other company structures.
    • Least compliance requirements: You are exempt from filing annual tax returns and are simply required to renew your membership annually.

    SOLE PROPRIETORSHIP BUSINESS IN BANGLADESH’s DISADVANTAGES:

    • No independent legal entity: You cannot exist without your business. This renders you financially and legally accountable for all corporate obligations and legal proceedings.
    • Creditors may sue you for debts committed and may also get a court order to seize your personal assets, such as your property.
    • No tax benefits or incentives for corporations: Taxes are assessed based on your personal income tax rate, and you do not receive the particular tax benefits provided to a limited liability business.
    • Your personal finances and the business’s income are the only sources of capital.
    • Thus, corporate expansion is restricted and challenging.
    • There is no perpetual succession, as you and your business are one and the same. However, after the death of the proprietor, the successor is permitted to continue the firm under the same name.
    • Nobody would be prepared to lend you huge sums of money due to this entity’s poor public impression, which makes it the least desirable for serious businesses.
    • It is also challenging to attract high-caliber staff or senior-level executives, who typically want a more advanced business structure, such as a limited liability corporation.
    • Sale or transfer of all or part of a business: You can only transfer a business by selling its assets.
    How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Dhaka

    If you want to open a liaison office in Bangladesh or about branch formation click here!

    “Tahmidur Rahman – The Law Firm in Bangladesh is considered as one of the leading corporate firms in Dhaka, Bangladesh”

    BDLaw Firms Bangladesh

    What are some alternative ways to set up a company in Bangladesh?

    Branch Office:

    A branch  is not a separate incorporated entity, but rather an extension of its parent company. In other words, the parent company is liable for the liabilities of its branches. 

    With Bangladesh Investment Development Authority’s (BIDA) approval, a branch can engage in commercial activities. The Exchange Control Guidelines, on the other hand, strictly monitor its operation.
    In Bangladesh, the average time to open a branch officis 45- 60 days.

    Liason Office:

    A liaison, also known as a representative office, is subject to BIDA approval  similarly as a branch.

    It must have an overseas parent company, and its activities are limited because it only serves as a communication or coordination instrument for Bangladesh’s business resources.

    Also, keep in mind that a liaison office in Bangladesh cannot earn any local income. Through remittance, the parent company bears all of its expenses and operational cost. It also adheres to the general business registration procedure in Bangladesh.

     

    How To Register A Private Limited Company In Bangladesh Infographics Remura: Tls: Tls Mahbub

    “To start a private limited company in Bangladesh, you will need to open a temporary bank account in the proposed company name with any scheduled bank in Bangladesh.

     This stage is solely applicable if the proposed company has foreign shareholding.”

     -Meheruba Mahbub

    Are you planning to register a private limited company in Bangladesh?

    Company formation and registration at Tahmidur Rahman Remura: TLS: The Law Firm in Bangladesh:

    The legal team of Tahmidur Rahman, The Law Firm in Bangladesh Remura: TLS The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:

    E-mail: [email protected]
    Phone: +8801847220062 or +8801779127165

    Address: House 410, Road 29, Mohakhali DOHS

     

    FAQ

    How much money is required for company registration in Bangladesh?

    The governmental fees for registering a company are determined by the amount of authorized capital. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.

    How long does it take to register a company in Bangladesh?

    Once the aforementioned formalities have been completed, RJSC will usually issue the certificate of incorporation (Company registration certificate) within 6-8 working days.

    It usually takes 2-3 weeks from the date of submission of all documents to RJSC to register a company.

    What is BIDA?

    Bangladesh Investment Development Authority (BIDA) is in charge of facilitating foreign investments in the country.

    BIDA's responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approving remittance of royalties and technical fees, assisting in the acquisition of industrial plots, facilitating utility connections, approving foreign loans, suppliers credit, and providing assistance and advice on a variety of investment-related issues.

    Foreign investors with industrial projects are strongly advised to register with BIDA after forming their limited company. However, there is no requirement for a commercial or trading company to register with BIDA. The average time frame for obtaining registration is 7-10 working days.

    What documents are needed to set up a private limited company in Bangladesh?

    1. Memorandum of Association
    2. Article of Association
    3. Certificate of Incorporation
    4. Trade License
    5. TIN
    6. VAT Registration Certificate
    7. Name Clearance
    8. Environmental Clearance Certificate
    9. Fire Certificate

    What is the minimum capital required for a private limited company in Bangladesh?

    In Bangladesh, there is no minimum or maximum authorised capital for a local company.

    However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50,000/- must be invested in the Company.

    Can a single person start a company in Bangladesh?

     Bangladesh does not allow a single person to open a private limited company or One Person Company (OPC).

    A private limited company must have at least two shareholders. In the case of a public limited company, however, the total number of shareholders required is seven.

    Can a private limited company have one director in Bangladesh?

    A private limited company must have at least two directors. Local or foreign nationals may serve as directors.

    Directors must be at least 18 years old and have never been bankrupt or convicted of a crime. A director is required by law to own the qualification shares specified in the Articles of Association.

    What is the difference between authorised capital and paid-up capital?

    - Authorised capital: The amount of authorised capital must be specified in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that a company may allocate to shareholders.  

    In Bangladesh, there is no minimum or maximum authorised capital for a local company. However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50000/- must be invested in the Company.

    -Paid-Up Capital : The minimum paid-up capital for registering a Bangladeshi company is Taka 1 (for local companies) and USD 50000 (for foreign companies).

    Infographics
    How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Bangladesh
    Video Tutorial
    Author’s Bio
    About Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

    Meheruba Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.

    Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
    Work highlights

    Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:

    ⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.

    ⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group

    ⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio

    ⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector

    ⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia

    Email: [email protected]

    Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

    Gender: Female

    Job Title: Barrister and Senior Associate

    Have a Different Question?

    Email us anytime : [email protected]

    Or call — +8801847220062 or +8801779127165

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    Company Share in Bangladesh- Everything you need to know in 2023

    Company Share in Bangladesh- Everything you need to know in 2023

    TR Law Firm in Bangladesh

    Company Share in Bangladesh

    Barrister Tahmidur Rahman Lawfirm

    24 Jan 2022

    This article will explain in details about company shares in Bangladesh, Share capital, Share issued in discount and everything you need to know about shares of a comapny in Bangladesh.

    Shares of Company in Bangladesh

    Before we talk about shares of a company in Bangladesh. There are five ways of doing business in Bangladesh:

     

    A company share in Bangladesh is a movable property transferable as per provisions of the articles. There is no exhaustive definition of a share in the Act.’ A share is the interest of a shareholder in the company measured by a sum of money, for the purpose of liability in the first place, and of interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders inter se in accordance with section.

     

    A company share in Bangladesh is a type of contractual claim against a company. It is an example of intangible property called a ‘chose in action’ or “Thing in action’. Professor R Pennington discusses the difficulty of defining shares and concludes that they are a species of intangible movable property which comprises a collection of rights and obligations relating to an interest in a company of an economic and proprietary character, but not constituting a debt.

      Legal and Equitable Actions in company share in Bangladesh

      In English law there are two kinds of chose in action; (i) legal choses in action (being claims enforceable at common law) and (ii) equitable choses in action (Being claims enforceable in equity). Because a company share in Bangladesh is a creature of statute, it is a legal rather than an equitable chose in action.  In that respect it differs from a share in a partnership, which is an equitable chose in action because, historically, the interest of a partner has been enforceable in equity and not at law.

       

      A share in a company also differs from a share in a partnership in terms of transferability of membership. In companies listed on the Stock Exchange a share can be freely sold and transferred. In unlisted companies there can be restrictions on transfer. The transferee becomes a member of the company in substitution of the transferor. A person who buys the share of a partner, however, acquires an interest but does not become a partner; the vendor becomes a trustee for him of the interest agreed to be sold.

       

      A transfer of a share as a legal chose in action differs from transfer of a debt as a legal chose in action. A creditor can transfer the legal ownership of a debt by a two sided written assignment between a transferor and transferee with written notice to the debtor, but without needing his consent. Of course, the debtor cannot transfer the liability without the consent of the creditor. 

      But to transfer the legal ownership of a company share in Bangladesh, a change in the company’s share register is needed. That means there is a three-sided novation (the substitution of a new contract in place of an old one) rather than a two-sided assignment. Hence, liability attached to a partly paid-up share can be transferred although the transferor can remain liable if the company commences to wind up within one year from the transfer.

       

      The rights making up a share are not separate pieces of property. If a company share in Bangladesh had carried only financial rights it might have been considered divisible; but a share carries rights of membership and the whole scheme of the company law does not admit of membership referable to a fraction of a share. Hence, a company cannot allot fractional shares.

       

      Nor can a shareholder divide an allotted share so as to assign only some of the set of rights, such as the right to be paid dividends. If a member wishes to dispose of only part of the benefits of a share, that can be done behind the screen of a trust.

       

      The member could create a trust of the share so that the trustee would be bound to account to one beneficiary for, say, dividends only and to account to another beneficiary for other benefits. A share as an item of property differs from physical subjects of ownership such as land in that its characteristics are fixed, not by nature, but by whatever is put into the contract between company and shareholder.

       

      In a company, the rights attached to company share in Bangladesh may be so framed that the shareholder is restricted (for example, as to transfer of the shares) and those restrictions will apply to anybody who becomes owner of the shares. In other words, in a share the restrictions can go to defining the property itself instead of being something external that is imposed in respect of a pre-existing item of property.

      Company Share In Bangladesh_ Top Law Firm In Bangladesh_Barrister Tahmidur Rahman Remura 2022

      If you want to know about Share Transfer Process in Bangladesh

      • Step by Step Process of transferring shar in Bangladesh

      Share Capital or Authorised Capital in Bangladesh

      The word “capital” used in connection with a company has several different meanings. It may mean the nominal or authorised share capital, the issued share capital, or the paid-up share capital of the company.

       

      The nominal or authorised capital is merely the amount of share capital which the company is authorised to issue. In the case of a limited company the amount of potential share capital with which it proposes to be registered, and the division thereof into shares of a fixed amount, must be set out in the memorandum of association. This as well as the paid-up amount may be increased or reduced.

       

      The amount of the company’s nominal capital depends on its business requirements, actual or potential. At the time of registration of the company the promoters will have to pay fees and stamp based on the amount of the nominal capital.

       

      The issued or allotted capital is that part of the company’s nominal capital which has been issued to the shareholders. The company is not bound to issue all its capital at once.

      Further issues of capital are made as they are needed (please find the details in section 155 of the Act).

      The paid-up capital is that part of the issued capital which has been paid-up by the shareholders. The company may, for example, have a nominal capital of Tk 500,000 divided into 500,000 shares of Tk One each, of which Tk 400,000 is issued, i.e., 400,000 of the shares have been issued and only Tk 100,000 is paid-up, i.e., the company has so far required only 25p. to be paid-up on each share. The uncalled capital is the remainder of the issued capital and can be called up at any time by the company from the shareholders in accordance with the provisions of the articles.  

      The paid-up capital of the company includes the value of the shares paid-up and any premium on such shares although the share premium will be shown as share premium account in the balance sheet.

      The Securities and Exchange Commission has to be satisfied before company share in Bangladesh can be issued at a premium as to the justification for it.

      Company Share In Bangladesh_ Best Corporate Law Firm In Bangladesh_Barrister Tahmidur Rahman Remura 2022

      Shared Issued at discount in Bangladesh

      The issued share capital of a company is the fund to which creditors of the company can look for payment of their debts, and so, to protect the creditors, shares can be treated as paid-up only to the extent of the amount actually received by the company. Section 152 and 153 of the Company Act impose restrictions on issue of shares and debentures at a commission or discount.

      A commission may be paid only if its payment and rate are approved by the articles and is mentioned in the prospectus where such a prospectus is issued and, in a statement, in lieu of prospectus where such a prospectus is not issued. 

      Shares may be issued at a discount if such issue is authorised by resolution of the company in general meeting and sanctioned by the Court.

      The resolution must specify the maximum rate of discount not exceeding ten percent at which shares are to be issued and not less than one year has elapsed since the date on which the company was entitled to commence business and the shares to be issued at discount are done so within six months after the date on which the company was entitled to commence business.

      Every prospectus and balance sheet issued after the company share  discount must contain particulars of the discount allowed on the issue of shares.

      Redeemable Preference Shares in Bangladeshi Companies (company share in Bangladesh)

      Redeemable Preference Shares can be issued if so authorised by the articles. Section 154 of the Companies Act however provides that no such share shall be redeemed except out of profits of the company which would be otherwise available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption or out of sale proceeds of any of the profits of the company.

      No such share shall be redeemed unless they are fully paid-up and where any such shares are redeemed otherwise, than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend, be transferred to a reserve fund to be called the capital reserve fund.

      A sum equal to the amount applied in redeeming the shares, and the provisions of the Act relating to the reduction of the share capital of a company shall apply as if the capital redemption reserve fund were paid-up share capital of the company.  

      Where any such shares are redeemed out of the fresh issue, the premium, if any, payable on redemption must have been provided for out of the profits of the company before the shares are redeemed.

      There shall be included in every balance sheet of a company which has issued redeemable preference shares a statement specifying what part of the issued capital of the company consists of such shares and the date when the shares are liable to be redeemed and where no such date is fixed the period of notice that is to be given for redemption.

      Company Share In Bangladesh_ Best Commercial Law Firm In Bangladesh_Barrister Tahmidur Rahman Remura 2022

      If you want to open a liaison office in Bangladesh or about branch formation click here!

      Essential Information for Foreign Investors

      Foreign investors need to keep the following things in mind when they plan to form a private limited company in Bangladesh:

      • The costs of registering a company are primarily determined by the company’s authorized capital. The average cost is between USD 1800.
      • Shelf companies are not permitted and must have a physical place of business in Bangladesh.
      • Bangladesh Forex Regulations allow for the full repatriation of profits and investments.
      • Foreign nationals may be employed at a 20:1 (local: expat) ratio, subject to obtaining the necessary work permit.
      • Except in a few restricted areas, 100 percent FDI investment is permitted.
      • Directors can be either foreign or domestic nationals.
      • The typical corporate income tax rate ranges from 25% to 45 percent, depending on the sector and nature of the company.

        However, tax exemptions are available for selected sectors and areas for 5-7 years.

      • There are also additional tax exemptions  for investing in Special Economic Zones.

       

      Corporate Associates

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      Team up with the best law firm in Bangladesh to help you through the process.

      “Tahmidur Rahman – The Law Firm in Bangladesh is considered as one of the leading corporate firms in Dhaka, Bangladesh”

      BDLaw Firms Bangladesh

      What are some alternative ways to set up a company in Bangladesh?

      Branch Office:

      A branch  is not a separate incorporated entity, but rather an extension of its parent company. In other words, the parent company is liable for the liabilities of its branches. 

      With Bangladesh Investment Development Authority’s (BIDA) approval, a branch can engage in commercial activities. The Exchange Control Guidelines, on the other hand, strictly monitor its operation.
      In Bangladesh, the average time to open a branch officis 45- 60 days.

      Liason Office:

      A liaison, also known as a representative office, is subject to BIDA approval  similarly as a branch.

      It must have an overseas parent company, and its activities are limited because it only serves as a communication or coordination instrument for Bangladesh’s business resources.

      Also, keep in mind that a liaison office in Bangladesh cannot earn any local income. Through remittance, the parent company bears all of its expenses and operational cost. It also adheres to the general business registration procedure in Bangladesh.

       

      How To Register A Private Limited Company In Bangladesh Infographics Remura Mahbub

      “To start a private limited company in Bangladesh, you will need to open a temporary bank account in the proposed company name with any scheduled bank in Bangladesh.

       This stage is solely applicable if the proposed company has foreign shareholding.”

      – Barrister Remura Mahbub

      Are you planning to register a private limited company in Bangladesh?

      Company formation and registration at Tahmidur Rahman TLS:

      The legal team of Tahmidur Rahman, The Law Firm in Bangladesh TLS are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company, Branch office Registration, Share Transfer Process in Bangladesh . For queries or legal assistance, please reach us at:

      E-mail: [email protected]
      Phone: +8801847220062 or +8801779127165

      Address: House 410, Road 29, Mohakhali DOHS, Dhaka 1212

       

      FAQ

      What is the basic of issuing Shares of a company in Bangladesh?

      The procedure through which companies distribute additional shares to shareholders is known as an issue of shares. There are two types of shareholders: individuals and corporations. When issuing shares, the corporation complies with the regulations set forth under the Companies Act of 1994.

      What are the nature and classes of shares in Bangladesh?

      One of the components into which a company's capital is divided is a share. Therefore, if a firm has BDT 5 lakh in total capital and divides that capital into 5000 units of BDT 100 each, each unit of BDT 100 is equivalent to one share of the company.

      As a result, ownership of the company is based on shares. A shareholder is a person who owns such shares and is hence a member of the business.

      The fundamental information about shares and share capital, such as the kinds of shares that must be mandated, will now be found in the articles of association. According to the Companies Act of 1994, a corporation may only issue two different kinds of shares. They differ in nature and in their rights and responsibilities. 

      What is the preference share of a company?

      A share that has two exclusive preferential rights over the other form of shares, namely equity shares, is referred to as a preference share. These two preference share specific requirements are

      a preferred position in relation to a company's declared dividends. They may get such dividends at a predetermined rate based on the nominal value of the shares they own. Preference shareholders receive the dividend before equity stockholders as a result.
      preferential treatment when it comes to capital repayment in the event of a corporate liquidation. This indicates that preference shareholders receive their payouts before equity shareholders do.
      Preference shares are comparable to equity shares aside from these two rights. Preference share holders have the opportunity to vote on any issues that directly affect their rights or duties.

      Actually, there are numerous forms of preference shares. They may be exchangeable or not. They can either participate (share in additional income after a dividend is paid out) or not. Additionally, they could be non-cumulative or cumulative (demand arrears will accumulate).

      What is the Equity Share of a company in Bangladesh?

      A share that isn't a preference share is an equity share. Shares without any preferential rights are therefore considered equity shares. They are only given equity, or ownership, in the business.

      Dividends paid to equity stockholders are not set in stone. Depending on the company's financial performance, the Board of Directors makes the decision. Additionally, the stockholders forfeit the dividend for that year if it cannot be declared; the dividend does not accumulate in such cases.

      Additionally, equity shareholders have proportional voting rights based on the company's paid-up capital. In essence, it is a system of "one share, one vote." A business cannot publish non-voting

      What is the procedure of Issuing Shares in Bangladesh?

      1] Issue of Prospectus
      The prospectus is released first, then the shares. The prospectus functions as a kind of solicitation to the general public to subscribe for company shares. A prospectus includes all of the company's information, including its financial breakdown, profit and loss accounts from the prior year, and balance sheets.

      Additionally, it describes how the funds raised will be used. A corporation must publish a prospectus or a document in its place when soliciting deposits from the general public.

      2) Receiving Applications
      Prospective investors may now submit applications for shares after the prospectus is released. The prospectus specifies the schedule bank where the required application funds must be deposited along with the completed application. The duration of the application period is 120 days at most. If the required minimum subscription amount is not met in these 120 days, the share issuance will be canceled. Within 130 days of the prospectus's release, the application funds must be returned to the investors.

      3] Share Allocation
      The shares may be distributed after the required minimum subscription amount has been met. Shares are typically oversubscribed, hence the allocation is made on a pro rata basis. Those whose shares have been allocated get Letters of Allotment in the mail. As a result, a legal contract is formed between the applicant and the business, who is now a shareholder.

      Letters of regret are provided to the applicants in the event that their application was refused. Following the allotment, the firm is free to pay the share capital in full or in installments as it pleases.

      What is a minimum subscription of share in Bangladesh?

      When the shares are made available to the general public as part of the share issuance, this is the minimum amount that must be raised. The Board of Directors typically determines this minimum subscription, however it cannot be less than 90% of the issued capital. As a result, for the offer to be considered successful, at least 90% of the issued capital must be subscribed for. In this scenario, the application money that has already been received must be refunded within the established time frame.

      What are the shares Issued at Par - Share Capital Account?

      Share allocation is not assured by applying for shares. A few applications will be turned down. In this case, we do not credit the share capital account when the application money is received. We create a new account—a sharing application account—for convenience's sake.

      According to the Companies Act, the funds obtained from the application must be placed in the bank account at a Schedule Bank. This account has been set up specifically to handle the application fee. The following is the journal record for this transaction in the business's books:

      What are the Shares issued at premium?

      We refer to shares issued at a premium as when the corporation chooses to issue shares at a price greater than the nominal value or face value. It is a fairly typical practice, particularly when the business has a solid track record, strong financial results, and a solid reputation. Let's say a share has a face value of BDT. 100 and is issued by the corporation at BDT. 110. It is said that the share was issued at a 10% premium. The premium will be shown in a separate account called the Securities Premium Account rather than becoming a part of the Share Capital account. The corporation can now call up this premium amount whenever it wants, i.e. with any call. The premium is often collected using allocation or application money, and rarely with call money. The Securities Premium Account has been credited with the premium sum that we previously specified. On the liabilities side of the balance sheet, under the heading Reserves and Surplus, is where you'll find this account.

      Infographics
      How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Bangladesh
      Video Tutorial
      Author’s Bio
      About Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

      Meheruba Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.

      Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
      Work highlights

      Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:

      ⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.

      ⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group

      ⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio

      ⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector

      ⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia

      Email: [email protected]

      Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

      Gender: Female

      Job Title: Barrister and Senior Associate

      Have a Different Question?

      Email us anytime : [email protected]

      Or call — +8801847220062 or +8801779127165

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      How To Form An Association In Bangladesh

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