Partnership Deed Registration in Bangladesh
A partnership is a commercial arrangement in which two or more partners form an entity to do business. For Partnership Deed Registration in Bangladesh, you have to keep in mind a partnership must always have at least two participants!
The Partnership Act of 1932 (the “Partnership Act”) defines a partnership as ‘the relationship between persons who have agreed to share profits of the business carried on by all or any of them acting for all’. This definition outlines three minimum prerequisites for forming a partnership:
There must be an agreement entered either orally or in writing by the individuals who wish to form a partnership.
The agreement’s purpose must be to share the earnings of the business that the partnership intends to conduct, and
The business must be run by all of the partners or by one of them acting on their behalf. The term ‘person’ is not defined under the Partnership Act.
Registration of your partnership firm is optional, and there are no consequences for failure to do so. However, it is recommended because the following privileges are denied to an unregistered company:
A partner cannot launch a lawsuit in any court against the firm or other partners to enforce any right resulting from a contract or right conferred by the Partnership Act.
Your firm cannot enforce a contract-based right against a third party in any court.
Furthermore, the firm or any of its partners cannot seek a set-off (i.e., mutual adjustment of obligations due by disputant parties to one another) or other legal action in a dispute with a third party.
PARTNERSHIP: QUICK FACTS
LIABILITY
In Bangladesh, a partnership is only considered a separate legal entity (i.e. separate from its owners) if it is registered.
A partnership’s obligation is shared by all of its partners, both jointly and severally.
Limited Liability Partnerships do not exist in Bangladesh.
TAXATION
Partnerships in Bangladesh are not taxed at the entity level, and profits are recognized as part of each partner’s personal income and taxed accordingly.
MEMBERS AND MANAGEMENT
There must be at least two and no more than twenty partners.
Partners can be individuals or companies.
In contrast to private or public limited firms, a partnership in Bangladesh has no directors, shareholders, or secretaries; instead, the partners own and operate the business.
PARTNERSHIP REGISTRATION: DOCUMENTS REQUIRED
To register a partnership in Bangladesh, the following information and documents are required:
- Proposed partnership name:
- Partnership agreement officially notarized.
- Form I:
- Details about the partners:
- The partners’ residential address
- Details of the partnership’s registered address;
- Percentage of each partner’s share of profits.
- Partnership – Registration Procedure
A partnership can be registered with the Registrar of Joint Stock Companies and Firms of Bangladesh (“RJSC”).
The partnership registration process consists of two steps: a) name reservation, and b) entity registration. Typically, a partnership registration can be completed in one or two days.
Step 1: Choosing the Partnership Name
The partners are entitled to choose any name they want for their partnership firm, subject to the following rules:
The names must not be too similar or identical to the name of another current firm conducting similar business, since this could cause misunderstanding. The rationale for this restriction is because a firm’s reputation or goodwill may suffer if a new firm adopts an allied name.
The name must not contain phrases that convey or imply government sponsorship, approval, or patronage.
Once you’ve decided on a name, you should apply for name clearance on RJSC’s website.
- Step 2: Prepare a Partnership Deed.
You should prepare a partnership agreement. Typically, a partnership deed includes the following clauses: - Name and address of the firm, including all partners;
- Nature of the business to be carried out
- Date of the start of business;
- Duration of partnership (whether for a defined duration or indefinitely);
- Each partner makes a capital contribution.
- Profit-sharing ratio among partners.
- Rules should be followed in the event of retirement, death, or the entrance of a partner;
- The foregoing are the minimal requirements for all partnership deeds. The partners may additionally specify any extra clauses.
- The partnership deed should be on stamp paper in conformity with the Stamp Act and signed by all partners. Then it should be notarized.
Step 3: Register the Partnership Deed with RJSC.
The partnership agreed and filled up. Form I should be filed with RJSC. The records will be evaluated by RJSC personnel. When the officials are pleased with the points indicated in the partnership deed, he will record the statement in a register known as the Register of Firms and give a Certificate of Registration.
Bangladesh has a diverse business landscape. One of these is a partnership firm, while the others are proprietorships and limited companies. A Partnership Firm is founded under the provisions of the Partnership Act of 1932. The Registrar of Joint Stock Companies and Firms (RJSC) is Bangladesh’s primary body for registering partnership firms. For Partnership Registration in Bangladesh, we must follow specific processes, which will be discussed at the end of this post.
When two or more persons, particularly those with similar interests or professions, start a firm and enter into a voluntary agreement with the purpose of making and sharing profits, this is referred to as Partnership firm. A partnership business can be formed with as few as two people and as many as twenty.
Partnership Registration with RJSC is now required in order to open a bank account for a partnership business. Many unregistered Partnership Business owners will seek to register their Partnership Firm with RJSC. However, in order to obtain certain legal benefits, Partnership Business Registration with RJSC is required.
Partnership Agreement, often known as the Partnership Deed. Usually, the following terms and conditions are included in a partnership agreement:
- Name, Current Address, and Permanent Address of the Partner.
- Name of the partnership firm.
- Business Type and Address
- Duration of Partnership
- Share of profit taken by each partner
- Amount of capital contribution by each partner
- Terms of Retirement
- Mode of Management
- Interest on Borrowings
- Dissolution of Partnership
Steps for Registering a Partnership in Bangladesh:
A partnership firm might be registered at the moment of formation or even later. An application should be filed with the RJSC and should include the following information:
- Take Name Clearance. Certificate of the Partnership Firm.
- Date of Formation of the Partnership Firm
- Duration of the Partnership Firm.
- Please provide a full address for your primary business location when joining. Date of Partners
- Particulars of Partners
- Business details must be supplied using the required Form-I.
We recommend that you register your existing Partnership Firm soon to avoid unexpected scenarios. In addition, if you form a new partnership firm, you must register with RJSC in Bangladesh. To learn more about RJSC.
Benefits of Partnership Business:
Partners contribute start-up capital, allowing for greater flexibility and possibility for growth.
A partnership firm is typically easier to establish, operate, and administer. Partnership firms have less stringent rules and regulations than corporations. As long as all partners agree, they can run their firm whatever they want.
Each partner contributes new ideas and abilities to the firm. It is easier to make a decision to solve a problem since there are more brains to think about it. Every partner can share their roles and responsibilities in the firm.
After completing Partnership Registration in Bangladesh, you should obtain the following documents to begin operating your business:
- Trade license and TIN certificate for newly registered partnership firms.
- Bank Account VAT Registration Certificate
- Import Registration Certificate (For Import Business)
- Export Registration Certificate (For Export Business)
