Public Limited Company Registration or Incorporation Procedure in Bangladesh in 2023
Barrister Tahmidur Rahman
Director, Tahmidur Rahman Remura Wahid Law Firm in Bangladesh
24 Jan 2022
In this article we are going to talk about how to incorporate a public limited company in Bangladesh.
Public Limited Company
Public Limited Company in Bangladesh:
A Public Limited Company, according to the Company Act of 1994, is a company that can be formed by at least 7 (seven) people as members and whose membership is open to the public.
A public limited company must register its name as a stock exchange member in order to issue shares. A company must issue a certain number of public shares in order to begin operations.
What to submit to incorporate a Public Limited Company in Bangladesh?
❂ Submission of an application for name clearance to RJSC, along with the Application Form and Proposed Name
❂Drafting of the Memorandum of Articles
❂Creating the Articles of Association and other necessary documents
❂Directors’ decision to establish a new company in Bangladesh
❂Obtaining and filling out the following forms in order to register the company with RJSC:
✅ Form I: Declaration on Company Registration
✅ Form VI: Notice of Registered Office Situation
✅ Form IX: Consent of Director to Act
✅ Form X: List of Persons Consenting to Be Directors
✅ Form XII: Information about the directors, manager, and managing agents.
✅ Taxpayer Identification Number (TIN)
✅ VAT Registration Certificate/BIN (Business Identification Number)
✅ Trade License for Public Limited Company
A Step-by-Step Guide to Form a Public Limited Company in Bangladesh:
The following are the steps for registering a public company in Bangladesh:-
GET A NAME CLEARANCE LETTER FIRST
RJSC must receive an application for name clearance along with the following information:
a) Application Form; b) Name Suggestion.
DOCUMENTATION IS THE SECOND STEP.
a) Preparation of the Memorandum of Articles and Articles of Association, as well as other required documents
b) Resolution of the Board of Directors to establish a new company in Bangladesh;
c) Obtaining and completing the following forms for the Company’s registration with RJSC:
Form I: Declaration on Company Registration;
Form VI: Notice of the status of the registered office;
Form IX: Acting permission from the director;
Form X: List of people who have agreed to serve as directors;
Form XII: Information about the directors, manager, and managing agents.
STEP 3: FORMALITIES IN CONNECTION WITH A BANK ACCOUNT
a. Directors shall open a temporary bank account in the proposed Company’s name with any scheduled bank, with the understanding that the account will be regularized once the Company is duly registered with Company House.
b. Deposit of funds into a bank account.
c. A bank encashment certificate stating that the required capital contribution has been deposited in the proposed organization’s temporary bank account.
STEP 4: DOCUMENT SUBMISSION TO RJSC
Application to RJSC, along with the above-mentioned documents.
Compliances for a Public Company Limited by Shares after registration
◪ (a) Commercial License
The Companies must obtain a trade license from the appropriate City Corporation. The proposed Company must file its application with the nearest City Corporation, along with the necessary documents and fees.
◪ b) Taxpayer Identification Number (“TIN”).
A company must obtain an E-TIN from the National Board of Revenue’s (NBR) recommended website.
◪ (c) Certificate of VAT Registration
The newly formed company must obtain a VAT registration certificate. In this case, an application must be submitted to the National Board of Revenue (NBR).
◪ (d) Fire Safety Certificate
The Bangladesh Fire Service and Civil Defense Authority issue fire certificates.
◪ (e) Certificate of Environmental Clearance
If a company is involved in an industrial project, it must obtain an environment clearance certificate from the Department of Environment by completing the prescribed form.
Special Case (In-Kind Investment, etc.)
The definition of ‘investment in kind’ is not defined in the Companies Act of 1994.
In practice, however, significant investment is made in a Company by a shareholder or a proposed shareholder in a Company incorporated in Bangladesh by investing in machineries and other equipment.
Although CA 1994 does not govern the procedure, the following steps are taken when making such in-kind investments:
The concerned company must be duly registered with RJSC, the concerned investors must complete the relevant Form(s), the concerned investors must have a vendors’ agreement between them, and the completed Form(s) and the vendors’ agreement must be filed with RJSC.
The RJSC will then record the investment and ensure that the proper procedure was followed.
How long does it take to incorporate?
Following completion of the aforementioned formalities, RJSC typically issues 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.
After obtaining name clearance, the clearance is valid for 6 months. Obtaining a name clearance usually takes three working days. Following the receipt of the Name Clearance certificate, a bank account must be opened into which the initial paid-up capital must be transferred from the shareholders’ account.
If there is any foreign investment, the paid-up capital must be remitted through the newly opened bank account using the proper procedure.
Are there any fees associated with incorporation?
The amount of Authorised Capital determines the governmental fees for company registration. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.
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“In Bangladesh, you need at least 2 directors and 2 shareholders to start a limited company. A public limited company, on the other hand, can’t be set up without at least 3 directors and 7 shareholders. In a limited company, there can be no more than 50 shareholders, but there is no limit on the number of shareholders in a public limited company. Directors and shareholders of a limited company or a public limited company do not have to be from the same country or live in the same place.”
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Company formation and registration at Tahmidur Rahman Remura: TRW: The Law Firm in Bangladesh:
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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
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.
- 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).
About Barrister Remura Mahbub | One of the most innovative young lawyers in Bangladesh
Barrister Remura 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.
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]
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