Share Transfer Process of a Bangladeshi Company | Cost, Documents| Overview

Tahmidur Rahman, Senior Associate, Counsels Law Partners

9 January, 2020

What is ‘Share’ according to Bangladeshi Law?

The term ‘share’ is defined in Sec. 2 (1) (v) of the Companies Act of 1994, which reads as below:

  “Share means a share in the share capital of a company, and includes stock except where a distinction between stock and share is expressed or implied.”

Why a Company would like to Transfer Share in Bangladesh 

Share Transfer Process of a Company in Bangladesh can be a seamless process for both private and public limited companies. If someone (who is the company’s shareholder) wants to transfer his / her share to another person or if he / she does not want to remain the shareholder or director of this company, he / she may leave the share to someone else. Basically the existing shareholder of the company buys this particular share otherwise the new shareholder or director of this company may be involved by purchasing the transfer share. Monitoring of this activity by the Joint Stock Company Registrar and Firms (RJSC). The share allocation of the company is also a process that gets monitored by RJSC in Bangladesh.

The managers of the company may want to add experienced or veteran professional for some time to increase the business capacity of the company. The addition of a new shareholder or the company’s director is therefore a fairly conventional process. Companies generally include experienced business people in a particular area or country to increase the market and profit ratio of the company. RJSC is the only authority in Bangladesh for Company Registration, Share Transfer, Share Allotment, Wind-up and related business activities.

How to Share Transfer of a Company in Bangladesh?

In this infographics, the six steps is shown on how to transfer company shares in Bangladesh.

Shares in a company registered in Bangladesh are a movable property that can be transferred in a manner given in the company’s Articles of Association. But before proceeding with the Transferring Shares process, it is important to remember that the right to transfer shares may be restricted in a private limited company. Share Transfer Process of a Company is pretty straightforward if it’s not then.

If you want to know how to open a company in Bangladesh or about company formation click here!

  • Step by Step Process of Registering a Company in Bangladesh

Six Steps of Transferring Company Shares in Bangladesh

 

Here we have described in details (six steps), the procedure of transferring shares of a private limited company registered in Bangladesh.

 

Step1: Find out whether there was any existing restrictions against Share Transfer

 

The share transfer in a Private Limited Company can be restricted by the Articles of Association (AOA). Thus, the Articles of Association of the Company must be assessed before starting the offer exchange method. It is basic in Bangladesh that the organisation’s articles of affiliation typically contain pre-concurred methodology set out that are required to be followed for any exchange of offers in the organization.

 Limitations on right of the investors to move shares are for the most part as pre-emption. Which implies that if an investor wishes to sell a few or the entirety of his offers, such offers should initially be offered to other existing individuals from the private constrained organization at a value controlled by the Directors or the Auditor of the Company. In no current investor is intrigued, at that point portions of the Company can be unreservedly moved to an untouchable.

On the off chance that there is any limitation or extraordinary techniques, those confinement or strategy must be followed for any offer transfer.Which implies that if an investor wishes to sell a few or the entirety of his offers, such offers should initially be offered to other existing individuals from the private constrained organization at a value dictated by the Directors or the Auditor of the Company. In no current investor is intrigued, at that point portions of the Company can be openly moved to an outcast.

Hence, all the license, permits, agreement etc. should be checked for any restriction imposed on share Transfer Process of a Company. If there is any restriction, prior approval should be obtained.

 

Step 2: Notify the Board of the Directors of the Company

 

The Shareholder intending to move the offers should serve notice recorded as a hard copy to the Board of Directors of the Company about expectation to move portion of the organization. The Director may have the forces to deny enlistment of move of offers in specific situations – endorsed in the Articles of Association. The Board of Directors should hold an executive gathering and endorse the exchange of the offers. The Director ought to likewise give a declaration in this respect. 

Step 3: Paying the Price of the intended shares

Once the company has granted its approval, the price of the shares should have been paid. If both buyer and seller are local or foreign, there is no requirement for proof of payment. However, if the seller is a Bangladeshi and the buyer is a foreigner, the Joint Stock Companies and Firms Registrar (RJSC) will require a letter of bank encashment for the transfer of the share.

Step 4: Completion of Form 117

Once the company has granted its approval, the price of the shares should have been paid. If both buyer and seller are local or foreign, there is no requirement for proof of payment. However, if the seller is a Bangladeshi and the buyer is a foreigner, the Joint Stock Companies and Firms Registrar (RJSC) will require a letter of bank encashment for the transfer of the share.

“Counsels Law Partners is Considered as one of the leading firms in Company Law in Dhaka, Bangladesh”

Carpe Noctem Bangladesh

Step 5: Payment of Stamp Duty

Stamp duty is payable on the face value of each share.

Once the Form 117 is signed, a copy of the same should be delivered to the Company.

Step 6: AMENDMENT OF THE SHARE CERTIFICATE REGISTRAR BOOKS AND ISSUANCE.

Upon completion of the above steps, the company should update its share registrar, share transfer registrar, minutes registrar, and issue a share certificate in favour of the new shareholder or modify the existing share certificate to reflect the changes.

Essential documents needed for Share Transfer of the Company

 

Essential documents needed for Share Transfer of the Company:

1. Letter from Company’s board of director approving the transfer company’s share.
2. A document indicating Number of shares to be transferred of the Company.
3.A completed (signed) Company form 117.
4. Board Resolution by the company approving the transfer of the shares; and
5.Certificate of Transfer of Shares.

How to open a Liaison office in Bangladesh – Liaison office formation in 2020

How to open a Liaison office in Bangladesh -Registration and Incorporation Procedure of Liaison office in BangladeshTahmidur Rahman, Senior Associate, Counsels Law Partners2 Feb 2020This post in details will explain in details about the process of opening a liaison...

Foreign Investment in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know in 21st century

How to invest in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know about Foreign Investment in 21st century BangladeshTahmidur Rahman Director and Senior Associate, Counsels Law Partners17 Jan 2020Leading up to initiating a major investment ,...

Mergers and Acquisitions process | A complete overview with 14 simple steps

Mergers and Acquisitions in Bangladesh: A Complete guide with 14 stepsTahmidur Rahman Director and Senior Associate, Counsels Law Partners27 Dec 2019Our clients profit from a leading global M&A practice that has worked on more M&A transactions than any other...

NGO and INGO Registration Procedure in Bangladesh

NGO registration in Bangladesh- A complete guide in 2020- Everything you need to knowTahmidur Rahman, Senior Associate, Counsels Law Partners2 Jan 2020This post in details will explain in details about NGO and INGO registration in Bangladesh, the timeline, the...

Charter Party shipping contract in Bangladesh at 2020: Complete guide

Charter Party shipping contract in Bangladesh at 2020: A Complete guideTahmidur Rahman, Senior Associate, Counsels Law Partners2 Jan 2020This post in details will explain in details about charter party shipping contract in Bangladesh. The Charter Party Shipping...

Liquidation or Winding up a company in Bangladesh | Everything you need to know

Liquidation or Winding up a company in Bangladesh | Solvency declarance, Board meeting, declaration filings| Everything you need to know.Tahmidur Rahman, Director and Senior Associate12 Nov 2019This post in will explain in details about the process of Liquidation or...

Branch office registration in Bangladesh | Step by step process of setting up a branch company

Branch office registration in Bangladesh | Step by step process of setting up a branch company in BangladeshTahmidur Rahman, Director and Senior Associate11 Nov 2019This post in will explain in details about Branch office registration in Bangladesh - This article will...

Immigration and Citizenship laws of Bangladesh | Work permit and All visas

Immigration and Citizenship in Bangladesh| All types of visas, work permits and everything  you need to know.Tahmidur Rahman, Director and Senior Associate20 Oct 2019Immigration and Citizenship in Bangladesh- This post in will explain in details the  Immigration Law...

Defamation law in Bangladesh| Offence and Remedies

Defamation Law in Bangladesh and regarding its offences and remedies| Everything you need to knowTahmidur Rahman, Director and Senior Associate20 Oct 2019This post in will explain in details the Defamation Law in Bangladesh - offences and remedies, everything about...

E-Commerce Company Formation in Bangladesh

E-Commerce Company Formation in Bangladesh| Complete Overview of Starting an E-commerce Business.Tahmidur Rahman, Director and Senior Associate25 November 2019 E-commerce business formation in Bangladesh: E-commerce is actually one of Bangladesh's fastest growing...
Want new articles before they get published?
Subscribe to our Awesome Newsletter.

Charitable Trust in Bangladesh

Charitable Trust in Bangladesh

Charitable Trust in Bangladesh | Laws, Formation, Regulation of Charitable Trust| Everything you need to know about Charitable Trust in BangladeshTahmidur Rahman, Senior Associate, Counsels Law Partners2 Oct 2019This post in will explain in details about Charitable...

Call Now