Forms of Incorporation

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    According to Forms of Incorporation Companies Act of 1994, company registration in Bangladesh takes a variety of Forms of Incorporation. The procedures vary depending on the types of company registration available in Bangladesh.


    To comprehend how to incorporate or register a company in Bangladesh, we must first comprehend the types of businesses you wish to register or incorporate. If one does not know the correct and applicable company incorporation procedure in Bangladesh, it could be a difficult process. As a result, this guide will assist you in understanding the step-by-step process of forming a company in Bangladesh.


    The process of forming a company in Bangladesh is governed by a number of acts and provisions. The Registrar of Joint Stock Companies (RJSC), also known as the Bangladesh Company House, is the regulatory body in charge of company registration in Bangladesh. The following will provide an overview of the process and what may be required to have a business incorporated or registered in Bangladesh.

    Forms of Incorporation

    Forms of Incorporation Offers 3 Main Types Of Businesses:


    1. Company limited by shares,
    2. Company limited by guarantee; and 
    3. Company with unlimited liability.


    Registration of a company limited by shares is the most common type of company Forms of Incorporation in Bangladesh. The Companies Act of 1994 does not provide a step-by-step procedure for forming a company in Bangladesh, as this is primarily handled by the Registrar of Joint Stock Companies and Firms (RJSC), the Bangladesh Company House.

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    1. Private Limited Company:


    In Bangladesh, a large number of businesses are registered as private limited companies (LLC). The liability is limited to the shared capital of the shareholders, and LLCs in Bangladesh can be entirely owned by foreigners.

    Anyone over the age of 18 is eligible to form a corporation. A minimum of two and a maximum of 50 shareholders, as well as two directors, are required by law. Also keep in mind that you can form a joint venture with a local company to pool your resources and reduce risk.


    2. Public Limited Company:


    A public limited company, on the other hand, can invite the public to buy shares and is usually listed on a stock exchange. A public limited company must have at least seven members, three directors, and no more than one hundred shareholders. Its shareholders can be any legal entity or individual over the age of 18 who meets Bangladesh’s legal requirements.

    It has the ability to raise funds from the general public. It should also comply with the Securities and Exchange Commission Act 1993, in addition to the Companies Act of 1994.


    Forms of Incorporation : Alternatives to establishing a business in Bangladesh:


    3. Branch:


    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 subsidiary.

    With BIDA’s permission, a branch can engage in commercial activities. The Exchange Control Guidelines, on the other hand, keep a close eye on its operations. The approximate time to set-up a branch office is 45 to 60 days in Bangladesh.


    4. Liaison/Representative Office:


    A liaison, also known as a representative office, is subject to BIDA approval as a primary requirement, just like a branch. It must have a parent company outside of Bangladesh, and its activities are limited because it only serves as a communication or coordination tool for the country’s business resources.

    Also, keep in mind that a liaison office in Bangladesh cannot earn any local revenue. All of the parent company’s expenses and operational costs are covered by remittance. Except for the money brought in from abroad, no outward remittances of any kind can be made from Bangladesh resources. Similarly, it follows Bangladesh’s general business registration procedure.


    5. Franchise operation with local marketers:


    Franchises are obtainable in Bangladesh for foreign-owned industries. You can use a franchise to allow local promoters to use your brand, provide technical support, and charge fees or commissions for their activities. The purchase and license agreements are both followed by a franchise operation.

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    Many new business owners may be unaware that they need to apply for a business license. Network BD can assist you in finding and applying for the appropriate license. Following incorporation, depending on the type of activities your company will engage in, you may need to apply for certain licenses. A business license is a government of Bangladesh permit that allows you to operate a specific type of business. For a variety of reasons, these licenses are required to assist the relevant government authorities in paying closer attention to businesses in these industries. Hotels, security services, and appraiser services are examples of these industries. A basic operating license isn’t enough for some businesses. They may require special permits, and regulations differ by industry and profession. It is critical for business owners to be aware of the licensing rules that apply to their industry. Failure to comply can result in hefty fines and jeopardize a company’s future.


    In Bangladesh, a trade license, also known as a business license, is a document that certifies that you are authorized to conduct business in the field specified in the trade license. As a result, in Bangladesh, it’s also known as a business permit or a business license.


    In Bangladesh, all businesses, whether sole proprietorships, partnerships, or limited liability companies, require a trade license to operate. After successfully forming/registering a company in Bangladesh, one must obtain a trade license in order to conduct business in the country.


    The respective City Corporation Offices in Bangladesh or City Council Offices in Bangladesh of the respective district can issue a Trade License. Therefore, the Local Government (City Corporation) Act 2009 and Municipal Taxation Rules, 1986 offer the legal framework for attaining Trade Licenses in Bangladesh.


    It is critical to select the correct application form based on the location of the businesses in order to obtain the Trade License that is appropriate and appropriate for your business. Furthermore, the process of obtaining a trade license differs for manufacturing and commercial businesses, as do the business’s checklist requirements.

    FAQ For Forms of Incorporation

    What type of companies require incorporation?

    When it comes to different types of businesses, the following four are frequently mentioned: S corporations, C corporations, limited liability companies, and non-profit organizations.

    What documents are necessary to form a corporation?

    The filing of articles of incorporation is one of these steps. Articles of incorporation are a document that serves as a charter to acknowledge the formation of a corporation and is required to register a corporation with a state.

    Why should a company incorporate?

    Most important reason for firms to incorporate is to preserve the founders’ personal assets. When you incorporate a company, you create a separate legal entity. This means that your company’s assets and obligations can be kept separate from your personal holdings.

    What are the incorporation fees?

    The costs a company incurs before it starts doing business are known as incorporation costs. To start a business, all corporations need money — even LLC and LLP business forms have fees — but the types of expenses differ per firm.

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