Take An Accurate Guidance To Setup Business In Bangladesh
NetworkBD is your trustworthy partner who is ready to ensure accurate guidance to setup a business in Bangladesh. Starting your own company is exhilarating, but it may also be difficult if you aren’t prepared. NetworkBD will walk you through every stage of the process of beginning a business, including registration, name clearance, and other areas of incorporation, so you know what to expect. NetworkBD is an expert on the following activities. Take a deep dive in the below and know NetworkBD’s expertise.
1. The Sole Proprietorship
There is no simpler business form in Bangladesh than a sole proprietorship. The legal definition of a sole proprietorship is that it is not a separate entity, so the owner and the business are the same things. Owners own all assets and liabilities of their business. Personal assets are not protected from business risks and liabilities. To setup Bangladesh business you need to have unlimited liability as a sole proprietor, which means that if it can’t pay its liabilities, you are responsible for the whole amount.
Bangladeshi law requires a partnership to have a minimum of two and a maximum of twenty members. It is necessary to have a partnership agreement in order to obtain a trade license and open a bank account. There is no requirement that the agreement is registered with the RJSC (Registrar of Joint Stock Companies and Firms). Partners are responsible for their partnership. Bangladesh does not have the concept of Limited Partnership or Limited Liability Partnership. You can learn more about sole proprietorship in the partnership guide.
Companies in Bangladesh fall into one of two categories:
(i) Limited by shares
(ii) limited warranty
The ability to register an unlimited company is technically possible, but these companies are very rare. Limited liability companies are companies whose liability is limited to the amount of their share capital. These companies have their own legal existence separate from their members. They are incorporated under Bangladeshi law. Limited liability companies limit the owners’ liability to the assets of the company, and their personal assets are protected from business liabilities.
There are two types of Bangladeshi Limited Liability Companies:
- A Private Limited Company
- A Public Limited Company
1. A Private Limited Company
There is a difference between a private limited company and a limited liability company in which shares are held by fewer than 50 people and are not available to the general public. Most companies in Bangladesh are privately owned. Private limited companies may have individual shareholders, corporations, or both. Among the various forms of business incorporation in Bangladesh, a private limited company offers the highest level of flexibility and scalability. This is also the most popular type of business entity in Bangladesh. You can find more information about setting up a private limited company in Bangladesh in our guide.
The 5 Key Facts That Entrepreneurs Choose To Form A Private Limited Company:
1. Separate legal entity: A private limited company has its own legal identity, separate from its shareholders and directors. It can acquire assets, incur debt, enter into contracts, sue, or be sued in its own name.
2. Shareholder Liability: The liability of the shareholders is limited to the capital they have agreed to contribute to the company as capital.
3. Continuity: The Company’s existence is not dependent on the continued membership of any of its shareholders. The ease with which shares can be transferred or shareholders changed ensures that the company will continue to exist even in the event of the death, resignation, or insolvency of a shareholder or director.
4. Raising capital is easy: You can raise capital for expansion or other purposes by bringing in new shareholders or issuing more shares to existing shareholders. The majority of investors prefer to invest in companies where there is a separation between personal and business assets. The majority of banks also prefer to lend to limited liability companies.
5. Transfer of ownership is easier: Ownership of a company may be transferred, either wholly or partially, without disrupting operations or requiring complicated paperwork. The company can sell all or part of its total shares or issue new shares to additional investors.
2. A Public Limited Company.
Public limited companies are limited liability companies that may offer their shares to the general public. Public limited companies are subject to more stringent rules and regulations since they are able to raise funds from the public. They must have at least 7 shareholders. These companies typically trade on a stock exchange.
An entity created by two or more partners to conduct business is called a partnership. It is always necessary to have two or more partners for a partnership to exist. The Partnership Act, 1932, defines a partnership as a relationship between people with an agreement to share profits from the business carried on by the individuals acting for the group as a whole. Partnerships must satisfy three essential conditions:
- It is necessary for the partners to come to an agreement either orally or in writing,
- The goal of the partnership should be to share in the profits of its business activities,
- Business must be conducted by all the partners or by any one of them acting on their behalf. The Partnership Act does not define the term person.
NetworkBD’s Core Guidance To Setup Business On Formation
1. Company Name:
The name of the company must be approved (cleared) before incorporation in Bangladesh.
Two directors are required at a minimum. The directors may be local or foreign. Directors must be at least 18 years old and cannot have been convicted of any malpractice in the past. In accordance with the law, a director must own the qualification shares stipulated in the articles of association. Shareholders who are not natural persons can nominate a nominee director.
The Memorandum of Association and Articles of Association must state the authorized capital. It is the maximum number of shares that can be issued (allocated) to shareholders by a company. It is possible for a portion of the authorized capital not to be issued to shareholders. Capital authorized in Bangladesh does not have a maximum or minimum limit.
4. Capital Paid-Up:
Bangladeshi companies are required to have a minimum paid-up capital of one Taka to register. The paid-up capital (also known as the share capital) of a company can be increased anytime after incorporation.
5. The Registered Address:
You must provide a local address for the company’s registered address when registering a company in Bangladesh. There must be a physical address listed on the registration (it can be either a residential or commercial address) and not a P.O. Box.
6. Constitution And Articles of Association:
Incorporating a business requires the drafting of a memorandum of association (MoA) and articles of association (AoA).
NetworkBD's Effective Guidance On Setup Business For Foreigners
It is important that foreigners who wish to open a Bangladesh company take the following factors into account:
1. You must open an account in the name of the proposed corporation with the name clearance obtained from the Registrar of Joint Stock Companies and Firms (RJSC). Then you will need to register with an official company registrar and provide an initial capital payment. A capital payment is required for company incorporation in Bangladesh.
2. It is possible to complete all company incorporation formalities without having to visit Bangladesh. You might have an exception if you open a bank account, depending on which bank you choose.
3. It is possible for all directors and shareholders to be foreigners.
4. If you are only interested in forming a private limited company but do not plan to move to Bangladesh, you do not require a special visa. It is possible to run your company from abroad and to visit Bangladesh on a business visa whenever necessary to attend to company matters on a short-term basis.
5. Work permits are required if you plan to relocate your company to Bangladesh.
7 Required Documents For Setting up Business In Bangladesh
A company registrar in Bangladesh requires the following information for company incorporation:
- The company name Clearance must be obtained for the name.
- The RJSC Memorandum of Association and Articles of Association require that the object clause in the MoA be within 400 words and seven clauses.
- Information about the shareholders (National ID if it is a Bangladeshi shareholder)
- Director’s details (including tax identification number)
- Address of registration
- Subscriber Page and A scanned copy will be required.
- Copy of passport of shareholder and director for foreigners.
NetworkBD Helps To Complete The Registration Process In Below 3 Ways
The Bangladeshi company setup procedure involves three distinct steps:
- Clearance of names:
- A bank account is opened, the initial capital is deposited,
- and finally Register Company
A foreign shareholder must be accounted for in Step ii if the proposal consists of a foreign company.
1. Clearance Of Names
The first step in setting up a Bangladesh company is to obtain a name clearance for the proposed company name. First, you will need to create a username at www.roc.gov.bd. Then, you can apply for name clearance.
After you apply for name clearance, you will receive a bank payment slip and you will have to pay Taka 600 to the designated bank. To get the name clearance, you will need to login to your account on the RJSC website after you have made the payment. Ensure that the name is:
- Identical to or too similar to any existing local company names
- Patents and trademarks are not infringed
- The content is neither obscene or vulgar
- No reservation has been made
A name that has been approved will remain reserved for 6 months following its clearance. If the name is about to expire, you can apply for an extension.
2. A Bank Account Is Opened, The Initial Capital Is Deposited,
It is only necessary to take this step if the proposed company has foreign shareholders. After that, you will need to open a bank account in the proposed company name with a scheduled bank in Bangladesh. You will need to deposit money in the account equal to the shares owned by the foreign shareholder from outside Bangladesh. The Bank will issue an Encashment Certificate, which will be required by RJSC.
3. Register Company
The final step is to submit the required information on the website of the RJSC. You must also upload Form IX and Subscriber Page. You will receive a bank payment slip after completing all the steps for paying the registration fees and stamp duty. Once you make the payment in the bank, you’re done. You must now follow up with the RJSC to obtain the certificate of incorporation. Documents and information will be verified by the RJSC. They will then issue your digitally signed Certificate of Incorporation, MoA and AoA, and Form XII. These documents will be mailed to your email associated with your RJSC account. The incorporation process can be delayed in rare cases if the shareholders or directors are of certain nationalities. When this happens, the authorities may request additional information.
Changes require the filing of a relevant return with the RJSC within a period of time.
Why Trust NetworkBD?
1. NetworkBD is dedicated to aiding you throughout the incorporation process, from the initial inquiry to providing assistance at every stage and incorporating a business that meets your specific requirements.
2. We offer a complete solution for your business creation requirements. Learn why our clients pick NetworkBD for all of their business creation needs.
3. Our goal as one of Bangladesh’s leading company formation professionals is to assist you and your firm while also reducing your administrative burden. Our team of professionals has a wealth of knowledge and can help you with any of your needs.
4. NetworkBD is dedicated to providing great service to its customers. Because of the relationships we’ve formed and the service we’ve provided over the years, our clients keep coming back to us.
FAQs for Guidance To Setup Business In Bangladesh
Do I have a safe place to keep my money?
We place the highest priority on security. We are committed to delivering the most secure platform and app available on the market. We take security seriously. We employ the highest levels of encryption and access protocols.
What are the key requirements for forming a Bangladeshi company?
- At least one shareholder is required, and it can be a local or foreign individual or company.
- One of the directors must be a natural person, over the age of eighteen, and a Bangladeshi resident.
- It is possible for a shareholder who is a natural person to be a director.
- It is necessary to appoint a qualified company secretary. The secretary must reside in Bangladesh.
- The company must have a physical address in Bangladesh.
What is the minimum number of directors needed to register a company in Bangladesh?
Bangladesh requires at least one director in order to register a private limited company. There is no maximum number of directors, although a maximum number of directors is usually specified in the company’s constitution.
Can anyone open a business in Bangladesh?
No matter what nationality someone comes from, they can open a company in Bangladesh as long as they are over 18 and have not been declared bankrupt.