Online Limited Company Formation in Bangladesh
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Congratulations on your decision to start a limited company in Bangladesh. The country ranks 29th on the World Bank’s Business Ready list, which is better than many other Asian nations. With a growing GDP and 210 trade partners, Bangladesh offers great opportunities for running a successful business.
The process of forming a limited company can feel complicated, but Law Advisor BD is here to help. Our experienced lawyers provide clear guidance to make everything simple. You no longer need to rely on other articles, blogs, or videos for answers.
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What Is a Limited Company?
A limited company is a business structure that establishes the business as a separate legal entity from its owners. This means the company can have debts in its name instead of the owners.
And if the company cannot repay the loans, the owners only lose what they invested. The personal properties of the owners will remain protected. This liability protection attracts both local and foreign investors towards limited company formation.
Types of Limited Companies in Bangladesh
Limited companies can have several structures. Here are the major types of limited companies in Bangladesh:
- Private limited companies: Such companies are owned by a small group of shareholders. In Bangladesh, a private limited company needs to have a minimum of 2 shareholders and a maximum of 50. It’s ideal for startups and small businesses to be secure and flexible.
- Public limited companies: A public limited company can raise capital by selling shares to the public through the stock exchange. There is no restriction on the number of shareholders. It’s a suitable model for large businesses that aim for growth and transparency.
- Limited liability partnerships: This business model combines both partnerships and limited companies. Partners can share business management but have limited liabilities. It helps protect personal assets from business debts. Your business can have more flexibility without the complexity of a full corporation.
Requirements for Setting Up a Limited Company in Bangladesh
1. Directors and Shareholding Information
Your limited company needs to have at least two shareholders for registration. Shareholders can also act as directors. Non-residents can own 100% shares of the company in Bangladesh, as there is no legal requirement to include a local partner.
2. Authorized Capital
Authorized capital: It refers to the maximum amount of money your company can raise by selling its shares.
The limit is approved by the government office. In Bangladesh, RJSC is responsible for this job. For instance, if your company’s authorized capital is 1 cr taka, you can sell shares worth up to that amount.
3. Paid-Up Capital
Paid-up capital: It is the amount of money you have already received from shareholders in exchange for shares.
It’s the actual investment made by the owners of the company. Foreign shareholders need to make a TT order to buy shares of a company.
4. Office Registration
You must have a physical address for online registration of limited companies. The address must be of commercial place, as in Bangladesh, as residential areas are restricted to use as a business address.
Steps to Form An Online Limited Company in Bangladesh
For RJSC company registration in Bangladesh, you need to go through several steps. Here is a thorough guidance for limited online company formation:
Step 1: Secure Name Clearance
To be included in the registered company list in Bangladesh, your business must have a unique name. For that, you need to visit the Registrar of Joint Stock Companies and Firms website to check if your desired name is available.
Once confirmed, apply for name clearance through the RJSC portal. Upon approval, you will receive a Name Clearance Certificate. You need to pay BDT 500 for each proposed name.
Step 2: Prepare Necessary Documents
When registering a company in Bangladesh, you will need various documents, including:
- General information of every shareholder and passport-size, color photographs.
- For foreign shareholding, an inward remittance letter from a bank is necessary.
- A pre-board meeting resolution must include details about share allocation, roles and positions, bank signatories, and the company’s objectives.
- Shareholders’ signature in RJSC forms of allocation shares
- Signature on form XII (particular of the directors). The form will contain information on shareholders’ names, roles, addresses, and other required particulars.
Step 3: Open a Bank Account and Deposit Capital
Open a temporary bank account in your proposed company’s name. Deposit the initial paid-up capital into this account. After the deposit, obtain an Encashment Certificate from the bank, confirming the transaction. This step is crucial, especially if your company has foreign shareholders.
Step 4: Submit Registration Documents to RJSC
With all documents ready, submit both digital and physical copies to the RJSC. This includes the following:
- Name Clearance Certificate
- Memorandum of Association
- Articles of Association
- Encashment Certificate
- Form IX and Form XII
Pay the applicable registration fees as determined by your company’s authorized capital. The RJSC will review your application and, upon approval, issue the Certificate of Incorporation.
Post Registration Business Tasks
Once the registration is completed, you will need to get additional licenses to complete the registration procedure. Documents required for limited company registrations are:
- Trade license issued by the City Corporation
- Income tax certificate
- Vat registration certificate
- Import/ export license
- Approval of factory plan, including fire certificate and manpower license.
Benefits of A Limited Company in Bangladesh
- You get the flexibility to raise more money by transferring or selling shares to investors. You can also issue bonds and debentures and raise money from the general public.
- As a shareholder or director of the company, you will have limited liabilities.
- Companies often enjoy tax advantages, such as lower tax rates compared to individual income taxes.
- Ownership can easily be changed or handed over.
Contact Law Advisor BD for Online Limited Company Formation in Bangladesh
Though the Bangladesh government is welcoming towards new businesses, the legal issues can be overwhelming for business owners. This is due to the lack of knowledge of laws and regulations. Law Advisor BD can help you through the process with expert, skilled, and experienced lawyers.
Our team will collaborate with you from the beginning till the end of the business incorporation as well as ongoing support. We will ensure you don’t have to face any legal issues. Get in touch with us for experienced business law services at competitive pricing.
Final Words
Limited companies offer flexibility and reduce risks for small business owners. You can enjoy tax advantages as well as raise capital and keep business debts separate from personal loans.
While limited company online formation is straightforward in Bangladesh, you may still need professional assistance. For any information, support, or consultation, Law Advisor BD is always prepared to help.
FAQs
The fees of registration for both private and public companies can vary depending on the authorized capital. Based on your capital, it can be between 3,000 BDT to 20,000 BDT. The fees of a memorandum of association for private and public companies are, respectively, 1000 and 500 BDT.
You will get updates about the registration via email once it’s completed. You can also check registration status through the RJSC website using the name entity search.
It’s difficult to say the exact duration of business registration. However, in general, it may take between two to three weeks to register a company from the date of submitting all the documents to RJSC.
