Assignment On:

The Process Of Opening A Private Company

Submitted to: Mr. Iftekhar Mahfuz
Dept. of Management
School of business, IUB

Course Name: Introduction to Business Law (Bus360)

Section: 04
Submission date: March 29, 2020

Submitted by:
Safeen Islam 1621017
Susmita Paul 1811232
Tasnim Nahar Ruhee 1820679
Saajed Morshed Jaigirdar 1821457
Mustafa Hossain Bhuiyan 1821564

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Acknowledgement

In completing our assignment, we had to take the help and guideline from our respected faculty
who deserve our greatest gratitude. The completion of this assignment gives us much pleasure.
We would like to show our gratitude to Mr. Iftekhar Mahfuz sir, Lecturer, Independent
University, Bangladesh, for giving us a solid guideline for the assignment throughout numerous
consultations. We would also like to expand our deepest gratitude to all those who have guided
us directly and indirectly in writing this report. Many people, especially our team members
themselves, have made valuable comments and suggestions on this proposal which gave us an
inspiration to improve our task by a large margin. We thank all the people for their contribution
to our assignment.

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Contents
Introduction…………………………………………………………………...……4
Pre- Registration……………………………………………………………………5
Required Documents.................................................................................................7
Registration Procedure..............................................................................................8
Post-Registration Formalities..................................................................................10
Applying For Trade License, Tax Identification Number And Other Licenses:….12
Return Filing Requirements………….…………….……………………………...13
RJSC Fees…………………………………………………………………………14
Conclusion…………….......………………………………………………………16
Reference………………………….……………………………………………....17

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Introduction
A company is called private limited when all its shares are in private hands. Pvt Ltd Company
is owned by a group of promoters. A private limited company, or LTD, is a type of privately held
legal business entity, in which owner liability is limited to their shares, the firm is limited to
having 50 or fewer shareholders, and shares are prohibited from being publicly traded.
Shareholders are not liable for the Company’s debts beyond the amount of share they have
contributed. According to the Companies Act 1994, any person (foreign or local) above the age
of 18 can register a company in Bangladesh. A company becomes an independent legal structure
when it incorporates.
When opening a registered business in Bangladesh, the Registrar of Joint Stock Companies and
Firms RJSC is the sole authority which facilitates formation of companies etc. and keeps track
of all ownership related issues as prescribed by the laws in Bangladesh.
RJSC deals with the following types of entities:

 Private companies
 Public companies
 Foreign companies
 Trade organizations
 Societies
 Partnership firms

RJSC accords registration and ensures lawful administration of the entities under the provisions
of applicable act as under:

1. Companies and Trade Organizations: Companies Act, 1994 (Amendment of

Companies Act 1913
2. Societies : Societies Registration Act, 1860
3. Partnership Firms : Partnership Act, 1932

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PRE-REGISTRATION
Company Name:

 The name must be certified and given Clearance before incorporation of the company in
Bangladesh.

Directors:
 Minimum two director Required which can be either local or foreign.
 Must be at least 18 years of age and must not be bankrupt or convicted for any
misconduct in the past.
 The law requires that a director must own qualification shares stated in the Articles of
Association.
 A shareholder can select and nominee director.

Shareholders:
 A private limited company in Bangladesh can have a minimum of 2 and maximum of 50
shareholders.
 A director and shareholder can be the same or a different person.
 The shareholder can be a person or another legal entity such as another company.
 100% local or foreign shareholding is allowed in most sectors.
 New shares can be issued or existing shares can be transferred to another person any time
after the Bangladeshi company has gone through the incorporation process.

Authorized Capital:
 One must state the authorized capital in the Memorandum of Association and Articles of
Association.
 It is the maximum amount of share capital that the company is authorized to issue
(allocate) to shareholders.
 Part of the authorized capital can remain unissued.
 There is no minimum or maximum limit for authorized capital in Bangladesh.
Paid-up Capital:
 Minimum paid-up capital for registration of a Bangladeshi company is Taka 1.
 Paid-up capital can be increased any time after the incorporation of the company.
Registered Address:
 In order to register a company in Bangladesh, you must provide a local address as the
registered address of the company.

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  The registered address must be a physical address and cannot be a P.O. Box.
Memorandum and Articles of Association:
 The company to be incorporated must prepare a memorandum of association (MOA) and
articles of association (AOA).

Considerations for Foreigners:

Foreigners wishing to open a Bangladesh company, must take into consideration the following
points –
 You must open a bank account in the name of the proposed company with the name
clearance obtained from the Registrar of Joint Stock Companies and Firms (RJSC)
i.e. the registrar of companies and bring in the initial paid up capital. This is a mandatory
for company incorporation in Bangladesh.
 All company incorporation formalities can be handled without one having to visit
Bangladesh. The only exception may be opening a bank account, depending upon the
bank you choose.
 All the director and shareholders can be foreigner.
 There is no requirement for one to obtain any special Bangladesh visa if one just want to
incorporate a private limited company but have no plans to relocate to Bangladesh. You
are free to operate your company from overseas as well as free to visit Bangladesh on a
business visa whenever required to attend to company matters on a short-term basis.
 For relocating and operating foreign company, one required to obtain a work permit.

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Required Documents

To complete the registration procedure of company incorporation in Bangladesh, the following

information is required.

1. Company Name: A name clearance must be obtained.

2. Memorandum of Association & Article of Association
 RJSC requires that the object clause in the MOA be obtained within 400 words and 7
clauses
3. Shareholders/Directors particulars:
 Address, Tin, NID, Password & Download an Instruction from (National Id
shareholder is a Bangladeshi)
4. Directors Particulars: Including Tax identification number.
5. Registered Address: The register company have to put the address of their office
premise in the following gap.
6. Singed Form IX and Subscriber Page: Scanned copy in pdf will be required
7. For foreigners:
 Copy of passport of shareholder/director
 Encashment Certificate: The authorizations are granted to persons or firms of
adequate means and status as their sole line of business, the purchase and sale of
foreign currency notes

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Registration Procedure

Company registration procedure in Bangladesh is partially computerized. There are three steps
involved in the Company setup procedure in Bangladesh:
i. Name Clearance
ii. Bank account opening and bringing in the paid up capital
iii. Company Registration.

NOTE : Step ii is only applicable if there is any foreign shareholder in the proposed company.

STEP 1: Name Clearance

To set up a company, the first step would be to obtain a name clearance for the proposed
company name. Visit www.roc.gov.bd and create a username first to apply for name clearance.
For chances of quick name approval, make sure the name:
i. is not identical or too similar to any existing local company names
ii. does not infringe with any trademarks
iii. is not obscene or vulgar
iv. is not already reserved

Process:

1. Name Clearance (NC) is a pre-requisite for registration of a new entity (other than
Foreign Company and Partnership Firm).
2. The promoters of a new entity (other than Foreign Company and Partnership Firm) need
to apply for and get name clearance for the entity prior to applying for registration.
3. The promoters submit NC application to the designated RJSC office through website.
4. The promoters pay NC application fee to the designated Bank.
5. On receipt of a NC application and fees, RJSC provides name clearance for the new
entity upon satisfaction that it does not closely match or resembles with any of the
already taken names (registered, booked or under the process of registration of the same
entity type).
6. The name clearance remains valid for 30 days (society 180 days) from the date of issue.
You can extend the name by filing an extension request just before the expiry date.
7. The promoters need to apply for registration of the cleared name within the validity (as
stated above) of name clearance.
8. NC is not required for registration of a Foreign Company.
9. Documents Constituting a NC Application.

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After making the application for name clearance, a bank payment slip will appear and a payment
will have to be made of Taka 600 to the designated bank. After making the payment, log in to the
account on the RJSC website and get the name clearance.

STEP 2: Bank Account Opening and Bringing In the Paid Up Capital

*This step is only applicable if the proposed company has foreign shareholding.
Open a bank account in the proposed company name with any scheduled bank in Bangladesh.
Once opening the account, remit money equal to the shares to be owned by the foreign
shareholder from outside Bangladesh in the account. The Bank will issue an Encashment
Certificate which will be required by RJSC for incorporation.

STEP 3: Register Company

The last step is to submit all the required information in the RJSC’s website. Promoters of a new
entity apply for, and RJSC issues a certificate of incorporation for a new entity upon satisfaction
that the application conforms to the provisions of the applicable act and that requisite fees are
paid. The Form IX and Subscriber Page is required to be uploaded. After the process is complete,
you will receive a bank payment slip for paying the registration fees along with stamp duty.
On making the payment in the bank, the registration is complete. Now, follow up with the RJSC
for obtaining the incorporation certificate. RJSC officials will check the documents and
information. If they are satisfied, they will issue the digitally signed
 Certificate of Incorporation
 MOA (Memorandum of Association defines objectives, powers and constraints of the
organization as a whole) and,
AOA (Association of Articles describe powers, duties, rights and liabilities of individuals
associated with the organization like members of the Board of Directors.
 Form XII: Particulars of the directors, manager and managing agents
i) Trade License
ii) Tax Identification Number (“TIN”)
iii) VAT Registration Certificate
iv) Fire Certificate
v) Environment Clearance Certificate

These documents will be mailed to the email address associated with the RJSC account.
There are cases when the incorporation procedure can get delayed if the shareholders or directors
are of certain nationalities, although this happens in rare cases only. In such cases, the authorities
might ask for additional information.

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Post-Registration Formalities
Documents Issued By RJSC:
Certificate of Incorporation: RJSC will issue a Certificate of Incorporation of the company.
The certificate will have the registration number, name of the company and the date of
incorporation.
Form XII: Form XII contains the list of directors of the incorporated company.
Certified copies of;
The Memorandum of Association (MOA) sets down the constitution of a company containing
certain fundamental matters. It is a basic document for the very existence of the company.
Name Clause: The name of the Company must be stated with the last word ‘Limited’ in case of
public companies and with the last two words ‘Private Limited’ in case of private companies.
Situation Clause: The Memorandum of Association must mention the State in which the
registered office of the company will be located. That is, the domicile of the company should be
stated for the determination of jurisdiction of the Court, as well as of the Registrar.
Object Clause: Any number of lawful objects can be stated and included in this objects clause,
whether the company engages in all those activities or not.
Liability Clause: A company limited by shares or by guarantee must state that liability of its
members is limited.
Capital Clause: The MOA of the company having a share capital is required to show the amount
of share capital with which the company is going to be registered, and the division thereof into
shares of a fixed value.
Association and Subscription Clause: An association clause signifying the desire of subscribers
to form themselves into a body corporate should be appended in all cases at the foot of the
Memorandum.
and
Articles of Association (AOA of Private Limited Company) regulates domestic management of a
company and creates certain rights and obligations between the members and the company. The
Articles of Association are in fact the by-laws of the company according to which directors and
other officers are required to perform their function as regard the management of the company,
its accounts and audit.

Some of the other items you will almost certainly need upon registration of your Bangladeshi
company include:
• Share certificates for each of the shareholders.
• Register for shareholders, shares, directors with RJSC.

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• Company seal for the company for official and banking purposes.
• A rubber stamp for the company
• A company branded note pad for paper work.

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Applying For Trade License, Tax Identification Number And Other Licenses:

Firstly, after the incorporation, buy a commercial space or, rent some space in any commercial
area. Then need to apply for Trade License and Tax Identification Number. Finally, depending
on company’s business activities, may need to obtain more business licenses.
Process: Trade license for a commercial firm
STEP 1: Procure the proper form from the proper office.
Dhaka City Corporation (DCC) has two forms for a trade license depending on the type of
business. A commercial firm must use the “K” Form. Even though the ten zonal offices use the
same K Form, a business must buy the form from its respective zonal office. A seal and the
initials of the officer selling the form is what distinguishes it from that of other zones. The form
costs Tk. 10.
STEP 2: Get certification from the local ward commissioner.
After the form is completed it has to be submitted to the local ward commissioner for validation.
STEP 3: Collect license book by tk. 50 and submit application with supporting
documentation to DCCs zonal office.
For the K Form, a rent receipt for the premises where the business is operating from or, if owned,
the municipal tax payment receipt has to be provided. Supporting documents include: 3 copies of
PP size photo of owner Rent receipt or premises ownership proof
STEP 4: Await enquiry by the Licensing Supervisor (LS).
Upon submission of the form, the LS usually goes to the business entity for a visit to verify the
information provided.
STEP 5: Pay predetermined fee and collect trade license.
After inspection by the LS is concluded, the business is asked to go to the DCC office to pay the
predetermined fee and collect their trade license. The fee schedule depends on the business
category under which the application was filed.
STEP 6: Signboard fee
When collecting the trade license, a signboard fee has to be paid as well. For all types of business
the signboard fees will payable 30% of the License fee.

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Return Filing Requirements

 Annual Return:
Each calendar year, an Annual General Meeting must be held. The AGM must be conducted
within 18 months of company incorporation, after which no more than 15 months can elapse
between one AGM and the next to ensure all general startup activity is disclosed.
 Regular Return:
In case of any change in the board of directors or in the shareholding structure or any other
change, a relevant return must be filed with the RJSC within a certain period of time for approval
and recording.

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RJSC fees
To apply for Name Clearance, Registration, Certified Copies and to submit returns, fees and
stamps are to be provided as under:

Fees of Name Clearance

 For NC clearance: @ BDT 600.00 for each of the proposed names.
 For time extension: @ BDT 100.00 for each time extension application.

Stamps and Fees of Registration

PRIVATE COMPANY (Companies Act, 1994)
Stamps
 For affixing on the Memorandum of Association: BDT 500.00
 For affixing on the Articles of Association:

For Authorized Capital Stamps

Up to 10, 00,000.00 2,000.00 BDT
> 10, 00,000.00 up to 3, 00, 00,000.00 4,000.00 BDT
> 3, 00, 00,000.00 10,000.00 BDT

Registration fee
 For filing 6 documents (5 filled in forms plus 1 memorandum & articles of association, at
BDT 200.00 per document): BDT 1,200.00
 For the authorized share capital:

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Authorized Capital (BDT) Fee (BDT)

i. Up to 20,000.00 360.00

ii. Additional for every 10,000.00 or part 180.00

After first 20,000.00 up to 50,000.00

iii. Additional for every 10,000.00 or part after 45.00

First 50,000.00 up to 10,00,000.00

iv. Additional for every 10,000.00 or part after 24.00

first 10,00,000.00 up to 50,00,000.00

v. Additional for every 1,00,000.00 or part after 45.00

first 50,00,000.00

Fees of Winding Up
 For Private and Public Company: BDT 20.00
 For Trade Organization and Foreign Company: BDT 10.00

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Conclusion
The objective of the report is focused on how one can register a private limited company in
Bangladesh. Through the research we found out the process from RJSC and other websites. It
covers an overall view as an attempt to show the detailed description about the government
institutions, paperwork and fees involved in the formation of a private limited company in the
legal system under The Companies Act 1994 in Bangladesh.
The purpose of this paper is to portray and explain the process of registering an organization.
After which the pre-registration process where you will find all the information that need to be
predesignated to prepare all the essential documents in hand we move on to the registration
process where one must comply with a tree step process to move to the post registration process
which consists of submitting all acquired legal documents after which one must file for all
necessary licenses and permits and ending with annual return filing policies. Apart from the
detailed discussion of the processes, required papers and benefits, the reader of the report can
easily grasp the rules and regulatory system of Bangladesh regarding registration of a Private
Limited Company.

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Reference
 http://bida.gov.bd/wp-content/uploads/2019/01/9.html
 https://www.slideshare.net/MahmudurRahman100/start-up-in-bd
 https://supremeip.com/company-incorporation/
 https://www.sfconsultingbd.com/company-registration-in-bangladesh/
 www.roc.gov.bd
 http://www.roc.gov.bd/site/page/5b4429e4-e6b6-4c26-b0d1-3b2e1fa13642/What-is-Name-
Clearance?-
 https://roc.portal.gov.bd/sites/default/files/files/roc.portal.gov.bd/forms/6ad39f2f_1cd0_4910
_acce_7f477f3def68/FORM%20IX%20pdf
 https://roc.portal.gov.bd/sites/default/files/files/roc.portal.gov.bd/forms/6ad39f2f_1cd0_4910
_acce_7f477f3def68/FORM%20XII%20(3).pdf
 http://www.roc.gov.bd/site/files/cb0ec134-4687-46ea-83a0-c0676ca6e8bd/Memorandum-of-
Association
 http://www.roc.gov.bd/site/files/1dad0e67-39ac-4dc1-b806-7ecf5185ff22/Article-of-
Association

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