Practical corporate advice from Supreme Court practitioners. Always consult legal counsel before signing founder equity schedules, RJSC filings, or commercial agreements.
Companies Act 1994 As per , A Public Company, is a Company which can be formed by at least seven persons as members and the membership is open to the public.
How to Incorporate a Public Limited Company in Bangladesh?
Companies Act 1994 The does not provide the step by step procedure on how to set up a Company rather deals with the statutory requirements of Company incorporation. It is dealt by the RJSC, the appropriate body; which provides the detailed guideline on its official website regarding the procedure of setting up a Company from name clearance to incorporation.
Step by Step Procedure as to how to incorporation a Public Limited Company in Bangladesh
STEP 1: OBTAIN NAME CLEARANCE LETTER
Application for name clearance to RJSC along with the following information:
a) Application Form;
b) Proposed Name.
STEP 2: DOCUMENTATION
a) Drafting of Memorandum of Articles and Articles of Association and other required documents,
b) Directors’ resolution to open a new Company in Bangladesh;
c) Obtaining and filling up the following forms for registration of the Company to RJSC:
Form I: Declaration on registration of Company;
Form VI: Notice of situation of registered office;
Form IX: Consent of director to act;
Form X: List of persons consenting to be directors;
Form XII: Particulars of the directors, manager and managing agents.
STEP 3: FORMALITIES RELATED WITH BANK ACCOUNT
a. Directors shall open a temporary bank account in the name of the proposed Company with any scheduled bank with the condition that the account shall be regularized once the Company is duly registered with Company House;
b. Capital contribution into the bank account.
c. Encashment certificate from the bank which expresses that the sum required for capital contribution has been duly dispatched in the temporary bank account of the proposed organization.
STEP 4: SUBMISSION OF DOCUMENTS TO RJSC
For assistance with step 4: submission of documents to rjsc, ZCA LEGAL is here to support you throughout the process.
Application to RJSC along with the documents executed as listed above.
Post registration compliances for a Public Company limited by shares
(a) Trade License
The Companies have to obtain trade license from the relevant City Corporation. The proposed Company is required to file its application at the nearest City Corporation along with relevant documents and appropriate fees.
(b) Tax Identification Number (“TIN”)
A Company has to obtain E-TIN from the recommended website of National Board of Revenue (NBR).
(c) VAT Registration Certificate
The newly incorporated Company has to collect a VAT registration certificate. In this regard, the application has to be made to the National Board of Revenue (NBR).
(d) Fire Certificate
Fire certificate is provided by the Bangladesh Fire Service and Civil Defense Authority.
(e) Environment Clearance Certificate
An environment clearance certificate from the Department of Environment has to be obtained by a company if it’s involved in an industrial project, by executing the prescribed form.
Special Case (Investment in kind, etc.)
The concept of ‘investment in kind’ is not detailed under Companies Act 1994. However, in practice, significant investment is made by investing in machineries and other equipment in a Company by a shareholder or a proposed shareholder in a Company incorporated in Bangladesh. Although Companies Act 1994does not govern the procedure, the following steps are followed while carrying out such investment in kind:
RJSC The concerned company has to be duly registered with ,
The concerned investors have to fill up the relevant Form(s),
The concerned investors are required to have a vendors’ agreement between them,
The filled up Form(s) and the vendors’ agreement have to be filed with RJSC.
RJSC The will then record the investment and monitor whether the proper procedure has been duly followed.
How much time is required for incorporation?
Once the aforementioned formalities are complied with, RJSC generally provides with the certificate of incorporation (Company registration certificate) within 6-8 working days. It usually takes 2-3 weeks to register a Company from the date of submitting all the documents to RJSC.
Once the name clearance is obtained, the clearance remains valid for 6 months. Generally 3 working days are required to obtain a name clearance. After obtaining the Name Clearance certificate a bank account need to be opened where the initial paid up capital need to be transferred from the shareholders’ account. If there is any foreign investment then the amount for paid up capital need to be remitted through the newly opened bank account following proper procedure.
Fees required for incorporation?
The governmental fees of the Company registration depend on the amount of Authorised Capital. For issuance of Incorporation Certificate governmental fees shall be BDT 1000.
Joint Venture Company Registration/Incorporation Procedure in Bangladesh
In sectors where restrictions on foreign investors’ equity participation exist, foreign investors may not conduct business in the form of Branch office as in those cases, the Joint Venture partners (Local and Foreign Investors) open up a Joint Venture Company and run the business as per the object clauses of Memorandum of Association maintaining the ratio fixed by the government in equity participation in a particular sector.
In Bangladesh 100% foreign investment is allowed unless the sector is fall within the scope of reserved sectors i.e. Arms and ammunition, Forest Plantation, Production of nuclear energy and Security printing. Another point should be noted that as per laws of Bangladesh foreign shareholders cannot hold more than 40% shares if the company intends to provide freight forwarding services. Freight forwarding license can be obtained by incorporating a JV Logistics Company only if the Company has a highest 40% foreign shareholding and 60% local shareholding. One or more foreign investors can set up a Joint Venture Company in Bangladesh with collaborating of one or more Bangladeshi investors.
