Opening a company in Bangladesh

[Reyed Mia (Apprentice, DIU)]

Opening a company in Bangladesh

If you are an entrepreneur and hoping to start your own business, you need to register your firm under the Companies Act, 1994. Here is a general guideline for new entrepreneurs who want to get their company registered in Bangladesh.

The regulatory authority

The Registrar of Joint Stock Companies and Firms (RJSC) is the regulatory authority which facilitates formation of companies and firms. The body is also responsible for keeping track of all ownership related issues as prescribed by the laws in Bangladesh. The Registrar is the head of the office of the Registrar of Joint Stock Companies and Firms, Bangladesh.

Types of companies

There are many types of business entities. So, before you start the process of registering your firm, you need to make sure what kind of a company you are going to open. RJSC deals with the following types of entities:

Private companies
Public companies
Foreign companies
Trade organizations
Societies, and
Partnership firms

The laws involved

RJSC accords registration and ensures lawful administration of the entities under the provisions of applicable act as under:
l Companies and trade organisations: Companies Act, 1994 (Amendment of Companies Act, 1913)
l Societies: Societies Registration Act, 1860
l Partnership Firms: Partnership Act, 1932

Name Clearance

This is a pre-requisite for registration of a new company (other than Foreign Company) or a society or a trade organisation.
The search for the availability of a company name was computerised in 2003. After checking that the proposed company name is available for registration, the entrepreneur has to apply for name clearance through RJSC website.
RJSC provides name clearance for one of the proposed names upon satisfaction that it does not closely match or resembles with any of the names that have already been taken. The status of the application can be checked online and is usually accepted or rejected within one working day. If accepted, the company name is reserved for six months. A print out of the name clearance certificate must be submitted to the RJSC, along with the other required documents for incorporation.

Payment of stamp fees

One has to pay adhesive stamp fees at a designated bank. Payment can be made to the designated bank accounts of the Treasury. Previously all the fees were supposed to be deposited only in selected branches of Sonali Bank. RJSC has now allowed one of the leading private sector banks with extensive national coverage ie BRAC Bank to collect fees.
For an authorised share capital of up to Tk1,000,000, the total stamp duty fees are Tk2,500. These include Tk2,000 for affixing stamps on the Articles of Association, and Tk500 for stamps on the Memorandum of Association.

Submission of necessary documents

To register a company, the following documents must be submitted to the registrar:

Name clearance certificate
Memorandum and Articles of Association

Form I (Declaration on the registration of the company)

Form VI (Notice of the registered office)

Form IX (Consent to act as directors)

Form X (The list of persons consenting to act as directors)

Form XII (Particulars of the directors, managers, and managing agents)

Proof of payment (ie receipt from the designated bank) for Treasury Stamps

The registration fees payable at a designated banks

For filing six documents (five filled in forms and the Memorandum and Articles of Association, the fee is Tk200 per document): Tk1,200

For an authorised share capital of up to Tk20,000, the fee is Tk360.

An additional fee of Tk180 is applicable for every Tk10,000 or part from the first Tk20,000 up until Tk50,000

An additional fee of Tk45 is applicable for every Tk10,000 or part from the first Tk50,000 up until Tk1,000,000

Obtain a tax identification number (TIN)

In order to start business operations, every company must register for taxes at the appropriate taxation authority (Deputy Commission of Taxes of Company Circle, Zonal Taxation Department) under the National Board of Revenue (NBR) and obtain a tax identification number.

Register for VAT

For VAT purposes, companies register with the Customs, Excise, and VAT Commission under the National Board of Revenue. The company's VAT is regulated by the Customs, VAT and Excise Department of the region in which it
operates.

Obtain a trade license
Companies have to obtain a trade licence from the city corporation. Recently, Dhaka City Corporation has been divided into two zones: the North Zone and the South Zone. The proposed company will have to file its application at the nearest city corporation office.

http://archive.dhakatribune.com/law-amp-rights/2014/jan/22/opening-company-bangladesh