Incorporate A Privet Limited Company

Incorporation Procedure of a Private Limited Company

Outline

The Companies Act 1994 does not provide a step-by-step procedure for setting up a company but addresses the statutory requirements of incorporation. The RJSC (Registrar of Joint Stock Companies) is the appropriate body that provides detailed guidelines on its official website regarding the procedure for setting up a company, from name clearance to incorporation.

Procedure for Incorporation of a Private Limited Company in Bangladesh

STEP 1: Obtain Name Clearance Letter Apply for name clearance to RJSC along with the following information:

• Application Form
• Proposed Name

STEP 2: Documentation

• Draft the Memorandum of Association and Articles of Association along with other required documents.
• Obtain a directors’ resolution to open a new company in Bangladesh.
• Fill out the following forms for registration with RJSC:
  • Form I: Declaration on registration of the company
  • Form VI: Notice of the situation of the 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 to Bank Account

• Directors shall open a temporary bank account in the name of the proposed company with a scheduled bank, with the condition that the account will be regularized once the company is duly registered.
• Capital contribution must be deposited into the bank account.
• Obtain an encashment certificate from the bank confirming that the capital contribution has been deposited.

STEP 4: Submission of Documents to RJSC

• Submit the application to RJSC along with the executed documents listed above.

Post-Registration Compliances for a Private Company Limited by Shares

Trade License

• Obtain a trade license from the relevant City Corporation by filing an application with the necessary documents and fees.

Tax Identification Number (TIN)

• Obtain an E-TIN from the National Board of Revenue (NBR) website.

VAT Registration Certificate

• Collect a VAT registration certificate by applying to NBR.

Fire Certificate

• Acquire a fire certificate from the Bangladesh Fire Service and Civil Defense Authority.

Environment Clearance Certificate

• Obtain an environment clearance certificate from the Department of Environment if involved in an industrial project.

Special Case: Investment in Kind

While the concept of ‘investment in kind’ is not detailed under the Companies Act 1994, significant investments may be made in machinery and equipment by shareholders. The following steps are generally followed:

• Ensure the company is registered with RJSC.
• Fill out the relevant forms.
• Have a vendor agreement in place.
• Submit the filled forms and vendor agreement to RJSC.
• RJSC will record the investment and monitor the procedure.

Time Required for Incorporation

After complying with the formalities, RJSC typically issues the certificate of incorporation within 6-8 working days. The overall registration process usually takes about 2-3 weeks from the date of document submission to RJSC.

Once name clearance is obtained, it remains valid for 6 months, and generally, it takes 3 working days to obtain it. A bank account must be opened where the initial paid-up capital needs to be transferred from shareholders’ accounts. For foreign investment, the amount for paid-up capital should be remitted through the new bank account following proper procedures.