Incorporate A Public Limited Company

Incorporate a Public Limited Company in Bangladesh

What is a Public Limited Company?

According to the Companies Act 1994, a Public Company can be formed by at least seven members, and its membership is open to the public.

How to Incorporate a Public Limited Company in Bangladesh

Outline

The Companies Act 1994 does not provide a detailed step-by-step procedure for setting up a company but addresses the statutory requirements for 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 Public 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 any scheduled bank, with the condition that the account will be regularized once the company is duly registered.
• Deposit the capital contribution into the bank account.
• Obtain an encashment certificate from the bank confirming that the required sum for 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 Public 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

Although the Companies Act 1994 does not detail the concept of ‘investment in kind,’ 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.

How Much Time is Required for Incorporation?

Once the aforementioned formalities are complied with, RJSC generally issues the certificate of incorporation within 6-8 working days. The overall registration process typically 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.