Registering a company gives your business a separate legal identity, limits the personal liability of its owners and makes it easier to open bank accounts, win contracts and raise investment. In Bangladesh, companies are registered with the Registrar of Joint Stock Companies and Firms (RJSC) under the Companies Act, 1994. This guide walks through the process for a private limited company, the most common structure for small and medium businesses.

Choose the right structure

• Private limited company: at least 2 and at most 50 shareholders, with a minimum of 2 directors. Shares cannot be offered to the public.
• One Person Company (OPC): a company with a single shareholder, introduced by a 2020 amendment to the Companies Act. It has its own capital and nominee requirements.
• Public limited company: at least 7 shareholders and 3 directors, and it may offer shares to the public.
• Partnership or sole proprietorship: simpler to set up, but the owners remain personally liable for business debts.

Step 1: Get name clearance

Create an account on the RJSC website, search for your proposed name and apply for name clearance. The name must not be identical or confusingly similar to an existing company. Once approved, the clearance is valid for a limited period (currently 30 days), so have your other documents ready before you apply.

Step 2: Prepare the documents

• Memorandum of Association (MoA): states the company name, registered office, business objectives and authorised share capital.
• Articles of Association (AoA): the internal rules on shares, directors, meetings and decision-making.
• National ID (or passport for foreign nationals), photograph and TIN of each shareholder and director.
• The registered office address.
• The prescribed RJSC forms, including Form I (declaration of compliance), Form VI (notice of registered office), Form IX (consent of directors), Form X (list of directors) and Form XII (particulars of directors).

Draft the objects clause of the MoA carefully. Banks and licensing authorities will check whether your intended activity is covered by it.

Step 3: Deposit capital if there is foreign shareholding

Where a foreign shareholder is involved, a temporary bank account is opened in the proposed company name, the share money is brought in from abroad and the bank issues an encashment certificate, which must be filed with RJSC. Fully local companies generally do not need this step.

Step 4: File online and pay the fees

Submit the forms, MoA and AoA through the RJSC online portal and pay the registration fee and stamp duty at a designated bank or through the online payment options. The fee depends on the authorised capital, so the higher the authorised capital, the higher the cost. RJSC provides a fee calculator on its website.

Step 5: Receive the certificate of incorporation

If the documents are in order, RJSC issues a digitally signed Certificate of Incorporation along with certified copies of the MoA, AoA and Form XII. For a straightforward local company this often takes a few working days. Companies with foreign shareholders usually take several weeks in total because of the banking step.

What to do after incorporation

1. Trade licence from the relevant city corporation, municipality or union parishad.
2. Company TIN from the National Board of Revenue.
3. VAT registration (BIN) where applicable.
4. Company bank account, opened with a board resolution.
5. Sector licences if your activity needs them, for example an import or export registration certificate, a fire licence, an environmental clearance or a BIDA registration for foreign investment.

Ongoing compliance

• Hold the first Annual General Meeting within 18 months of incorporation, and one in every calendar year after that.
• File annual returns and audited financial statements with RJSC.
• Notify RJSC of changes in directors, registered office or share capital within the prescribed time.
• File the company income tax return every year, even if the company made no profit.
• Renew the trade licence annually.

Late filing attracts penalties, and long-term default can lead to the company being struck off the register.

Common mistakes to avoid

• Copying a template MoA with objectives that do not match the real business.
• Setting the authorised capital far too low and having to increase it soon after.
• Ignoring annual returns because the company is not yet trading.
• Leaving out a shareholders' agreement when there are several founders.

This article is for general information only and is not legal advice. Fees, forms and timelines change, so confirm the current requirements with RJSC or a corporate lawyer. You can find business law practitioners on Ukilpara.com.