How to Incorporate Entity in Bangladesh

There are several structures by which an investor can incorporate entity in Bangladesh. The particular mode of entity incorporation in Bangladesh depends on the need of the clients and the type of business the client is engaged in. BDLC Legal and Associates Bangladesh Legal Legal Consulting Firm is one of the prominent service providers in Bangladesh with regards to incorporation with RJSC(Company House) and also Bangladesh Investment Development Authority. Along with our sister concerns in Bangladesh, we do provide 360-degree end to end professional services.

The types of entities or formation of permanent establishment(PE) in Bangladesh generally takes the following forms:

Private Limited Company

When it comes to entity incorporation in Bangladesh, one of the most preferred option to start a business is to take resort to incorporating a Private Limited Company. Although there are many other options to start a business in Bangladesh, out of which the most common and useful modes are either registering a branch office or incorporating a private limited company, therefore, the procedure of registering a private limited company has been mentioned down below.

Before moving on to the procedure of incorporating a private limited company in Bangladesh, it is worth mentioning that there is another option, which is registering a liaison office in the Bangladesh investment development authority, that is commonly known as BIDA. However, to operate as a liaison office in Bangladesh there are also backdrops such as, the liaison office cannot transact in business, the liaison office can only maintain liaison between its parent company and the possible vendor or clients, but when it comes to making business transaction, only the parent company can transact under the restriction and supervision of the Bangladesh Bank and other relevant authorities as a foreign company. Therefore, it appears that Liaison offices are not a viable option, until or unless simply maintaining a degree of liaison with the vendors in Bangladesh is the intention of the parent company registered outside of Bangladesh.

What is a Private Limited Company?

As per section 2(q) of Companies Act 1994, A Private Company is a Company which by its Articles of Association restricts the right of transfer of the share, limits the number of members to fifty and prohibits invitation to the public to subscribe to the shares or debentures of the Company.

What are the characteristics of a Private Limited Company defined in Companies Act 1994?
The Companies Act 1994 has mentioned the following characteristics of a Private Limited Company:

a. It restricts the rights to transfer the shares [s. 2(q)];

b. The minimum number of members is 2 (two) [s. 5];

c. The maximum number of the members is 50 (fifty) excluding the persons employed in the Company [s. 2(q)];

d. It must have at least two directors [s. 90 (2)];

e. It prohibits any invitation to the public to subscribe for the shares or debentures of the Company [s. 2(q)];

f. It does not have to fulfill the requirement of statutory meeting or statutory report [s.83(12)].

g. Subject to obtaining other licenses mentioned below in the post registration section of this Report, a Private Company can commence business as soon as it is registered with the RJSC.