Non-Profit Organization in Bangladesh: Legal Framework and Registration Process

Non-Profit Organization in Bangladesh: Legal Framework and Registration Process

Non-profit organizations (NPOs) play a vital role in Bangladesh’s development by providing education, healthcare, legal aid, humanitarian relief, and advocacy services. These organizations operate without profit motives and are structured under specific legal frameworks to ensure accountability and compliance. This article outlines the types, registration process, and regulatory requirements of NPOs in Bangladesh.

Legal Forms of Non-Profit Organizations in Bangladesh

In Bangladesh, non-profit entities may be registered under any of the following legal frameworks:

1. Societies Registration Act, 1860

• Suitable for social, cultural, educational, religious, and charitable organizations
• Must consist of at least 7 members
• Registered with the Registrar of Joint Stock Companies and Firms (RJSC)

2. Trust Act, 1882

• Suitable for setting up charitable trusts or foundations
• Registered with the Sub-Registrar’s Office under the Registration Act, 1908
• Can be established by a trust deed executed by the settlor(s)

3. Companies Act, 1994 (Section 28)

• For forming non-profit companies limited by guarantee
• Registered with RJSC
• Cannot distribute profits among members; must reinvest in organization’s objectives

Registration Under Societies Registration Act, 1860

Requirements:

• Minimum 7 members
• Constitution or Memorandum of Association (MOA)
• Executive committee structure
• Proof of address

Documents Needed:

• MOA and Rules & Regulations (in triplicate)
• List of members with addresses and designations
• Minutes of the first meeting
• Application in prescribed form
• Passport-sized photographs of members
• NID/passport copies

Registration Authority:

• Registrar of Joint Stock Companies and Firms (RJSC)

Registration Under the Trust Act, 1882

Key Features:

• Can be set up by a trust deed
• Requires at least one settlor and one trustee
• Defines purpose, management, and operation of the trust

Registration Steps:

• Draft trust deed on non-judicial stamp paper
• Execute deed before the Sub-Registrar
• Pay applicable registration fee

Common Purposes:

• Educational trusts
• Orphanages
• Medical or religious institutions

Registration as Non-Profit Company Under Section 28

Features:

• Registered as a Company Limited by Guarantee
• No share capital or dividend distribution
• Must obtain prior approval from the Ministry of Commerce

Documents Required:

• MOA and Articles of Association (AOA)
• List of proposed directors and guarantors
• NID/passport of promoters
• Application for license under Section 28
• Fees payable to RJSC

Regulatory Authority:

• RJSC and Ministry of Commerce

Registration with NGO Affairs Bureau (for Foreign Funding)

If a non-profit intends to receive foreign donations or grants, it must register with the:

• NGO Affairs Bureau under the Foreign Donations (Voluntary Activities) Regulation Act, 2016

Documents Needed:

• Registration certificate from RJSC or Sub-Registrar
• Constitution of the organization
• Executive committee details
• TIN and bank account
• Project proposal for foreign funding
• Audit report (if already operational)

Tax Benefits for NPOs in Bangladesh

Registered non-profit organizations may enjoy tax exemptions, provided they fulfill conditions under the Income Tax Ordinance, 1984:

• Must apply to the National Board of Revenue (NBR) for tax exemption
• Income must be used solely for charitable purposes
• Must maintain proper books of accounts
• Annual audit and filing of tax returns required

Compliance Obligations

Requirement	Applicable Law / Authority
Registration	RJSC / Sub-Registrar / Ministry of Commerce
Renewal (for society/NGO)	Every 5 years (NGO Affairs Bureau)
Annual Report Submission	NGOAB and RJSC (as applicable)
Tax Filing	Income Tax Ordinance, 1984
Foreign Donation Reporting	NGO Affairs Bureau guidelines
Audit Requirements	Annual independent audit mandatory

Summary Table: Comparison of NPO Structures

Legal Form	Governing Law	Min. Members	Registration Authority	Foreign Funding
Society	Societies Registration Act, 1860	7	RJSC	NGOAB approval
Trust	Trust Act, 1882	1 Settlor	Sub-Registrar Office	NGOAB approval
Non-Profit Company	Companies Act, 1994 (Sec 28)	2 Directors	RJSC + Commerce Ministry	NGOAB approval

Final Notes

While Bangladesh allows the formation and operation of non-profit organizations under several laws, proper legal structure and registration are essential for credibility, funding eligibility, and regulatory compliance. Legal advice is strongly recommended during registration and while applying for NGOAB approval, tax exemption, and foreign remittance permissions.