A Private Company Limited by Shares (commonly known as a Private Limited Company) is the most common and preferred form of business entity in Bangladesh. It is governed by the Companies Act, 1994 and regulated by the Registrar of Joint Stock Companies and Firms (RJSC).
Key Features of a Private Limited Company
- Minimum 2 and maximum 50 shareholders
- Minimum 2 directors
- Shareholders’ liability is limited to the unpaid value of their shares
- Cannot invite the public to subscribe to shares
- Prohibited from freely transferring shares (subject to restrictions in Articles)
Legal Requirements
- At least 2 shareholders (individuals or companies)
- At least 2 directors (must be natural persons)
- Directors must be at least 18 years old and not bankrupt or convicted of a criminal offence involving moral turpitude
2. Registered Office
- Must have a physical address in Bangladesh as the registered office
3. Name Clearance
- Company name must be approved by RJSC through a name clearance process
Incorporation Process
Step 1: Name Clearance
- Apply online via RJSC portal
- Pay BDT 200 as name clearance fee
- Valid for 180 days
Step 2: Drafting Documents
Prepare the following incorporation documents:
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Form IX (Consent of Director)
- Form XII (Particulars of Directors)
- Form X (List of persons consenting to be Directors)
- Form VI (Notice of Registered Office)
Step 3: Payment of Fees
Pay government registration fees and stamp duties based on the authorized capital.
Step 4: Submission to RJSC
- Submit all signed documents and payment receipts online
- Physical submission may be required depending on RJSC’s current policy
Step 5: Issuance of Certificate of Incorporation
Once approved, RJSC will issue:
- Certificate of Incorporation
- Incorporation Form with details of directors and shareholders
- Certified MoA and AoA
Post-Incorporation Compliance
- Tax Identification Number (TIN): Obtain from NBR
- Trade License: From local City Corporation/Municipality
- Bank Account: Open a company bank account in the company’s name
- VAT Registration: Apply for Business Identification Number (BIN) from VAT office
- RJSC Annual Returns: File Form 23B and Annual Returns (Form X, XI, and Schedule X) regularly
Cost of Incorporation
| Particular | Approximate Cost (BDT) |
|---|---|
| Name Clearance | 200 |
| Government Fees (based on capital) | 1,000 – 40,000+ |
| Stamp Duty | 2,000 – 10,000+ |
| Legal/Consulting Fees (if applicable) | Varies |
Fees depend on the amount of authorized capital and number of directors/shareholders.
Tax and Regulatory Requirements
- Corporate Tax: 20% to 27.5% depending on the business type
- Withholding Tax and VAT: Must be deducted and deposited accordingly
- Audit Requirement: Annual financial audit by a licensed Chartered Accountant is mandatory
- Return Filing: Annual filing with RJSC is mandatory
Foreign nationals and entities may own up to 100% of the shares in a private limited company, subject to applicable sectoral guidelines and investment regulations under the Bangladesh Investment Development Authority (BIDA).
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