For the purpose of incorporating the proposed company (“Company”), you must first obtain the name clearance and draft the core documents i.e. articles of association (AOA) and memorandum of association (MOA). In this regard, the following information will be required –
- brief detail about the purpose/objective of the business of the Company,
- the official address of the Company; and
- Information about the directors and shareholders of the Company (minimum two directors/shareholders required), such as name, address, NID copy, TIN, Mobile number, and email.
- A Board resolution of the first meeting of the Company, which states that the shareholder-directors agreed to form a Company in the name of XYZ Ltd. (whatever name you pick).
- Signed Form IX of the Company, where the proposed directors provide their consent to become the shareholder-directors of the Company.
- Determination of the authorised capital, paid-up capital and share allocation.
Once the MOA/AOA is drafted, finalized and signed, as well as all the other forms and resulations are duly prepared, you can submit all the documents to the Registrar of Joint Stock Companies (“RJSC”) for incorporation. The registration process (name clearance, drafting of documents, and incorporation) may take up to 7-10 working days (approx).
Special Requirement for Private Company with Foreign Shareholder(s)
Once the documents are ready, you have to open a temporary bank account in the name of the proposed company with any scheduled bank in Bangladesh, with the condition that the account shall be regularised once the company is duly registered with the RJSC.
Please note that most of the Bank require presence of the individual(s) while openning the Bank account. Therefore, it is important to consult the Bank if any or all the shareholders of your prospective company are based abroad.
After the account is created, the capital contribution of the foreign shareholder (i.e., paid-up capital) has to be remitted to the temporary account, and an encashment certificate has to be obtained from the bank that states that the amount required for the capital contribution has been duly remitted and received.
Once this is done, you can submit all the documents to RJSC for incorporation. The registration process (name clearance, drafting of documents, and incorporation) may take up to 12–15 working days (approx.).
One-Stop Solution provided by RJSC
However, the RJSC has now launched a one-stop process by which you can directly submit the application without waiting for the name clearance. In this method, the availability of the name shall be decided once you submit the application.
How to set up authorised and paid-up capital for your Company
One of the most frequently asked questions we get from entrepreneurs is: what should be the ideal authorised and paid-up capital. First of all, it all depends on the business projections and capacity of the parties. However, for young entrepreneurs and start-ups, our suggestion is to keep the authorised capital of the company at BDT 20 lakh and the paid-up capital at BDT 50 thousand to BDT 1 lakh. In the situation of receiving investments larger than what you have already set, the constituting documents of the Company, e.g. the MOA and AOA have to be amended through a regulatory process to increase the authorised capital.