Private Limited Company Registration in Bangladesh: A Practical Guide for Entrepreneurs

```text Many entrepreneurs consider forming a private limited company when starting or expanding a business. However, choosing a name and submitting an application are only part of the preparation.

Before applying, decide who will own the shares, who will manage the company, what activities it will undertake and how important decisions will be made.

This guide covers general preparation for a private company limited by shares. One-person companies, public companies and businesses in regulated sectors may be subject to different requirements.

1. What Is a Private Limited Company?

Once incorporated, a company becomes a legal entity separate from its shareholders.

In a company limited by shares, a shareholder's liability is generally limited to the unpaid amount on their shares. Personal guarantees, fraud or breaches of law can create separate liabilities.

In Bangladesh, company incorporation is handled by the Registrar of Joint Stock Companies and Firms, commonly known as RJSC.

2. What Should You Decide Before Applying?

The founders should agree on:

• Proposed company name and alternative names
• Main business activities
• Registered office address
• Identities of shareholders and directors
• Number of shares each shareholder will hold
• Authorized and paid-up capital
• Management and signing responsibilities
• Plans for future investment

Record important decisions in writing. Relying only on verbal agreements can create uncertainty later.

3. How Are Shareholders and Directors Different?

A shareholder owns shares in the company. A director has responsibilities for its management and oversight.

The same person may be both a shareholder and a director, but ownership and management positions are separate matters.

Other roles may include:

• A chairman with responsibilities relating to leadership of the board
• A managing director with management powers assigned through the appropriate arrangements
• A CEO responsible for day-to-day executive activities
• An authorized signatory empowered to sign specified documents or conduct particular transactions

The authority attached to these roles depends on the company's articles, appointments and applicable decisions.

A job title does not automatically provide shares or unrestricted signing authority. Before incorporation, confirm the minimum membership and director requirements applicable to the chosen company structure.

4. What Are Authorized and Paid-Up Capital?

Authorized capital is the maximum share capital permitted under the company's constitutional documents.

Paid-up capital is the amount paid on the shares that have been issued.

Consider this simple example:

• Authorized capital: BDT 1,000,000
• Face value per share: BDT 100
• Total authorized shares: 10,000
• Initially issued and fully paid shares: 2,000
• Paid-up capital: BDT 200,000

If a shareholder holds 1,200 of those 2,000 issued shares, their ownership is 60 percent. Authorized shares that have not been issued are not included when calculating current ownership.

This example illustrates the concept only. Choose a capital structure based on your business plan, applicable requirements and fees.

5. What Information and Documents Should You Prepare?

For shareholders and directors, gather the following as applicable:

• Full name and nationality
• National Identity Card or passport
• Date of birth and parents' names
• Present and permanent addresses
• Occupation, mobile number and email address
• Signature specimen
• Photograph and e-TIN where required
• Number of shares and ownership calculation
• Proposed position and responsibilities

For the company, prepare:

• Name application or clearance information
• Registered office details
• Memorandum of Association
• Articles of Association
• Applicable consent letters, declarations and registration forms

This is a general preparation checklist. Foreign or corporate shareholders may require additional documentation and capital-related procedures.

Confirm the final requirements through the current application system before submitting.

6. Why Do the Memorandum and Articles Matter?

The Memorandum of Association sets out fundamental matters such as the company's name, objects and capital.

The Articles of Association contain rules for internal management, share transfers, meetings, voting and directors' powers.

Copying another company's documents without review can leave important provisions unsuitable for your business.

Pay particular attention to:

• Permitted business activities
• Share transfer arrangements
• Appointment and authority of directors
• Voting and decision-making procedures
• Rules relevant to new shares and investment

Any separate founders' or shareholders' agreement should also be consistent with the company's documents and applicable law.

7. What Are the General Registration Steps?

Following the current RJSC or applicable integrated application process, the steps generally include:

• Check the proposed name and applicable clearance requirements
• Finalize the company structure and share allocation
• Prepare the Memorandum, Articles and required forms
• Submit the necessary information and documents
• Pay the prescribed government fees
• Respond to requests for corrections or explanations
• Collect the Certificate of Incorporation and related documents after approval

Name approval does not replace company incorporation. Company name registration also does not automatically provide trademark protection.

8. How Much Does Registration Cost and How Long Does It Take?

Government charges depend on the company type, authorized capital, applicable stamp duties and filing requirements.

When preparing your budget, separate:

• Government registration and related charges
• Professional document preparation fees
• Trade licence and other applicable approval costs
• Ongoing accounting and compliance expenses

Errors, name-related issues or additional verification can affect processing time.

Check the current official fees and obtain a written cost breakdown before proceeding.

9. What Should You Do After Incorporation?

Receiving a Certificate of Incorporation does not complete every requirement for operating a business.

Depending on your activities, further work may include:

• Obtaining the applicable trade licence
• Arranging company tax identification and tax compliance
• Opening a company bank account
• Obtaining VAT/BIN registration or enlistment where required
• Securing sector-specific licences or approvals
• Maintaining share and management registers
• Keeping accounts and arranging applicable audits and returns
• Documenting meetings, appointments and important decisions

Not every business needs the same approvals. Prepare a checklist based on the company's actual activities.

How Can Sure Deed Help?

Sure Deed can connect you with verified professionals for company registration preparation, corporate documentation and related assistance.

Before work begins, confirm what the service includes, the government charges and which post-incorporation tasks are separate.

This article provides general information. Consult a qualified corporate lawyer and accounting professional about share allocation, foreign investment or a specialized business structure. ```