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PROCEDURE OF SETTING UP A BUSINESS

PROCEDURE OF SETTING UP A BUSINESS

5.1 Type of Organization
Implementing a wholly owned or joint venture industrial project in Bangladesh
is a fairly simple process. Before going through the process of set up a business
firstly elaborate the type of organization:
Sl.
NO
Types of Organization Acts Authority Remar
ks

1 Company Govt.
Company
PPE
Company
Holding
Company
Subsidiar
y
Company
The Company Act, 1994

Register of
Joint Stock
Companies
and Firms
(RJSCB) &
Bangladesh
Securities &
Exchange
Commissio
n (BSEEC)

Charted Company
Statutory Company
Registered
Company

Unlimited Company
Limited
Company

Limited
By shares
Private
limited
Public
Limite
d
Limited by
Guaranty

2 Trade Organizations The Trade Organizations
Ordinance, 1961 &
Companies Act, !994

RJSCB and
Ministry of
Commerce

3 Society The Societies
Registration
Act,1860 and Guideline
of Social Welfare Forum

RJSCB and
Somaj Seba
Odhidoptor

4 Trust The trust act,1882 and

Societies
Registration
Act,1860

RJSCB &
Registry
office
5 Partnership Firm Partnership Act 1932 RJSCB &
Registry
office
6 Foundations The companies Act,1994
& The societies
registration act,1860

RJSCB &
Registry
Office
7 Club The societies registration
Act,1860 & The trade
Organizations
Ordinance 1961

RJSCB &
Ministry of
Commerce
& NSI &
SBI
8 Corporation The companies Act,1994
& Special Act of
parliament

RJSCB &
Parliament

9 Branch Office The companies Act,1994
& BIDA Guideline

RJSCB &
BIDA
10 Liaison Office The companies Act,1994
& BIDA Guideline

RJSCB &
BIDA
11 NGO NGO Bureau Guideline Somaj Seba
Odhidoptor

12 PPE The companies Act,1994
& Special Act of
parliament

RJSCB &
Parliament
13 Proprietorship Start with Trade License Different
License
Authority
As set up a company fairly difficult and also most of the business organization
are incorporating as company that is why the entire process of a company is
presented in the following section.
5.2 Introduction for setup a company:

We need to take registration from the Register of Joint Stock Companies and
Firms (RJSC) when we form a company. We think Bangladesh is a suitable
place to form a new business and to get more profit. We generate an idea and
form a business then we have to register our business from RJSC. RJSC is the
only authority to approve registration certificate of incorporation certificate of a
company in the country.
After collecting name clearance certificate to prepare Company’s
Memorandum of Association and Articles of Association by following
Company Act 1994. Memorandum of Association describes all kind of
business activities and services where company can perform and mentioning
number of shares of every Director, Chairman, Managing Director and
Shareholders. Articles of Association expresses all kinks of internal activity as
like material work, office stuff’s duty, official manner and so on. Also
mentioning here number of occupying shares of each Director, Chairman,
Managing Director & Shareholder’s and qualifying share of Directorship
written down authorized capital and paid up capital of the Company.
5.3 Company Definition:
A company is an association or collection of individuals, whether natural
persons, legal persons, or a mixture of both. Company members share a
common purpose and unite in order to focus their various talents and organize
their collectively available skills or resources to achieve specific, declared
goals.
The Companies Act, 1956, states that 'company' includes company formed and
registered under the Act or an existing company i.e. a company formed or
registered under any of the previous company laws. However, company is not a
citizen so as to claim fundamental rights granted to citizens.
5.4 Essential Features of company:
5.4.1 Registration:
A company comes into existence only after registration under the Companies
Act. But a Statutory Corporation is formed and commence business as notified
or stated in the Act and as passed in Legislature. In case of partnership,
registration is not compulsory.
5.4.2 Voluntary Association:
A company is an association of many persons on a voluntary basis. Therefore, a
company is formed by the choice and consent of the members.
5.4.3 Legal Personality:
A company is regarded by law as a single person. It has a legal personality.
This rule applies even in the case of “One-man Company.”

5.4.4 Contractual Capacity:
A shareholder of a company, in its individual capacity, cannot bind the
company in any way. The shareholder of a company can enters into contract
with the company and can be an employee of the company.
5.4.5 Management:
A company is managed by the Board of Directors, whole time Directors,
Managing Directors or Manager. These persons are selected in the manner
provided by the Act and the Articles of Association of the company. A
shareholder, as such, cannot participate in the management.
5.4.6 Capital: A company must have a capital, otherwise it cannot work.
5.4.7 Permanent Existence:
The Company has perpetual succession. The death or insolvency of a
shareholder does not affect its existence. A company comes into end only when
it is liquidated according to provision of the Companies Act.
5.4.8 Registered Office: A company must have a registered office.
5.4.9 Common Seal:
A company must have a Common Seal. The company being an artificial person
cannot sign its name on a contract. The common seal is used as a substitute for
its signature. The common seal bears the name and place of the company, and
date of its incorporation engraved on it.
5.4.10 Limited Liability:
The liabilities of shareholder of a company are usually limited. The creditors of
a company are not creditors of individual shareholders and a decree obtained
against a company cannot be executed against any shareholders. It can only be
executed against the assets of the company.
5.4.11 Transferability:
The shareholder of a company can transfers its share and ordinarily the
transferee becomes a member of the company.
5.4.12 Statutory Obligations:
A company is required to comply with various statutory obligations regarding
management, e.g., filing balance sheets, maintaining proper account books and
registers etc.
5.4.13 Not a Citizen:
A company is an artificial person, not a natural person. Therefore, a company is
not a citizen, although it may have a Domicile

5.4.14 Residence:
A company has a residence (for taxation and other purpose). A company does
not possess any fundamental rights.
5.4.15 Social Objective:
The present view as regard the legal nature of Company Law is that the
Company is a social institution having duties and responsibilities toward the
community, its workers, the national economy and progress.
5.4.16 Centrally Administrated:
The administration of company Law is entrusted to the Central Government.
As a company’s rules and regulation company has two types like,
1. Public Limited Company
2. Private Limited Company.
We want to form a Private Limited Company. Under the Section 3(1) (iii)
defines a private company as one which: –
 has a minimum paid-up share capital of Rs.1 Lakh or such higher capital as
may be prescribed; and
 by its Articles Association
 limits the number of its members to 50 which will not include: –
A. members who are employees of the company; and
B. members who are ex-employees of the company and were members while
in such employment and who have continued to be members after ceasing
to be employees;
5.5 Registering Private limited company in Bangladesh:
To register a company manually, one has to go to RJSC office and fill the
application form. One can also register through website of the office of the
Registrar of Joint Stock Companies and Firms (RJSC). The web address is
www.roc.gov.bd
5.6 Steps of forming a company in Bangladesh

Name Clearance

Registration

Return Filling

Winding Up

Issuance of
Certified Copies
Struck off

5.7 Name clearance:
RJSC name clearance is the very first stapes for a company formation or
registration to start business in Bangladesh. RJSC (The Registrar of Joint stock
Companies and Firms) is the only legal authority and regulatory body to issue
Name Clearance Certificate.
5.8 Name Clearance Terms and Condition:
1. The same name is not applicable for Company / formation in Bangladesh,
(Which is certified by RJSC). Its hearing sound, written style and sight will
not be same all the way.
2. Name could not be similar with international company, organization, social
& Cultural organization.
3. Name cannot be permissible any existing company, business body, Social,
Cultural, Entertainment & Sporting organization’s name.
4. Company’s name will not be similar Govt. Organization or Company.
5. Nationally fame person’s name or famous family’s name need to permission
from particular person and take permission to Government.
6. If you interested to take freedom fighter related name for your company
must be essential approval of Freedom Fighter Ministry of Bangladesh.
7. Company’s name could not be similar of Govt. development program or
development organization.
8. No name will applicable of political party’s slogan, political party’s name
and program which are existing now.
9. Slang word, Rebuke or……possible for company formation in Bangladesh.
10. Cannot select any name which is broken Social, Religious and national
harmony.

11. Earlier established (at least 10 years old) Social organization’s real name, to
attend personally with organizing Committee resolution for registration of
social organization’s real name.
12. Social, cultural & sporting Organizations can be limited company by taking
Ministry permission otherwise not possible to do.
13. Violating any name clearance terms & conditions R, RJSC can change
providing name and if name is unchanged a certain time, Registration
number will be acquainted of the company.
14. Only name clearance is not final settlement of Company
Registration/Formation first stapes.
At first you select a name of your company than submit RJSC and pay 600 (Six
Hundred) taka to schedule authorized bank of name clearance cost. If you get
name clearance from RJSC of submitting company’s name, and make
Memorandum of Association & Article of Association.
5.9 Registration
5.9.1 Memorandum of Association:
Memorandum of Association describes all kinds of business & activities which
will be operate by the company and mentioned of shares distribution of every
Director and shareholders. All share holder, director, managing director,
Chairman signed it for their proposed share.
5.9.2 Articles of Association:
Article of Association basically written down legal and administrative activities
of the company, as like borrowing powers, power of chairman, managing
director, director and shareholders, general meeting procedure, quorum of
meeting, vote of member’s, qualification shares of directors, quorum of board
meetings, number of share of directors and shareholders and all other operating
activities which followed by Company Act 1994.
5.9.3 Submission and Payment
After Preparation Memorandum of Association & Article of Association and all
relevant documents and getting signature from prospected director and
shareholder and submitted to www.roc.gov.bd for formation and finally
Click the print icon(s) under the Print Preview to preview the documents
submitted online. Make sure data is correct, to submit them and pay the
application fee at BRAC Bank or EBL Or One bank.
Click the Continue button and you will see the Submission and Payment
Reference page

 Congratulations! You have successfully completed the online submission of
Registration Application.
 Please retain this submission reference for future reference.
 You can Edit your submission (if you so decide) prior to submission
documents.
 Click Back to Home to go the home page.
5.10 Return Filling:
a. Registered entities are to file to RJSC documents pertinent to management /operation of
the respective entity in prescribed Forms and Schedules (called Returns Filing).
b. There are two (2) types of Returns Filing, viz., a) Annual Returns Filing and b) Returns
Filing for any change in an entity
c. Entities submit returns for filing at RJSC.
d. Entities pay filing fee and late filing fee (if applicable) to RJSC counter
e. RJSC scrutinizes returns.
f. In case of any incomplete/incorrect submission, RJSC notifies the entity for remedial
measures.
g. RJSC archives approved returns.
Returns to be Submitted
PRIVATE COMPANY (Companies Act, 1994)
Private companies are to submit the following returns for filing.
a. Annual Returns
i. Schedule X – Annual summary of share capital and list of shareholders,

Directors: to be filed within 21 days of AGM [Section 36].
ii. Balance Sheet: to be filed within 30 days of AGM
iii. Profit & Loss Account: to be filed within 30 days of AGM
iv. Form 23B Notice by Auditor: to be filed within 30 days of receiving

appointment information from the company
[Section 210 (2)].
b. Returns for Change
i. Filled in Form III – Notice of consolidation, division, subdivision or
conversion into stock of shares: to be filed within 15 days of consolidation
and division etc. [Section 53 & 54].

ii. Filled in Form IV – Notice of increase share capital: to be filed within 15

days of increase of share capital/member [Section 56].

iii. Filled in Form VI – Notice of situation of Registered Office and of any
change therein: to be filed within 28 days of establishment or change
[Section 77].

iv. Filled in Form VIII – Special Resolution/ Extraordinary Resolution
including name change, conversion into public company, alteration of the
memorandum of association, alteration of articles of association etc : to be
filed within 15 days of the meeting [Section 88 (1)].

v. Filled in Form IX – Consent of Director to act: to be filed within 30 days of

appointment [Section 92].

vi. Filled in Form XII – Particulars of the Directors, Manager and Managing
Agents and of any change therein: to be filed within 14 days from the date
of appointment or change [Section 115].

vii. Filled in Form XV – Return of allotment: to be filed within 60 days of

allotment [Section 151].

viii. Filled in Form XVIII – Particulars of mortgages or charges: to be filed
within 21 days of creation of the mortgage or charge [Section 159 & 391].
ix. Filled in Form XIX – Particulars of Modification of Mortgage or Charge: to
be filed within 21 days of the date modification [Section 167(3) & 319].
x. Filled in Form XXVIII – Memorandum of satisfaction of mortgage charge:
to be filed within 21 days of the date satisfaction [Section 12 & 391].

xi. Filled in Form 117 – Instrument of Transfer of Shares.
xii. Digital copy of original Memorandum & Articles of Association
5.11 Winding Up:
1. Mode of Winding Up
The Winding up of a company may be either
i. By the court; or
ii. Voluntary
a. Sub-Divisions of Voluntary Winding Up
i. Members Voluntary Winding Up: wherein a declaration of solvency to pay debts

is made

ii. Creditors Voluntary Winding Up: wherein a declaration of solvency is not made
iii. Subject to supervision of court: wherein a company has resolved to wind up
voluntarily and the court makes an order on consideration of a petition by the
member (s) or the creditor (s) that the Voluntary Winding up shall continue but
subject to supervision of the court

2. Winding Up by the Court
i. The Company or any creditor or creditors or the Registrar submits petition to the

court for Winding up of the company by the court.

ii. Winding up of a company by the court is deemed to commence at the time of

presentation of the petition for the Winding Up.

iii. The petitioner/the company files with the Registrar a copy of the Court order within

thirty (30) days of the court order.

iv. The Registrar notifies in the official gazette that such a court order has been made.
v. The court may, at any time after an order for Winding up, in consideration of an
application of any creditor or contributor, make an order staying the Winding up
proceedings either altogether or for limited time.

vi. The court may appoint other than the official receiver a person or persons as official
liquidator or liquidators for the purpose of conducting the proceedings of winding
up.
vii. The official liquidator files with the Registrar audited accounts.
viii. When the affairs of the company are completely wound up the official liquidator
files with the Registrar court order of dissolution within fifteen (15) days of such an
order.

3. Voluntary Winding Up
i. A company may adopt resolution, special resolution or extraordinary resolution for

Voluntary Winding up.

ii. A Voluntary Winding up is deemed to commence at the time of passing of the

resolution.

iii. The company within ten (10) days of resolution notifies in the official gazette and in

newspaper that such a resolution has been taken.

iv. Members Voluntary Winding up: In this case, prior to passing of the resolution of
Voluntary Winding up, the directors at a meeting make a declaration of solvency that
the company is capable to pay its debts within a period not exceeding three (3) years.

The declaration is filed with the Registrar.

v. Creditors Voluntary Winding up: In this case, a declaration to pay debts is not made.
vi. The company shall appoint one or more liquidators.
vii. As soon as the affairs of the company are fully wound up and final meeting held, the
liquidator within one (1) week of the meeting files with the Registrar final accounts
and returns of the final meeting.

viii. The company shall be deemed to be dissolved on expiration of three (3) months of

registration of returns of the final meeting.

ix. The dissolution period may however be extended by the court on consideration of

any petition.

x. Winding up subject to supervision of court: At any stage of the Voluntary Winding
up process, the court may make an order, on consideration of a petition by the
member (s) or the creditor (s), that the Voluntary Winding up shall continue but
subject to supervision of the court.
5.12 Issuance of Certified Copies:
a. RJSC is the sole authority that keeps records of all registered entities (companies, trade
organizations, societies and partnership firms).
b. Anyone can apply for certified copy of any of such records of an entity
c. However, the profit & loss account of a company is not open to all. Only authorized
personnel of the respective company can apply for it.
d. On receipt of an application and requisite fee, RJSC issues certified copy of the records
applied for.
Documents Constituting an Issuance of Certified Copies Application
i.  One applies for certified copy of record (s) through website

Documents for which certified copies are issued
PRIVATE COMPANY (Companies Act, 1994)
a. Identified by unique nature
i. Articles of Association or part thereof
ii. Memorandum of Association or part thereof
iii. Certificate of incorporation
iv. Declaration on registration of company
v.  List of persons consenting to be directors (1st Directors)
b. Identified by the applicable year
i. Annual summary of share capital and list of shareholders, Directors

ii. Balance Sheet

iii. Profit & Loss Account (only to the authorized person of the respective

company)
iv. Notice by Auditor
c. Identified by the effective date
i. Notice of consolidation, division, subdivision or conversion into stock

of shares

ii. Notice of increase of share capital
iii. Notice of situation of registered office and of any change therein
iv. Special Resolution/Extraordinary Resolution
v. Consent of director to act
vi. Particulars of the Directors, Manager and Managing Agents and of

any change therein
vii. Return of allotment
viii. Particulars of mortgage or charges

ix. Particulars of modification of mortgage or charge
x. Memorandum of satisfaction of mortgage charge
xi. Instrument of Transfer of Share
xii. Alteration of Memorandum of Association
xiii. Alteration of Articles of Association
xiv. Name change
xv. Conversion of private company into public company
xvi. Certificate of Registration of mortgage or charge
xvii. Certificate of Registration of modification of mortgage or charge
xviii. Certificate of Registration of satisfaction of mortgage or charge
xix. Struck off certificate
xx. Wound up certificate
5.13 Struck Off:

i. Where the Registrar has reasonable cause (like annual returns are not submitted for a long
period etc.) to believe that a company is not carrying on business or in operation, sends to
the company a notice (1 st notice) inquiring whether the company is carrying on business or in
operation.
ii. If the Registrar does not within thirty (30) days of sending the notice receive any answer
thereto, shall within fourteen (14) days, after the expiration of the said thirty (30) days send
to the company a 2 nd notice stating that if an answer is not received to the 2 nd notice within
thirty (30) days from the date thereof, a notice will be published in the official Gazette with a
view to striking the name of the company off the register.
iii. If the Registrar either receives an answer from the company to the effect that it is not
carrying on business or in operation, or does not within thirty (30) days after sending the 2 nd
notice receive any answer, he may publish in the Official Gazette, and send to the company a
notice that, at the expiration of ninety (90) days from the date of that notice, the name of the
company mentioned therein will, unless cause is shown to the contrary, be struck off the
register and the company will be dissolved, and
iv. In such a case the Registrar may send a copy of the notice to the company while sending it
to the concerned authority for its publication in official Gazette.

5.14 Post-registration tasks for different nature of business (Business
Sector Wise):
Depending on the type of your newly registered joint venture, there are some
additional licenses and procedures you need to follow:

5.14.1 Common Licenses & Permission:
 Collect Trade License
 Obtain Taxpayer’s Identification Number (TIN) Certificate
 Regularize Bank Account for the newly registered Joint Venture Company
 Obtain VAT Certificate or BIN Registration (Business Identification
Number

5.14.2 Commercial Purpose Licenses & Permission:
 Import Registration Certificate (In case of Import Business)
 Export Registration Certificate (In case of Export Business)
 Trade Association (TO) Membership
5.14.3 Manufacturing Purpose Licenses & Permission:
 Bangladesh Investment Development Authority (BIDA)
 Land or Floor Lease from Bangladesh Hi-Tec Park Authority
 Factory Licenses
 Fire Licenses
 Environment Licenses
 BTMC
 Drug Licenses
 Bangladesh Hi- Tech Park Authority
 Industrial Import Registration Certificate
 Industrial Export Registration Certificate

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