Company Formation
Company formation refers to the process of establishing a legal business entity. According to the Companies Act 1994, any person (foreign or local) can form or register a company in Bangladesh who is above 18 years old.
The Company Formation or company registration relocation of the existing company of Bangladesh and also note that most of the Bangladeshi companies are registered as private limited companies (commonly known as private limited companies). A private limited company in Bangladesh has a separate legal entity and shareholders are not liable for the company’s debts beyond the amount of share capital they have contributed. According to the Companies Act 1994, any person (foreign or local) can form or register a company in Bangladesh who is above 18 years old.
KEY FACTS ABOUT COMPANY FORMATION
Company Name: Firstly
The name must be approved (cleared) before company formation or incorporation of the company in Bangladesh.
Directors: Secondly
The Minimum two directors are mandatory. Directors can be either local or foreign. Directors must be at least 18 years of age and must not be bankrupt or convicted for any malpractice in the past. The law requires that a director must own qualification shares stated in the Articles of Association. A shareholder which is not a natural person (i.e. a company) can select a nominee director.
Shareholders: Thirdly
A private limited company in Bangladesh can have a minimum of 2 and a maximum of 50 shareholders. A director and shareholder can be the same or a different person. The shareholder can be a person or another legal entity such as another company. 100% local or foreign shareholding is allowed in most sectors. New shares can be issued or existing shares can be transferred to another person any time after the Bangladeshi company has gone through the incorporation process.
Authorized Capital
You must state the authorized capital in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that the company is authorized to issue (allocate) to shareholders. Part of the authorized capital can remain issued. There is no minimum or maximum limit for authorized capital in Bangladesh.
Paid-up Capital
Paid-up capital (also known as share capital) can be increased any time after the incorporation of the company.
Registered Address
In order to register a company in Bangladesh, you must provide a local address as the registered address of the company. The registered address must be a physical address (can be either a residential or commercial address). Memorandum and Articles of Association. The company to be incorporated must prepare a memorandum of association (MOA) and articles of association (AOA).
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