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Registration process of private limited company in Bangladesh

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This report discuss the "Registration process of private limited company in Bangladesh." It was made as assignment report of IUB. All the content are taken from web sights or the text book that are mentioned in the document.

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Registration process of private limited company in Bangladesh

  1. 1. INDEPENDENT UNIVERSITY BANGLADESH (IUB) REGISTRATION PROCESS OF PRIVATE LIMITED COMPANY IN BANGLADESH Submitted To:IftekharMahfuz, Lecturer, School of Business. 11/18/2015 Submitted by: Mohammad Faruq 1330708 Sanjay karmokar 1330506 Md. Harunar Rashid 1330685 Md. RakibulHasib 1330442 Md. Al-Maruf 1321455
  2. 2. Page | 1 Table of Contents Introduction:................................................................................................................................ 2 Definition:....................................................................................................................................2 Essential Features of company: .....................................................................................................3 RegisteringPrivate limited company in Bangladesh ........................................................................5 Steps of forming a companyin Bangladesh .................................................................................... 5 Name clearance:....................................................................................................................... 5 Registration.............................................................................................................................. 8 Submission and Payment..........................................................................................................9 Print Submissions.................................................................................................................... 10 Memorandum of Association:.................................................................................................. 10 Articles of Association:............................................................................................................ 11 Applicable fees for Registration: .............................................................................................. 11 Return Filling:......................................................................................................................... 13 Winding Up:........................................................................................................................... 14 Issuance of Certified Copies:.................................................................................................... 16 Struck Off:.............................................................................................................................. 18 Conclusion ................................................................................................................................. 19 Reference:................................................................................................................................. 20
  3. 3. Page | 2 Introduction: 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, Chairmen, Managing Director and Share holders. 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 share of each Director, Chairman, Managing Director &Share holder’s and qualifying share of Directorship written down authorized capital and paid up capital of the 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. Company is a voluntary association of persons formed for the purpose of doing business having a distinct name and limited liability. It is a juristic person having a separate legal entity distinct from the members who constitute it, capable of rights and duties of its own and endowed with the potential of perpetual succession. 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.
  4. 4. Page | 3 Essential Features of company: 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. 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. 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.” 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 enter into contract with the company and can be an employee of the company. 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. 6. Capital: A company must have a capital, otherwise it cannot work. 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. 8. RegisteredOffice: A company must have a registered office. 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. 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. 5. Page | 4 11. Transferability: The shareholder of a company can transfer its share and ordinarily the transferee becomes a member of the company. 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. 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 14. Residence: A company has a residence (for taxation and other purpose). A company does not posses any fundamental rights. 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. 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;
  6. 6. Page | 5 Registering Private limitedcompany inBangladesh 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 Steps of forming a company in Bangladesh Name clearance: RJSC name clearance is the 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 to issue Name Clearance Certificate. 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.
  7. 7. Page | 6 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 Organization’s 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. 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 share holders. All share holder, director, managing director, Chairman signed it for their proposed share.
  8. 8. Page | 7 Article of Association basically written down legal and administrative activities of the company, as like borrowing powers, power of chairman, managing director, director and share holders, general meeting procedure, quorum of meeting, vote of member’s, qualification shares of directors, quorum of board meetings, number of share of directors and share holder’s and all other operating activities which followed by Company Act 1994.
  9. 9. Page | 8 After filling up the form you need to click the submit button then you will get a conformation message like are you successfully registered or not. Registration
  10. 10. Page | 9  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.  Click the Continue button and you will see the Submission and Payment Reference page Submission and Payment  Congratulations! You have successfully completed the online submission of Registration Application.
  11. 11. Page | 10  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. Print Submissions For printing, please follow the guidelines hereinafter:  Click the ‘Print Registration Documents’ option under Registration of home page. As prompted, enter your submission number and you will be given the option for printing Memorandum of Association:
  12. 12. Page | 11 Articles of Association:  Write "clause 1" then Click "Add Clause (1)" button to add clause. To enter similar clause one by one. To delete entered information of a clause, click "delete clause (...)" link.  After complete the "AOA" page press SUBMIT button to back Registration Application page. Applicable fees for Registration: To apply for Name Clearance, Registration, Certified Copies and to submit returns, fees and stamps are to be provided as under:
  13. 13. Page | 12 Fees of Name Clearance  For NC clearance: @ BDT 600.00 for each of the proposed names.  For time extension: @ BDT 100.00 for each time extension application. Stamps and Fees of Registration PRIVATE COMPANY (Companies Act, 1994) Stamps  For affixing on the Memorandum of Association: BDT 500.00 For affixing on the Articles of Association: For Authorized Capital Stamp (BDT) Up to 10,00,000.00 2,000.00 10,00,000.00 up to 3,00,00,000.00 4,000.00 More than 3,00,00,000.00 10,000.00 Registration fee  For filing 6 documents (5 filled in forms plus 1 memorandum & articles of association, @ BDT 200.00 per document): BDT 1,200.00 For the authorized share capital: Authorized Capital (BDT) Fee (BDT) Up to 20,000.00 360.00 Additional for every 10,000.00 or part after first 20,000.00 up to 50,000.00 180.00 Additional for every 10,000.00 or part after first 50,000.00 up to 10,00,000.00 45.00 Additional for every 10,000.00 or part after first 10,00,000.00 up to 50,00,000.00 24.00 Additional for every 1,00,000.00 or part after first 50,00,000.00 45.00
  14. 14. Page | 13 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].
  15. 15. Page | 14 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 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. MembersVoluntary Winding Up: wherein a declaration of solvency to pay debts is made ii. CreditorsVoluntary Winding Up: wherein a declaration of solvency is not made
  16. 16. Page | 15 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 is 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
  17. 17. Page | 16 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. 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
  18. 18. Page | 17 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
  19. 19. Page | 18 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 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 (1st 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 2nd notice stating that if an answer is not received to the 2nd 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 2nd 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.
  20. 20. Page | 19 Conclusion As is documented in this report, failings in institutions, government agencies, legal enforcement, and market behavior have resulted in weak corporate governance in Bangladesh. The report is designed as a diagnostic tool from which a consensus will emerge regarding the way forward for Bangladesh. The authors hope that this report will start a dialogue amongst stakeholders about specific measures that can be taken to improve the transparency and accountability of the corporate sector and strength then institutional support for good corporate governance. At this stage, only very broad recommendations are provided, identifying institutions or sectors that should be studied further. Specific recommendations will be framed in subsequent stages of this project. Corporate Governance is a term that describes the interaction of government regulators, shareholders, and boards of directors, independent observers, auditors, accountants and managers to provide quality Information to shareholders, the market, and society at large. Each stakeholder plays an important part to Creating an environment where transparency and accountability are encouraged, enforced, and rewarded
  21. 21. Page | 20 Reference:  http://www.roc.gov.bd/  http://www.rjsc.org/  http://www.rjsc.org/index.php/rjsc-name-clearance-rjsc-entity-name-search  http://shailallb.blogspot.com/2009/01/registrar-of-joint-stock-companies-and.html  http://en.wikipedia.org/w/index.php?search=steps+of+forming+a+company+in+banglade sh&title=Special%3ASearch&go=Go  http://www.roc.gov.bd:7781/Guidlines/Download/FORM%20IX.htm  http://www.roc.gov.bd:7781/Guidlines/Download/FORM%20X.htm  http://www.roc.gov.bd:7781/Guidlines/Download/FORM%20XII.htm Textbook:  Commercial law and industrial law (business law). By- Arun Kumar Sen and Jitendra Kumar Mitra

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