How To Register A Private Limited Company In Bangladesh

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Entity Setup November 30, 2020 0Comments
How To Register A Private Limited Company In Bangladesh

A foreign investor is eligible to register a 100% foreign owned Private Limited Company (PLC) in Bangladesh which is commonly known as FDI company. It is the preferred business arrangement for individual entrepreneurs who want to establish a local company in Bangladesh.

Characteristics of a Private Limited Company in Bangladesh

  • It can have minimum 2 and maximum 50 shareholders (owners).
  • It must have minimum 2 directors.
  • Any individual, who is at least 18 years old, is eligible for shareholder.
  • An initial paid-up capital of at least BDT 1. Additional capital can be injected any time after incorporation.
  • It has legal identity entitlements of a natural person.
  • Registered office address must be a physical address.
  • It can own property in its name.
  • It can sue or be sued in its own right. Thus, shareholders are not involved in the legal proceedings.
  • It does not depend on any individual member or shareholders for its existence.
  • Foreigners can have 100% ownership of company shares.
  • Share transfer and transmission is allowed.
  • The name of the company should end with Ltd., Private Limited or Limited.
  • It must appoint an auditor within 30 days from the date of its incorporation.

Steps and Procedure to Register a Private Limited Company in Bangladesh

  • It can have minimum 2 and maximum 50 shareholders (owners).
  • It must have minimum 2 directors.
  • Any individual, who is at least 18 years old, is eligible for shareholder.
  • An initial paid-up capital of at least BDT 1. Additional capital can be injected any time after incorporation.
  • It has legal identity entitlements of a natural person.
  • Registered office address must be a physical address.
  • It can own property in its name.
  • It can sue or be sued in its own right. Thus, shareholders are not involved in the legal proceedings.
  • It does not depend on any individual member or shareholders for its existence.
  • Foreigners can have 100% ownership of company shares.
  • Share transfer and transmission is allowed.
  • The name of the company should end with Ltd., Private Limited or Limited.
  • It must appoint an auditor within 30 days from the date of its incorporation.

 

Pros and Cons of a Private Limited Company in Bangladesh

ProsCons
  • No restriction in business activity, like any other local company a FDI local company can do any business.
  • Shareholders are not liable for the company's debts beyond the amount of capital they have put into the company.
  • It is easy to transfer ownership through the selling of shares or issuing of new shares to new investors.
  • It has perpetual succession, which means there is no needto wind up the company in the event of deaths, or changes in shareholders or directors.
  • It is easier to obtain funding from investors or loans from financial institutions.
  • It has higher credibility and status in the minds of customers and partners.
  • There are tighter rules and regulations compared to Liaison office or Liaison office.
  • Equity investment is not allowed to remit back to source until dissolution of the company.
  • Dissolution process is long procedural, bit costly and time consuming.

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