Business registration procedures in Bangladesh

The public companies have the right to issue securities (i.e. stocks and bonds) and raise financing for their projects. In order to do that, they issue their securities through an initial public offering or IPO where interested traders can purchase them. The first step towards starting a public company starts from name clearance. Current government has an increasing number of web services, and providing company legislation services is one of the many examples. The promoters can apply for a desired name of their company through an online form which then has to be submitted to The register of joint stock companies and firms.

First of all, the promoters have to find available names for their entity, now it is possible through the official RJSC website. After finding an available name, the promoter then has to sign up in the official website of RJSC. After logging inn, the promoter has to get hold of the name clearance form. For choosing an entity name, it has some pre-requisite rules. they are:

cannot be the same name (i.e. matching with another existing company) cannot imitate the name of another international organization cannot avail the name from institutions who are running for a long time, especially business

organizations, societal institutions and sports & entertainment clubs cannot derive the name from an existing Government entity in case of using names of famous personalities, prior permission from their family must be

obtained cannot take a name from a political party sarcastic, curse and other unacceptable names cannot be availed race, sex and community discriminating names are banned

After a proposed name is cleared, the promoter can approach the online registration page by RJSC. This is a page that contains the generation information about the company, such as name of the entity type of entity and many others. In this page, a promoter can chose among private, public, trade organization, foreign company, society and partnership firm. The page requires to input the relevant answers that are already enlisted in The memorandum of association and articles of association..The Memorandum of association is a legal document to define the relationship between the company (and directors) with its shareholders. Common components in a Memorandum of association includes the company name, names of its members, and number of shares held by them and location of their office. The document also represents company's objectives, amount of authorized capital, whether liabilities of a shareholder is limited by shares or guarantee and what types of contracts the company is allowed to get into.

(Paul Merchant, 2005). (Government Of United Kingdom, 2015). The articles of association governs and specifies the rules and regulations that govern a company's operations. Articles of association represent the company's purpose and formulate the processes for appointing directors and how financials are to be handled (Investopedia). All the following information to be submitted in the general information page are previously incorporated in the Memorandum and articles of association.

The General information page includes:

name of the entity ( as per the name from the name clearance form submission) type of the entity (public, private, trade etc) liabilities by share/guarantee address of the entity (the main location of the business) entity email address main business objective business sector (Sector in which the company will operate) business sub-sector Authorized capital (The capital authorized through Government policies) value of each share minimum number of directors maximum number of directors Quorum of AGM/EGM Quorum of Board of directors' meeting Duration for chairmanship Duration for managing directorship

After the general information page, The number of qualification shares are enlisted. This section includes text fields such as number of qualification shares, value of each share, witnessed to the agreement of taking qualification share, name of the witness, his/her address and district. Note that

every step has a "Save" option to prevent promoters from data loss. The next step contains the particulars of body corporate shares as of Memorandum and articles of association. In this part, it is necessary to input the name of the corporate body, the person by whom it is represented, address of the body corporate and numbers of subscribed share. The promoter can add necessary rows for multiple body corporate. The next step, contains the names, his/her position in the company and number of subscribed shares of each of them. These information are previously incorporated in Memorandum and articles of association, Form IX, Form X, and Form XII. This section can be expanded through add/remove rows as per necessity. (Register of Joint stock companies and firms, 2012)

The next step includes adding witnesses to the process, i.e. the names of the witnesses, address, phone and national ID. Note that 2 witnesses are required. The next step incorporates the name, position and address of the person who filed the documents. (Register of Joint stock companies and firms) Next comes the promoter should enlist his/her name, position in the company, Organization(applicable for the lawyers only), address and district. All the information typed into the forms are advised to be saved while the process to prevent from data loss. The section E is the second last page, which is The declaration on Registration of the company signed by the promoter and as of Form I.

Upon fulfilling the above pages, the promoter then needs to upload the necessary forms to the system. A detailed look at the Forms that are needed to form a company is taken below:

Memorandum & Articles of Association, original + 2 copies

As explained previously, The Memorandum of association is a legal document to define the relationship between the company (and directors) with its shareholders. Common components in a Memorandum of association includes the company name, names of its members, and number of shares held by them and location of their office. The document also represents company's objectives, amount of authorized capital, whether liabilities of a shareholder is limited by shares or guarantee and what types of contracts the company is allowed to get into. Articles of association represent the company's purpose and formulate the processes for appointing directors and how financials are to be handled. All the following information to be submitted in the general information page are previously incorporated in the Memorandum and articles of association.

Form I: Declaration on Registration of Company [Section 25].

On Form I, the promoter address his/her and the company's compliance and adherence to the companies act of 1994. The form needs to be filed by an attorney/lawyer who assures that appropriate legal measures, compliance and the appropriate payment is met.

For clarification purposes, a simple format or sample is attached below:

Form VI: Notice of situation of Registered Office and of any change therein [Section 77]

This form is to be filled with blank ink pen and add in block letters. This form, Form VI contains the Company name, the name of the person who presents it, the house/building/flat number of the location, the street in which the office is with district, region, present postal address, present mobile number and present fax number, email address. Note that, in this form, Abbreviations are not acceptable, the asterisk marked texts must be defined, and the mentioned company gives notice in accordance with section 120 of the companies act, 196. (Business.Org)

For simplification, a form is attached below:

Form IX: Consents of Directors to Act [Section 92].

The Form IX, or the consents of Directors to act refers to the agreement of a chosen candidate to act as a director, secretary in the organization. In this form, the director(s) consent to perform the tasks related to the designation of the holder, the form contains names(including former name), date of birth of the director/secretary, place of birth, the date and signature.

Figure: A sample of Form IX, consent of directors to act (section 92)

Form X: List of Persons Consenting to be Directors

This form is pretty intuitive in the sense that The person who are potential Directors consent. this is similar in the nature. The people who will consent to be directors takes place accordingly, pursuant to section 92(2) of the companies act 1994.

Form XII: Particulars of the Directors, Manager and Managing Agents and of any Change therein [Section 115].

This is an elaborate document which specifies the name of the company, the person who files it, and the following things of directors, managers and managing agents:

The present names or names and surnames any former names or surnames nationality nationality of origin (other than the present nationality) usual residential address other business occupation and directorship, if any, none, state so(b) date of appointment of change changes filing date of the form

In order to present a clearer view, a sample form is added below:

Figure: Form XII, particulars of the directors, managers and managing agents and of any therein

Form XIV: Declaration before Commencing Business in case of Company Filing Statement in lieu of Prospectus [Section 150]

In this form, several issues are addressed and declared as compliance to the rules and regulations. The common topics include:

name of the company declaration that governance is complied according to section 150

amount of share capital and minimum subscription fixed my memorandum and articles of association

The amount to be paid by each shareholder according to number of holding shares, a promise to pay the amount

lastly, the designation of the person to file the document and filing date

Figure: the Form XIV, declaration before commencing business in case of the company filing a statement in lieu of prospectus.

Filled in Form XI (if necessary): Agreement to Take Qualification Shares in Proposed Company [Section 92].

In this case, the directors to take and pay for shares is to be signed pursuant to section 92 (iii,iv) of Company act 1994. In this form, the directors, who are willing to purchase qualification shares promises to pay determined price in due time and includes signatures, addresses and description of the directors

willing to buy qualification shares. Qualification shares are simply the shares one has to buy to become a director. It refers to the criteria that a potential director must hold certain interest in the venture.

Form XI (if necessary): Agreement to Take Qualification Shares in Proposed Company [Section 92].

Evidence of Name Clearance

The evidence is drawn from the serial number and letter submission number derived after the name clearance step and from the authority.

Special Adhesive Stamps and Treasury Challan from Bangladesh Bank to Treasury (photocopy) of Collecting the Stamps

The following structure reflects the stamp fees necessary for public companies:

 Stampsi) For affixing on the Memorandum of Association: BDT 500ii) For affixing on the Articles of AssociationFor authorized capital: Stamp fees

Up to 1,000,000 2,000 1,000,000 up to 30,000,000 4,000 30,000,000 10,000

Registration feesFor filing 8 or 9 documents (7 or 8 filled in forms plus 1 memorandum & articles of association, @ BDT 200 per document):

BDT 1600-1800

For authorized share capital: up to 20,000 BDT 360 For every 10,000 or part after first 20,000 up to 50,000 BDT 180 For every 10,000 or part after first 50,000 up to 

1,000,000BDT 45

For every 10,000 or part after first 1,000,000 up to 5,000,000

BDT 24

For every 100,000 or part after first 5,000,000 BDT 45

(business.org, 2013) (Register of Joint stock companies and firms, 2012) (Register of joint stock companies and firms, 2013)

Returns filing for public companies

Public companies are subject to submit some pre determined documents when filing for returns. The steps start with Schedule X, the annual summary of share capital and list of shareholders. According to section 36, schedule x has to be filed within 21 days of annual general meeting.

The next step starts with submitting the balance sheet. The construction of the balance sheet should be according to Bangladesh Financial reporting standards (BFRS) and subject to submission within 3o days of annual general meeting.

Next comes the Profit and loss account, which has to be submitted within 30 days of annual general meeting. Form 23B is a notice by auditor. The auditor(s) make sure that proper treatments and transparency of the historical records. The notice by the author is regulated under section 210(2).

As we recall, the form IX, which is the consent of directors to act has, has to be filed within 30 days of appointment. This follows the seciton 92. The last step includes submitting the form XII which contains the particulars of the directors, managers and managing agents and of any change therein: to be filed within 14 days from the date of appointment or change. The step follows section 115.

(Register of Joint stock companies and firms, 2012)

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business.org. (2013). Business organization. Retrieved October 2015, from www.business.org.bd: http://business.org.bd/assets/company.pdf

Government Of United Kingdom. (2015, October). Retrieved November 2015, from www.gov.uk: https://www.gov.uk/limited-company-formation/memorandum-and-articles-of-association

Investopedia. (n.d.). Retrieved November 2015, from www.investopedia.com: http://www.investopedia.com/terms/a/articles-of-association.asp

Paul Merchant. (n.d.). Retrieved November 2014, from www.smallbusiness.chron.com: http://smallbusiness.chron.com/definition-memorandum-association-17475.html

Paul Merchant. (2005, November). definition-memorandum-association-17475.html. Retrieved november 2014, from www.smallbusiness.chron.com: http://smallbusiness.chron.com/definition-memorandum-association-17475.html

Register of Joint stock companies and firms. (n.d.). Register of Joint stock companies and firms. Retrieved October 2015, from www.roc.gov.bd: http://www.roc.gov.bd/

Register of Joint stock companies and firms. (2012). Register of Joint stock companies and firms. Retrieved October 2015, from www.rjsc.org: http://www.rjsc.org/index.php/company-registration-in-bangladesh

Register of joint stock companies and firms. (2013). www.roc.gov.bd. Retrieved October 2015, from http://www.roc.gov.bd:7781/psp/RJSC_Fees