One Person Company (OPC) Formation in Bangladesh
On 26th November 2020, The Government of Bangladesh published the amended gazette of The Companies Act, 1994, establishing the rules and regulations of One Person Company (OPC). Later, on 23rd May 2021, The Registrar of Joint Stock Companies and Firms (RJSC) started providing OPC registration.
Due to the lack of a provision for OPC formation, many foreign companies have struggled to establish profitable businesses in Bangladesh. The government has enacted a legal framework for forming One Person Company (OPC) to boost business and investment nationwide. Since a single natural person controls several entities, this style of business incorporation is to attract both local and foreign investors. This change may boost Bangladesh's ease of doing business by enriching its trade and business environment.
One-Person Company (OPC): What Is It?
Bangladeshi OPCs are quite new. According to Section 2 (Kha) of sub-section 1 of section 2 of the Companies Act, 1994, an OPC is a company whose only shareholder is a natural person. That requires any natural person to incorporate an OPC for any permissible purpose by signing the memorandum as the only shareholder. One-person companies are only formed by humans (OPC). The original shareholder's passing requires a nominee. The candidate will inherit the business.
After the owner and shareholder die, one person must operate the business. The owner or shareholder must nominate a nominee. Nomination is open to everyone. After his death, the OPC will receive the candidate recommended by the only shareholder. The nominee shares the rights and duties of the only shareholder. He may appoint someone else after his death. Continue with this process.
OPC's Financial Provisions:
In Bangladesh, a one-person business must have a minimum paid-up capital of BDT Two Million Five Hundred Thousand (Twenty Five Lac). The maximum amount is BDT Fifty Million (Five Crore). The yearly turnover must range from BDT Ten Million (One Crore) to BDT Five Hundred Million (Fifty Crore).
OPC's financial statements must be presented to the Registrar within 160 days after the conclusion of a fiscal year. The Director signs each balance statement and includes the profit and loss or revenue and expenses.
Required Documents and Information:
For Registration of OPC:
The prerequisites for registering an OPC are as follows:
• National ID card or Passport (If the shareholder is a foreign national)
• TIN certificate
• Passport Size picture
• Mobile number
• Email address
For the Nominee:
The same paperwork needed to register the one-person company is also needed for the nominee. After the initial owner's passing, the nominee must be 18 years old to be eligible to inherit the business.
Step 1: Documents Preparation
Prepare the Memorandum of Association (MoA) and Article of Association (AoA) along with Form (IX) and other documents.
Step 2: Name Clearance
To establish a corporation, you need to get a name clearance for the name you want to use. Foreign shareholder only requires this phase according to the new regulation set by RJSC. However, the locals can choose the company's name in the registration application.
Step 3: Opening a Bank Account and receiving Paid-up Capital
Foreign shareholder requires for this phase. You must establish a Bangladeshi-scheduled bank account under the desired business name. After creating the account, you must deposit the foreign shareholder's shares. RJSC needs Bank Encashment Certificates for incorporation.
Step 4: Registration of One Person Company (OPC)
On the RJSC website, you will need to provide all the information. You will also need to upload Form IX and the Subscriber Page. When you have completed all the steps, you will be given a bank payment slip that you can use to pay the government fees and stamp duty.
Step 5: Obtaining an Incorporation Certificate
After completing the registration process, RJSC will provide digitally signed (i) Certificate of Incorporation; (ii) MOA and AOA, and (iii) Form XII. These documents will be sent to the email address registered to your RJSC account. Please check your inbox.
After completing the registration process, OPC must apply for (i) a Tax Identification Number, (ii) Trade License, and (iii) Value Added Tax (VAT) registration. OPC may need other licenses based on their business e.g., Fire License, Environment License, BSTI License, Factory License, etc.
In Bangladesh, one individual may only register one OPC. He/she is not permitted to operate more than one OPC.
Guidelines for share transfers:
The share transferor must provide the list of the relevant Director, the Statement of Annual Capital, and the Transfer Deed with an affidavit to the Registrar of Joint Stock Companies & Firms (RJSC). The transferor must be physically present at the RJSC to validate the signature's legitimacy. Suppose the transferor is a foreign person or lives abroad. In that case, the relevant papers and affidavits must be provided to RJSC after being certified by the authorized official of the relevant embassy.
It is a good thing that Bangladesh has this new movement. The beneficial development will aid in the expansion of the Bangladeshi economy. Many entrepreneurs in Bangladesh will profit from the services offered by a One Person Company (OPC). Furthermore, the conditions are simple and easy if you want to establish a company in Bangladesh with very little capital investment and are an entrepreneur.