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The Justice Corner 27 Jun, 2025

Forming a Public Limited Company (PLC) in Bangladesh

The formation of a Public Limited Company (PLC) in Bangladesh is a structured process involving several key steps, regulatory approvals, and legal documentation. It requires adherence to the Companies Act 1994 and regulations set forth by the Registrar of Joint Stock Companies and Firms (RJSC) and the Bangladesh Securities and Exchange Commission (BSEC), particularly if the company intends to offer shares to the public.

Phase 1: Pre-Incorporation Steps

Minimum Requirements

  1. Shareholders: A minimum of seven shareholders are required. There is no maximum limit on the number of shareholders for a PLC. Shareholders can be individuals or corporate bodies, local or foreign.
  2. Directors: At least three directors must be appointed. Directors must be individuals, at least 18 years old, not bankrupt, and without any past convictions for malpractice. They must also obtain a Tax Identification Number (TIN) from the National Board of Revenue (NBR) and hold a specified number of qualification shares as per the Articles of Association.
  3. Registered Address: A physical registered office address within Bangladesh is mandatory.

Name Clearance

  • The first official step is to obtain name clearance for the proposed company from the RJSC.
  • An application is submitted online via the RJSC website (www.roc.gov.bd) after creating an account.
  • The proposed name must be unique and not closely resemble any existing company names or be deemed undesirable by RJSC.
  • A fee is payable, and once approved, the name is typically reserved for a period (e.g., 180 days) during which registration must be completed.

Preparation of Foundational Documents

  • Memorandum of Association (MoA): This outlines the company’s objectives, authorized share capital, and subscriber details. The object clause must be clearly defined.
  • Articles of Association (AoA): This includes internal regulations such as share allotment, board meetings, director responsibilities, dividend policies, and winding-up procedures.
  • These must be prepared per the Companies Act 1994 and carefully reviewed.

Phase 2: Incorporation with RJSC

Opening a Temporary Bank Account and Capital Deposit

Though major capital raising occurs after BSEC approval, initial subscribers may need to deposit their subscription money into a temporary bank account in the company’s name. Minimum paid-up capital can be nominal (e.g., BDT 1), though higher amounts are needed for foreign investment or regulated sectors. For foreign investors, remittance of paid-up capital requires a bank-issued encashment certificate.

Submission of Incorporation Documents to RJSC

Required documents include:

  • Name Clearance Certificate
  • Printed and signed MoA and AoA (duly stamped)
  • Particulars of directors, manager, and managing agents (with TIN certificates)
  • Form IX (written consent of directors)
  • Form X (list of persons consenting to be directors)
  • Form I (declaration of compliance)
  • Form VI (notice of registered office)
  • Shareholder details including NID/passport copies
  • Proof of registration fee payment
  • Passport copies for foreign shareholders/directors

Issuance of Certificate of Incorporation

Once RJSC verifies that all legal requirements are fulfilled, a Certificate of Incorporation is issued, establishing the company as a legal entity.

Phase 3: Capital Issue and Public Offering (If Applicable)

Obtaining Consent from BSEC

If the PLC plans to raise capital from the public: It must apply to BSEC per the Securities and Exchange Commission (Issue of Capital) Rules, 2001. Application includes incorporation details, capital structure, and proposed issue data. Certified copies of the MoA, AoA, and other corporate documents must be submitted.

Preparation and Approval of Prospectus

A prospectus must be prepared, detailing the company’s operations, financials, objectives, risks, and share issue terms. The draft is submitted to BSEC for vetting. Once approved, all directors (or agents) sign it, and it is filed with RJSC.

Filing Prospectus with RJSC

Must be filed before being offered to the public. Prospectus should generally be issued within 90 days of RJSC registration.

Public Offering and Subscription

  • IPO can proceed after BSEC approval and RJSC filing.
  • Prospectus must be published on designated platforms.
  • Subscription list opens for a fixed period; issue managers and bankers to the issue are appointed.
  • Underwriting agreements may be used to guarantee full subscription.

Phase 4: Post-Incorporation and Post-Public Offer Formalities

Obtaining Other Licenses and Registrations

  1. Trade License: From the relevant local authority (City Corporation/Municipality/Union Parishad)
  2. TIN: Obtain from NBR
  3. VAT/BIN: Mandatory for most businesses
  4. Other Permits: Depending on nature (e.g., environmental clearance, import-export license, factory license)

Statutory Meeting

Must be held within 1–6 months of becoming entitled to commence business. A statutory report, certified by at least three directors, must be sent to members 21 days prior and filed with RJSC.

Note: Per Companies (Amendment) Act 2020, statutory meeting rules may change; consult professionals for updated requirements.

Annual General Meeting (AGM)

  • First AGM must be held within 18 months of incorporation.
  • Subsequent AGMs must occur yearly, not more than 15 months apart.
  • Audited financial statements are presented and approved.

Issuance of Share Certificates

Share certificates must be issued within a stipulated time per the AoA and Companies Act.

Ongoing Compliances

  • RJSC Filings: Annual returns, director/office changes, corporate actions
  • BSEC Compliances: Applicable for listed companies — includes governance, disclosure, and reporting
  • Tax Returns: Must be filed regularly
  • Statutory Registers: Must maintain register of members, minutes, books of accounts, etc.

Key Considerations for Public Limited Companies

  1. Higher Compliance Burden: PLCs face more rigorous scrutiny and disclosure obligations than private companies.
  2. Public Scrutiny: Fundraising from the public brings added accountability.
  3. Role of Professionals: Engage lawyers, chartered accountants, company secretaries, and merchant banks for smooth formation and IPO execution.

Conclusion

The formation of a Public Limited Company in Bangladesh is a meticulous process requiring detailed planning and strict adherence to legal and regulatory frameworks. Professional guidance is highly recommended to navigate incorporation, public offering, and ongoing compliance efficiently.