PROCEDURE OF SETTING UP A BUSINESS

Type of Organization
Implementing a wholly-owned or joint venture industrial project in Bangladesh
is a fairly simple process. Before going through the process of set up a business
firstly elaborate the type of organization:
Sl.
NO
Types of Organization Acts Authority Remar
ks

1 Company Govt.
Company
PPE
Company
Holding
Company
Subsidiar
y
Company
The Company Act, 1994

Register of
Joint Stock
Companies
and Firms
(RJSCB) &
Bangladesh
Securities &
Exchange
Commission
n (BSEEC)

Charted Company
Statutory Company
Registered
Company

Unlimited Company
Limited
Company

Limited
By shares
Private
limited
Public
Limite
d
Limited by
Guaranty

2 Trade Organizations The Trade Organizations
Ordinance, 1961 &
Companies Act, !994

RJSCB and
Ministry of
Commerce

3 Society The Societies
Registration
Act,1860 and Guideline
of Social Welfare Forum

RJSCB and
Somaj Seba
Odhidoptor

4 Trust The trust act,1882 and

Societies
Registration
Act,1860

RJSCB &
Registry
office
5 Partnership Firm Partnership Act 1932 RJSCB &
Registry
office
6 Foundations The companies Act,1994
& The societies
registration act,1860

RJSCB &
Registry
Office
7 Club The societies registration
Act,1860 & The trade
Organizations
Ordinance 1961

RJSCB &
Ministry of
Commerce
& NSI &
SBI
8 Corporation The Companies Act,1994
& Special Act of
parliament

RJSCB &
Parliament

9 Branch Office The companies Act,1994
& BIDA Guideline

RJSCB &
BIDA
10 Liaison Office The companies Act,1994
& BIDA Guideline

RJSCB &
BIDA
11 NGO NGO Bureau Guideline Somaj Seba
Odhidoptor

12 PPE The Companies Act,1994
& Special Act of
parliament

RJSCB &
Parliament
13 Proprietorship Start with Trade License Different
License
Authority
As set up a company fairly difficult and also most of the business organization
are incorporating as company that is why the entire process of a company is
presented in the following section.
5.2 Introduction for setup a company:

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, Chairman, Managing Director and
Shareholders. 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 shares of each Director, Chairman,
Managing Director & Shareholder’s and qualifying share of Directorship
written down authorized capital and paid up capital of the Company.
5.3 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.
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.
5.4 Essential Features of company:
5.4.1 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.
5.4.2 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.
5.4.3 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.”

5.4.4 Contractual Capacity:
A shareholder of a company, in its individual capacity, cannot bind the
company in any way. The shareholder of a company can enters into contract
with the company and can be an employee of the company.
5.4.5 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.
5.4.6 Capital: A company must have a capital, otherwise it cannot work.
5.4.7 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.
5.4.8 Registered Office: A company must have a registered office.
5.4.9 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.
5.4.10 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.
5.4.11 Transferability:
The shareholder of a company can transfers its share and ordinarily the
transferee becomes a member of the company.
5.4.12 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.
5.4.13 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

5.4.14 Residence:
A company has a residence (for taxation and other purpose). A company does
not possess any fundamental rights.
5.4.15 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.
5.4.16 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;