One Person Company (OPC) Formation & Registration Procedure in Bangladesh

The 'Companies (2nd Amendment) Act, 2020' was recently passed in Bangladesh Parliament, keeping provision for the formation of one-person companies (OPC), with only one natural shareholder. Even though the provisions in the Act do not incorporate any bar for a foreigner in forming an OPC, the particulars in the prescribed form of memorandum require NID of the shareholder, which will not be available for a foreigner, and thus a foreigner may not be able to form an OPC. The memorandum of an OPC must state the name of the nominee (with consent) who would become the shareholder of the company upon death or incapacity of the shareholder. While the Act is aiming to attract greater investment, OPC needs minimum paid-up capital of BDT 2.5 million, which may not be entirely consistent with the objective. In case the paid-up capital exceeds BDT 50 Million, the OPC has to be converted to other forms of companies.

1. Authorized Capital: You must state the authorized capital in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that the company is authorized to issue (allocate) to shareholders. Part of the authorized capital can remain issued. There is no minimum or maximum limit for authorized capital in Bangladesh.
2. Paid-up Capital: Paid-up capital (also known as share capital) can be increased any time after the incorporation of the company. Registered Address: In order to register a company in Bangladesh, you must provide a local address as the registered address of the company. The registered address must be a physical address (can be either a residential or commercial address).
3. Memorandum and Articles of Association: The company to be incorporated must prepare a memorandum of association (MOA) and articles of association (AOA). As per section 392A, Memorandum and Articles of Association mean and includes Memorandum and Article of Association mentioned in Schedules 9A and 9B.
4. Meeting: As per section 392F, the Director of OPC will call at least one board of directors meeting in every half year. Amendment– As per section 392G, if any changes are made in the Memorandum and Article of Association of the OPC, the Company will notify about such changes to the Registrar of Joint Stock Company (RJSC).
5. Transfer of shares to the natural person: As per section 392H, All shares of the OPC can be transferred to any other individuals with natural beings subject to the provision of section 38.
6. Balance sheet: As per section 392I, in the case of OPC, within 160 days of the end of a financial year, its financial statements must be submitted to the Registrar. Each balance sheet consists of the profit and loss or income and expenditure and signed by the Director.