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Business laws and regulations of Bangladesh

RJSC

Presence of shareholder is mandatory for share transfer – RJSC

Physical presence of the shareholder is now compulsory for transfer of shares. By a circular on March 27, 2016, the Registrar of Joint Stock Companies and Firms (RJSC) impose this condition. Main goal of the circular is to prevent fraud relating to transfer of shares.

The circular does not provide any guideline for corporate shareholders or foreigner shareholders. How these types of shareholders will transfer their shares is not clear from the circular.

Though RJSC issued this circular now, in practice, they imposed this condition for the last several months. We are already facing trouble with transferring share of some of our foreign and corporate clients.

You may read this article to learn more about transfer of shares of a Bangladeshi company.

eTIN Number now required for foreign Directors to incorporate a company in Bangladesh

Update 21/10/2015: after to the recent amendment in the Finance Act 2015 and recent meetings between RJSC and NBR, it is no longer required for the foreign directors to obtain TIN. 

Registrar of Joint Stock Companies and Firms (RJSC) and National Board of Revenue (NBR) now requires eTIN number for foreign Directors to incorporate a new company. Without an eTIN, RJSC does not issue the Certificate of Incorporation and NBR does not issue eTIN for the newly incorporated company. Previously only the Bangladeshi Directors require eTIN number for company incorporation.

Unfortunately both NBR and RJSC introduced this new requirement for foreign director without any prior notice. It creates an uproar and confusion among various parties who deal with company incorporation. Obtaining eTIN for foreigner is also confusing and difficult in the absence of any clear guideline.

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You can no longer use the word “Group” on your company name

For whatever reason, if you want to register a company with the word “group” in its name, well, good luck with that. Registrar of Joint Stock Companies and Firms (RJSC) on February 9, 2015 through a notice requested not to apply for name clearance with the word “group”.

In Bangladesh, “group” is usually used in company name to suggest that it is a holding company (i.e. a parent company of several other subsidiary companies).

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