Bankruptcy

Exiting or Closing a Business in Bangladesh

Exiting or closing a business in Bangladesh involves specific legal procedures depending on the type of business entity and the circumstances of the exit. Whether it’s a planned cessation of operations, a transfer of ownership, or insolvency, understanding the correct pathway is crucial for compliance and minimising liabilities.

Bankruptcy in Bangladesh: Legal Framework and Procedures

Introduction

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Bankruptcy is a legal process designed to provide relief for individuals and entities unable to pay their debts. In Bangladesh, the primary legislation governing this is the Bankruptcy Act, 1997. This Act aims to ensure an orderly process where a debtor’s assets are distributed fairly among creditors, while also offering the debtor protection from legal action by creditors and, ultimately, a fresh start from overwhelming debt. However, it’s noted that the 1997 Act is considered somewhat outdated and may not effectively address modern corporate insolvency complexities.