Can a foreigner form OPC?

There is no clear restriction preventing a foreigner from forming an OPC in Bangladesh. However, the registration process requires the shareholder’s National Identity Number (NID), which a foreigner does not possess. As a result, a foreigner may face challenges in registering an OPC.

Capital

According to Section 392C, the minimum paid-up capital for a One Person Company (OPC) is 25 lakh takas, with a maximum limit of 5 crore taka. Additionally, the annual turnover for the previous fiscal year must fall between 1 crore and 50 crore taka. If the paid-up capital or turnover exceeds these thresholds, the sole shareholder is required to convert the business into either a public limited company or a private limited company, subject to fulfilling specific conditions. This conversion process also requires the preparation of a memorandum and articles of association, as outlined in Section 392.

Documents required for registration of one person company

To register a one-person business, the nominee and the only shareholder need the following documents:

1. National ID card
2. Passport Size picture
3. TIN certificate
4. Mobile number
5. Email address
6. Signature

Steps to Register a One Person Company (OPC) in Bangladesh

Step 1: Prepare Required Documents

Draft the Memorandum of Association (MoA) and Articles of Association (AoA), along with Form IX and other necessary documents.

Step 2: Name Clearance

Obtain name approval from RJSC for your company. Foreign shareholders must complete this step separately, while local entrepreneurs can choose the company name during registration.

Step 3: Open a Bank Account & Deposit Paid-up Capital

Foreign shareholders must open a bank account in a scheduled Bangladeshi bank under the company name and deposit their share capital. A Bank Encashment Certificate is required for registration with RJSC.

Step 4: Register the OPC

Submit all required details, Form IX, and the Subscriber Page on the RJSC website　https://app.roc.gov.bd. After submission, you will receive a bank payment slip to pay the government fees and stamp duty.

Step 5: Receive Incorporation Certificate

Once registration is complete, RJSC will issue a digitally signed Certificate of Incorporation, MoA & AoA, and Form XII. These documents will be sent to your registered email.

Post Registration:

After completing the registration process, OPC must apply for (i) a Tax Identification Number, (ii) Trade License, and (iii) Value Added Tax (VAT) registration. OPC may need other licenses based on their business e.g., Fire License, Environment License, BSTI License, Factory License, etc.

Considerations For One Person Company (OPC)

Director

As the sole shareholder, the director of an OPC in Bangladesh assumes the roles of manager, secretary, and director. Additional staff may be hired for management purposes.

Board Meetings

In accordance with Section 392F, the board is required to meet at least once every six months.

Memorandum of Association

As per section 392A, Memorandum and Articles of Association mean and includes Memorandum and Article of Association mentioned in Schedules 9A and 9B. The memorandum must include the name of the nominee who will assume the role of shareholder in the event of the shareholder’s death or incapacity. The nominee will have the same rights and obligations as the original shareholder. If the nominee wishes to withdraw, they can simply revoke their consent. In the case of the nominee’s death or incapacity, the shareholder may replace the nominee. The nominee also has the right to appoint a new nominee upon their passing.

Modification of the Memorandum

Any changes to the memorandum must be communicated to the Registrar in accordance with the prescribed procedure. Modifications require approval from the highest court, while changes to the articles of association can be made by contacting the RJSC office.

Balance Sheet

As per section 392I, The OPC must submit its balance sheet and other required documents to the Registrar within 180 days after the fiscal year-end. The balance sheet, signed by the director, must include a profit and loss statement.

Transfer of OPC Shares

Shares of the OPC can be transferred to any other individual, provided they are a natural person and comply with the restrictions set forth in Section 392H.

Required Documents for Share Transfer of the Company under section

(i)  A letter containing that the Board of Directors of the Company approved the share transfer;

(ii)  A document containing several shares to be transferred of the Company;

(iii) Form 117 (signed);

(iv) Board Resolution by the company approving the transfer of the shares; and

(v) Share Transfer Certificate.

Liabilities of an OPC

The liabilities of the company do not affect the shareholder personally. In the event of unforeseen circumstances, the shareholder’s personal assets are not at risk, unlike in a sole proprietorship where personal assets may be used to settle business debts. The shareholder’s liability is limited to the unpaid portion of their capital contribution.

Benefits of a One Person Company (OPC) in Bangladesh

1. Easy Incorporation: OPC can be established with minimal compliance, requiring only one member and a nominee.
2. Full Control: A single owner manages the business, ensuring quick decision-making and efficient operations.
3. Small Business Benefits: OPCs enjoy advantages like easy financing, lower compliance, and affordable loan rates.
4. Easier Funding: They can secure investments from financial institutions and convert into a private company for larger funding opportunities.
5. Enhanced Credibility: Annual audits increase trust and reliability in the business sector.
6. Growth Potential: A centralized management system supports business expansion and economic contribution.
7. Stability: With no shareholder disputes, OPCs offer a stable business structure.

Conclusion

The introduction of OPCs in Bangladesh is a positive step for entrepreneurship and economic growth, benefiting many aspiring business owners.