One Person Company [OPC] formation in Bangladesh

What Is One Person Company (OPC) ?

One Person Company [OPC] : New Look to the Company Name

As we are accustomed to see (LTD) after the name of a company, OPC (One Person Company) should be written for indication of Limited Company when formed by a single person except where there is a NGO and Company Limited by Guarantee. [ Section 11(Ka) of the Companies Act, 1994]

Transfer of Share

The transferor of the shares shall submit the list of the concerned Director, Statement of Annual Capital, and Deed of Transfer including Affidavit to the registered office of the Registrar (RJSC).

Afterward, the transferor shall appear in person to the registered office of the Registrar to reconfirm the authenticity of his signature. If the transferor is a foreign national or resides abroad, the documents and affidavits relating to the transfer of shares shall be sent to RJSC after certification by the authorized officer of the concerned embassy.

Transmission of shares for One Person Company (OPC)

• In the event of the death of a sole shareholder of OPC, the nominee/assignee shall be entitled to get all the shares of the shareholder and such an issue has to be informed to the register by the company itself.
• The nominee shall entitle to get the same dividend and other benefits as the deceased shareholder and shall be liable in the same manner.
• The nominee/assignee shall also nominate another person with his/ her written consent who will become the shareholder of the company in case of the death of such nominee.

Registration Procedure for One Person Company (OPC)

Memorandum and Article of Association – As per section 392A, Memorandum and Articles of Association means and includes Memorandum and Article of Association mentioned in Schedules 9A and 9B.

Structure

As per section 392B, A natural person may form a One Person Company (OPC) for any legal purpose, and may sign in the memorandum.

It is mandatory to insert the name of one or more nominee/ assignee in the Memorandum and in the Article of Association of OPC. But a natural person may only form a One Person Company (OPC).

Share Capital

As per section 392C, the paid-up capital of an OPC shall be a minimum of Tk. 25 Lakhs and maximum Tk. 5 Crores and the annual turnover of the previous financial year is at least Tk. 1 Crore and at most Tk. 50 Crores. If the paid up capital of OPC exceeds the amount specified above and the annual turnover exceeds the amount specified above then subject to the necessary terms and conditions, a natural person can transfer OPC to a private limited company or a public limited company.

Director

As there is only a sole shareholder of OPC, He/She shall be its Director as well as manager, company secretary and other employees may be appointed to manage One Person Company (OPC).

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).

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.

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.

Frequently asked questions (FAQ)

What is a One Person Company (OPC)?

• A One Person Company (OPC) is a type of business structure in Bangladesh where a single individual can form and operate a company with limited liability.

Who can form a One Person Company in Bangladesh?

• Any individual who is a Bangladeshi citizen and is not a minor can form a One Person Company. The person must act as both the shareholder and the director.

What is the minimum capital required to form an OPC in Bangladesh?

• The minimum paid-up capital required to register a One Person Company in Bangladesh is BDT 2.5 million (25 lakh).

Can a foreigner form a One Person Company in Bangladesh?

• No, only Bangladeshi citizens can form a One Person Company. Foreigners are not eligible to register an OPC in Bangladesh.

What documents are required to register a One Person Company in Bangladesh?

• The required documents include the National ID or passport of the owner, proof of registered office address, Articles of Association (AoA), Memorandum of Association (MoA), and the owner’s digital signature.

How long does it take to register a One Person Company in Bangladesh?

• The registration process typically takes between 10 to 15 working days, depending on the accuracy of the submitted documents and the processing time of the Registrar of Joint Stock Companies and Firms (RJSC).

What are the benefits of forming an OPC in Bangladesh?

• The main benefits include limited liability protection, easier management as it only requires one person, and better credibility compared to sole proprietorships.

Can an OPC be converted into a private or public company in Bangladesh?

• Yes, an OPC can be converted into a private or public limited company by following the necessary legal procedures and meeting the regulatory requirements of the RJSC.

Is there any annual compliance required for an OPC in Bangladesh?

• Yes, an OPC must file annual returns, maintain proper accounting records, and comply with tax regulations. The company is also required to hold annual general meetings (AGM).

What happens to the OPC if the owner dies or becomes incapacitated?

• In the event of the owner’s death or incapacitation, the nominee specified during the registration of the OPC will take control of the company and ensure its continuation.