Establishing a Trade Organization in Bangladesh under Section 28 of the Companies Act 1994: A Comprehensive Guide
Establishing a trade organization in Bangladesh is governed by specific regulations aimed at promoting transparency, accountability, and effective representation of trade, industry, and commerce. The process, regulated by the Government under relevant provisions, ensures that trade organizations operate within a structured framework. Below is a comprehensive guide to establishing a trade organization in Bangladesh.
Key Requirements for Establishing a Trade Organization
- Licensing from the Government
- No trade organization is permitted to operate without obtaining a government license.
- Licenses are granted based on the organization’s type, purpose, and scope, with restrictions ensuring there is no duplication within a specific trade or region.
- Types of Trade Organizations
Licenses are issued for specific categories of trade organizations, including:
- Federations: Representing various trade organizations across Bangladesh.
- Chambers of Commerce and Industry: Representing businesses in districts or metropolitan areas.
- Trade Associations: Representing specific industries, trades, or services.
- Women’s Chambers of Commerce and Industry: Focused on businesses led by women entrepreneurs.
- Foreign Investors Chambers: Representing foreign business interests.
- Joint Chambers of Commerce: Representing bilateral trade interests with countries or regions maintaining diplomatic or commercial relations with Bangladesh.
- Conditions for Licensing
- Each category of trade organization is limited to one entity per defined area or purpose.
- Promoters must publish notices in newspapers, obtain name clearance from the Director General of Trade Organizations, and secure an opinion from relevant chambers or federations.
- Memorandum and Articles of Association
- The organization’s objectives, operational guidelines, and compliance requirements must be clearly outlined in its Memorandum and Articles of Association.
- These documents must include conditions and restrictions imposed by the Government during licensing.
Step-by-Step Procedure for Establishing a Trade Organization in Bangladesh
Step 1: Name Clearance
- Obtain a name clearance from the Director General of Trade Organizations.
- Ensure the proposed name is unique and complies with the naming requirements.
Step 2: Public Notices
- Publish notices in national and, if applicable, regional newspapers about the formation of the trade organization.
- For federations and other specific trade organizations, publish in at least two national dailies.
Step 3: Licensing Application
- Submit an application in the prescribed format to the Government, including:
- Name clearance documents.
- Published newspaper notices.
- Detailed Memorandum and Articles of Association.
- Necessary declarations and supporting documents.
Step 4: Government Review and Opinion
- For certain trade organizations, secure an opinion from the Federation of Chambers of Commerce and Industry or the relevant district chamber.
- If no opinion is provided within 60 days, the application proceeds without it.
Step 5: Grant of License
- If all requirements are met, the Government issues the license with specific terms and conditions.
- These conditions are binding and must be incorporated into the organization’s governing documents.
Step 6: Registration as a Limited Liability Company
Once licensed, register the trade organization as a limited liability company with the RJSC without adding “Limited” to its name.
Step 7: Affiliation with Chambers or Federations
- Apply for affiliation with the relevant chambers or federations within 60 days of obtaining the license.
- This ensures alignment with the organizational structure and objectives of the Federation of Chambers of Commerce and Industry or district chambers.
Post-Licensing Compliance
- Operational Guidelines
- Adhere to the conditions and restrictions imposed by the Government during licensing.
- Submit regular reports and maintain transparency in activities.
- Exemptions
The Government may exempt trade organizations from specific provisions under special circumstances, as notified in the Government Gazette.
- Prohibition on Registration Without Licensing
No trade organization may apply for registration with the RJSC unless licensed by the Government.
Establishing a trade organization in Bangladesh is a structured process designed to ensure that businesses operate responsibly and in alignment with national interests. By complying with the legal framework and fulfilling licensing requirements, trade organizations can contribute to the growth of commerce and industry while fostering trust among stakeholders. Following the outlined steps and maintaining adherence to regulations will help ensure a smooth establishment process.
Annual Return Submission and Statutory Reporting for Trade Organizations with RJSC
Trade organizations in Bangladesh are required to comply with the regulatory framework set by the Registrar of Joint Stock Companies and Firms (RJSC). This compliance includes the timely submission of annual returns and statutory reporting for any organizational changes. These obligations ensure transparency, accountability, and adherence to corporate governance standards.
Annual Return Submission
The submission of annual returns is a critical responsibility for trade organizations, serving as a formal declaration of the organization’s financial status, structural changes, and operational compliance. The following documents are required for submission:
- Form IX: Consent of Director to Act
Purpose: Indicates a director’s consent to hold office.
Deadline: To be filed within 30 days of appointment.
- Form XII: Particulars of Directors, Manager, and Managing Agents
Purpose: Declares the details of directors, managers, and managing agents and updates any changes.
Deadline: To be filed within 14 days from the date of appointment or change.
- Balance Sheet
Purpose: Reflects the organization’s financial position.
Deadline: To be submitted within 30 days of the Annual General Meeting (AGM).
- Income and Expenditure Account
Purpose: Details the organization’s financial performance during the reporting period.
Deadline: Same as the balance sheet submission timeline.
Statutory Reporting for Changes
Any significant changes within a trade organization, such as modifications to the registered office, appointments, or financial obligations, must be reported to the RJSC. The required filings include:
- Form VI: Notice of Situation of Registered Office or Change Thereof
Purpose: Reports the establishment of or any change to the registered office.
Deadline: To be filed within 28 days of the change.
- Form IX: Consent of Director to Act
Deadline: Within 30 days of the appointment.
- Form XII: Particulars of Directors, Manager, and Managing Agents
Deadline: Within 14 days of the appointment or change.
- Form XVIII: Particulars of Mortgages or Charges
Purpose: Reports the creation of any mortgage or charge.
Deadline: To be filed within 21 days of creation
- Form XIX: Modification of Mortgages or Charges
Purpose: Reflects changes in the terms or scope of existing charges.
Deadline: Within 21 days of modification.
- Form XXVIII: Satisfaction of Mortgage or Charge
Purpose: Indicates the satisfaction or discharge of financial obligations.
Deadline: Within 21 days of satisfaction.
- Digital Copy of Memorandum & Articles of Association
Purpose: Updates any amendments made to the foundational documents of the organization.
Compliance Importance
Legal Penalties: Non-compliance with annual return submission or statutory reporting can lead to penalties, suspension of operations, or legal disputes.
Corporate Transparency: Proper filings ensure the organization maintains its credibility and alignment with regulatory standards.
Stakeholder Trust: Accurate and timely filings build trust with stakeholders, including investors, partners, and regulators.
Trade organizations must adopt robust compliance practices to meet their statutory obligations with RJSC. Timely submission of annual returns and reports of changes safeguard the organization’s legal standing, financial integrity, and operational efficiency. Partnering with a knowledgeable legal advisor can streamline this process and ensure adherence to all regulatory requirements.
How LegalSeba Can Assist You
At LegalSeba, we offer a robust suite of services to facilitate the incorporation of your non-profit organization under Section 28 of the Companies Act, 1994. Our offerings include:
Expert Consultation: We provide comprehensive advice on eligibility criteria, documentation requirements, and regulatory compliance tailored to your organization’s specific needs.
Document Preparation: Our team assists in the meticulous preparation and collection of all necessary documents to ensure that your application meets all legal standards.
Application Management: We handle the entire application process, from submission to approval, ensuring all procedural steps are meticulously followed.
Continuous Follow-up: We maintain regular communication with regulatory bodies to track the status of your application and promptly address any queries or additional requirements.
Inspection Preparation: We help you prepare for regulatory inspections, ensuring your infrastructure and operations comply with all necessary standards.
Lobbying with Authorities: We facilitate effective communication with government authorities to streamline the registration process.
By choosing LegalSeba, you can navigate the complex regulatory environment with confidence, allowing you to focus on your organization’s mission. Contact us today to begin your journey towards establishing a registered non-profit organization in Bangladesh.
Contact Us
For personalized assistance and more information on registering and operating your non-profit organization under Section 28 of the Companies Act, 1994, reach out to LegalSeba and book a consultation with our experts by visiting LegalSeba.com/book-now or contact us at:
Phone/WhatsApp: +8801753718223
Email: support@legalseba.com
