One Person Company (OPC) in Bangladesh
India, Pakistan, Australia, Canada and other countries of the world introduced one-person companies earlier, but Bangladesh did not have this opportunity till the Companies Act, 1994 was amended by gazette publication dated November 26, 2020 of the ‘Companies (Second Amendment) Act, 2020’ to allow one-person company management.
In order to increase Bangladesh’s index in terms of World Bank’s Ease of Doing Business Index and to attract domestic and foreign investment by expanding the country’s business and creating an investment-friendly environment, the government introduced One Person Company (OPC) in Bangladesh. A new chapter in the business world of Bangladesh has started by creating an opportunity to establish One Person Company (OPC). This opened a door of opportunity for those who are not interested in doing business with partners or are unable to establish private or public limited companies due to lack of suitable partners.
To know about private limited company registration in Bangladesh, click here.
What is One Person Company (OPC)?
Any natural person may incorporate a One Person Company(OPC) for any lawful object by signing his/her name into the Memorandum as the only shareholder. A natural person can only form a One Person Company. [Section 392(B) (1) (2) of the Companies Act, 1994]
As we are familiar 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].
Transmission of shares
- 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.
One Person Company (OPC) under the Companies Act, 1994
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.
One Person Company (OPC) Registration in Bangladesh: Process of Formation
To set up a One Person Company (OPC) in Bangladesh you have to apply to the Office of the Registrar of Joint Stock Companies and Firms (RJSC) as per rules.
The documents you will need to apply for OPC registration are –
- National Identity Card (NID)
- Mobile number
- Photograph of the applicant
- Email address
- Applicant’s e-TIN number
After the incorporation, the next steps of company formation including Trade License Registration, ETIN, BIN/ VAT Registration (if required) should be completed as per the rules given by the respective regulators.
What is the difference between Sole Proprietorship and One Person Company?
- It is very common to have such questions in your mind. Because two businesses are owned by one person. But even though the ownership is vested in one person, there are some differences between a sole proprietorship business and a one person company.
- The main difference is the entity. A Sole Proprietorship business has no separate entity. But a One Person Company (OPC) has a separate legal entity that separates the company from the owner.
- Liability of a Sole Proprietorship business is unlimited. Because the owner alone has to pay all the liabilities of the business. But the liability of One Person Company is limited. The shareholder is not personally liable to pay the company’s liabilities.
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