Types of Companies in Bangladesh: Private, Public, One Person and More

Types of companies in Bangladesh: the 2026 landscape

The types of companies in Bangladesh run from the sole proprietorship to the listed public company, with one person companies, guarantee and non-profit companies, trade organisations and the branches and liaison offices of foreign companies in between. Each answers the same five questions differently: who is liable if the business fails, how many owners it may have, what capital it needs, how heavy the compliance load is and how profits are taxed. A wrong choice is rarely fatal on day one, but it becomes expensive once the business raises money, takes a foreign shareholder or plans an exit.

This guide compares every business vehicle available in 2026 under the Companies Act 1994, the Partnership Act 1932 and BIDA's rules for foreign offices, with a side-by-side comparison table and the status of the draft Companies Act amendment published in August 2026. Where TRW has already published a detailed registration guide, we link to it rather than repeat it.

Summary: Most businesses choose between a private limited company, a one person company, a partnership firm and a sole proprietorship. Foreign investors choose between a local subsidiary, a branch office and a liaison office. Non-profits use a company limited by guarantee licensed under section 28 of the Companies Act 1994. The right choice turns on liability, ownership, capital, compliance capacity, foreign participation and tax.

Key point: Only an incorporated company gives its owners limited liability. A sole proprietor, the partners of a firm and a foreign parent operating through a branch or liaison office all remain exposed to the debts of the Bangladeshi business.

At a glance

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Table of Contents

How Bangladeshi law classifies the types of companies in Bangladesh

No single statute lists every business vehicle. The types of companies in Bangladesh are defined mainly by the Companies Act 1994, which also governs foreign companies; partnerships sit under the Partnership Act 1932; and sole proprietorships exist without any incorporating statute. The clearest way to read the landscape is along three axes: how members' liability is limited, who may own the company and whether it may raise money from the public, and whether the vehicle is a Bangladeshi legal person or an extension of a foreign one.

Classification by liability

Section 5 of the Companies Act 1994 allows a company to be limited by shares, where a member's liability is limited to any amount unpaid on their shares; limited by guarantee, where each member undertakes to contribute a fixed amount on winding up; or unlimited, with no cap on members' liability.[1] Almost every trading company is limited by shares. Guarantee companies serve non-profit and membership bodies. Unlimited companies are lawful but combine corporate formality with partnership-style exposure, so they are rarely used.

Classification by ownership and access to capital

A private company is defined by its articles: they must restrict share transfers, prohibit any invitation to the public to subscribe for shares or debentures, and limit members to fifty, excluding employees. A public company is any company that is not private. A one person company, added to section 2 by the Companies (Second Amendment) Act 2020, is a company whose only shareholder is a single natural person.[1] Sole proprietorships and partnerships, by contrast, have no separate legal personality at all.

Sole proprietorship: the simplest vehicle

A sole proprietorship is a business owned and run by one individual, in their own name or under a trade name. There is no RJSC registration, no memorandum and no board. The business is established by obtaining a trade licence from the city corporation, municipality or union parishad, followed by a taxpayer identification number and, where required, VAT registration. Our guide to the trade licence in Bangladesh covers the process.

The advantages are speed, low cost and control. The drawbacks are structural. Proprietor and business are the same person in law, so every debt and judgment is personal. The business cannot issue shares, so investors cannot come in without a change of form, and it does not outlive the proprietor unless transferred. Income is taxed at individual progressive rates. It suits a local trader or consultant with modest risk, not a business that needs outside capital or a foreign partner.

Partnership firms under the Partnership Act 1932

Section 4 of the Partnership Act 1932 defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all; collectively the partners are a firm.[2] A written deed is not legally essential, but operating without one invites disputes over capital, profit shares, authority and exit.

Joint and several liability

Under section 25, every partner is liable, jointly with the other partners and also severally, for all acts of the firm done while they are a partner.[2] A creditor can pursue any one partner for the whole debt, and each partner's acts in the ordinary course of business bind the firm. This is the main reason growing partnerships incorporate.

Registration and the section 69 bar

Registration is optional. Under section 58 a firm may be registered at any time by filing its name, place of business, partners and duration with the Registrar of Firms, a function of the RJSC.[2] The incentive is section 69: an unregistered firm cannot sue a third party to enforce a contract, and a partner cannot sue the firm or co-partners on contractual or statutory rights, unless the firm is registered and the claimant is shown in the Register of Firms. Suits for dissolution and accounts of a dissolved firm are unaffected.[2] Any firm that expects to enforce contracts should register.

The cap on partners

Section 4 of the Companies Act 1994 prohibits a partnership or association of more than twenty persons carrying on business for profit, or more than ten for banking, unless it is incorporated or formed under another law. Members of a non-compliant association are personally liable for its debts and liable to a fine.[1]

Private limited company: the default choice

For most commercial activity, and for most foreign subsidiaries, the private limited company is the right answer among the types of companies in Bangladesh. It offers limited liability, perpetual succession and separate legal personality without the disclosure and governance load of a public company.

Members, directors and name

Two or more persons may form a private company, membership is capped at fifty excluding employees, and joint holders count as one member. Section 90 requires at least two directors, or three if the company is a subsidiary of a public company, and only a natural person may be a director. Section 11A requires the name to end with "Limited" or "Ltd."[1] Shareholders may be individuals or companies, Bangladeshi or foreign.

Capital and compliance

The Companies Act 1994 prescribes no general minimum share capital for a private company; sector regulators, lenders and foreign-exchange rules drive the real figure, and foreign subscriptions must arrive through banking channels.[14] A private company holds AGMs, keeps registers, has its accounts audited and files an annual return, but it is exempt from the statutory meeting under section 83 and the certificate to commence business under section 150.[1] Procedure and fees are covered in our guide to private limited company registration in Bangladesh, and the annual cycle in annual return filing in Bangladesh.

Public limited company: access to public capital

A public company needs at least seven members to incorporate, has no maximum and must have at least three directors. Since 2020 its name must end with "Public Limited Company" or "PLC".[1] It may offer securities to the public, subject to the Bangladesh Securities and Exchange Commission, and its shares are freely transferable unless the articles provide otherwise.

The price is compliance. Under section 150, a public company may not commence business or borrow until shares at least equal to the minimum subscription are allotted, directors have paid for their shares and the Registrar certifies that it may commence business; earlier contracts are provisional. Section 83 adds a statutory meeting and report.[1] Listing brings BSEC governance rules and continuous disclosure. Many banks, insurers and large groups are unlisted public companies. Our guide to the public limited company in Bangladesh covers formation and conversion.

One person company: what the 2020 amendment actually requires

Parliament passed the Companies (Second Amendment) Bill on 17 November 2020, introducing the one person company.[3] The rules sit in Part X-A of the Companies Act 1994, sections 392A to 392L.[1]

Who can form one

Under section 392B, one natural person may form an OPC for any lawful purpose, and may form only one. A company cannot be the sole shareholder, so a corporate group cannot use an OPC as a wholly owned subsidiary. Under section 392H, OPC shares may be transferred only to a single natural person.[1]

The mandatory nominee

The memorandum must name a nominee, with written consent, who becomes shareholder if the sole shareholder dies or becomes incapable or of unsound mind. The nominee may withdraw, the shareholder may substitute another, and changes must be notified to the Registrar.[1] This gives the OPC a continuity a sole proprietorship lacks.

The capital and turnover band

Section 392C requires paid-up capital of Tk 25 lakh to Tk 5 crore and preceding-year turnover of Tk 1 crore to Tk 50 crore. Where both exceed those limits, the OPC may convert into a private or public company.[1] The turnover floor is the provision founders most often misread, because a new business has no preceding-year turnover; take advice on how the RJSC applies the band at incorporation.

Governance and filings

The sole shareholder is the director, and managers, a company secretary and staff may be appointed. At least one board meeting must be held in each half of the calendar year, financial statements signed by the shareholder-director must be filed within 180 days of the year end, and the audit provisions apply. The name must end with "One Person Company" or "OPC".[1] Our guide to the one person company in Bangladesh walks through registration.

Company limited by guarantee and section 28 non-profit companies

Charities, chambers, professional bodies, foundations, schools and many NGOs operate as companies, usually combining two tools.

Company limited by guarantee

Members do not buy shares; each undertakes to contribute a fixed sum on winding up.[1] For a guarantee company without share capital, section 29 voids any provision giving a person a right to divisible profits otherwise than as a member.[1]

The section 28 licence

Section 28 allows the Government, by licence approved by a Secretary, to register an association formed to promote commerce, art, science, religion, charity or another useful object as a limited company without "Limited" in its name, if it applies its income to those objects and prohibits dividends to members. Licence conditions may have to be written into the memorandum or articles. The company is not required to send a list of members to the Registrar, and the licence may be revoked after written notice and a hearing.[1]

Section 28 status is a company-law status, not a tax exemption; any relief must be found in tax legislation. A non-profit receiving foreign donations also needs NGO Affairs Bureau registration. See our guide to the NGO and not-for-profit registration framework in Bangladesh.

Trade organisations

Chambers of commerce and sector associations form a special category. The Trade Organisation Act 2022, gazetted in April 2022, replaced the Trade Organisations Ordinance 1961, provided for inter-country joint chambers so that foreign traders can form joint trade bodies, and raised the maximum fine to Tk 1 lakh. About 955 trade bodies then held licences.[12]

A trade organisation needs a licence under that legislation and incorporation under section 28 of the Companies Act 1994, which remains its primary corporate law. The two regimes do not always align: the Trade Organisation Rules 2025, made on 22 May 2025, set a 24-month board term, a one-third quorum for general meetings and fixed fees, which chambers argued conflict with the Companies Act and their articles, and the commerce ministry began revising them in September 2025.[13]

Foreign company options: subsidiary, branch and liaison office

For an overseas business the question is whether it wants a Bangladeshi legal entity or a registered extension of the parent. Our guide to foreign company registration in Bangladesh covers the mechanics; this section compares the options.

Local subsidiary

A subsidiary is a private or public company incorporated with the RJSC. It is a separate legal person, so the parent risks only its investment, and it may carry on any lawful business subject to sector rules.[14] As a general principle 100 per cent foreign ownership is permitted in most sectors; foreign shareholding is limited in sectors such as telecommunications, aviation, freight forwarding, customs agency and shipping, and a few reserved sectors, including arms and security printing, are closed to private investment.[11] Because a private company needs two shareholders, a foreign group usually holds one share through an affiliate.

Branch office

A branch is not a separate entity, so the parent bears full liability.[14] It may carry on the commercial activities BIDA approves and earn income from them. Applications go through BIDA's one-stop service portal to an inter-ministerial committee that meets twice a month.[9] Approval is usually for an initial three years, renewal must be sought at least two months before expiry, and at least US$50,000 must be remitted within two months of approval.[10] Branch profits are taxed at the unlisted-company rate, with a further 20 per cent branch profit tax on remittances to head office.[8]

Liaison and project offices

A liaison or representative office may coordinate between the parent and local agents, distributors or exporters and gather business information, but has no local income: the parent funds all costs, and outward remittance is limited to unspent funds brought in from abroad. The same US$50,000 remittance and three-year pattern apply. A project office, introduced by BIDA in 2023, is tied to a specific government, development-partner or private project and needs the implementing agency's recommendation.[10]

Registration with the RJSC

Under section 379, a foreign company must, within thirty days of establishing a place of business in Bangladesh, file its certified constitution (with a certified translation if needed), head office address, list of directors and secretary, the name and address of a Bangladesh resident authorised to accept service, and its principal Bangladesh address. Section 380 requires annual accounts.[1]

Holding companies, subsidiaries and groups

A group is not a separate vehicle. Under section 2(2) of the Companies Act 1994, a company is a subsidiary of another that controls the composition of its board, holds more than half the nominal value of its equity share capital, or holds it through another subsidiary.[1] A private subsidiary of a public company needs three directors. Business bodies used the 2026 consultation to ask for a single definition of "company group" across company and banking law.[5] See our analyses of holding and subsidiary companies in Bangladesh and joint ventures in Bangladesh.

Tax treatment across the types of companies in Bangladesh

For assessment years 2026-27 to 2030-31, a company that is not publicly traded pays 27.5 per cent, or 25 per cent if all transactions are made through bank transfer. A publicly traded company that has floated at least 10 per cent of its paid-up capital pays 22.5 per cent, or 20 per cent on the same condition; one with less than 10 per cent floated pays 25 per cent, or 22.5 per cent.[7]

Firms, trusts and associations of persons pay 27.5 per cent, cooperative societies 20 per cent, and banks, insurers and financial institutions 37.5 per cent if listed or 40 per cent if not. The published table has no separate band for one person companies, so an OPC should plan on the non-listed company rate unless the National Board of Revenue confirms otherwise.[7] A sole proprietor is taxed as an individual.

For foreign investors, a branch pays the unlisted-company rate and 20 per cent branch profit tax on remittances, which a bank will not process until the tax is deposited.[8] A subsidiary pays corporate tax and then dividend withholding tax, which a treaty may reduce. Our corporate tax practice models both routes.

Comparison table: the types of companies in Bangladesh side by side

The figures are those in force on 20 October 2026. On a phone, scroll the table sideways.

Limited liability comes only with incorporation, and the lighter the compliance, the greater the personal exposure. The private limited company dominates because it alone combines limited liability, multiple and foreign owners, no minimum capital and manageable compliance.

Choosing the right type of company

Choosing among the types of companies in Bangladesh is a structuring decision. We test six questions before recommending a vehicle.

• Risk: if exposure could exceed the owners' appetite, only a company ring-fences it.
• Ownership: one individual can use an OPC; one corporate owner cannot. Two to fifty owners point to a private company; more, or public investors, to a public company.
• Foreign participation: a foreign shareholder needs a company; a parent that only needs presence may use a liaison office; one that will invoice locally needs a branch or subsidiary.
• Funding: equity investors, ESOPs and convertibles need shares, which rules out proprietorships and partnerships.
• Compliance capacity: audits, registers, meetings and filings are mandatory for companies; do not incorporate for prestige alone.
• Purpose: a body that will not distribute profits belongs in a section 28 guarantee company.

Founders should read this with our startup law in Bangladesh guide and our overview of company registration in Bangladesh.

Step-by-step: selecting and setting up the vehicle

This is the sequence TRW follows from business plan to a registered, compliant entity.

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Converting from one type to another

A proprietorship or partnership converts by incorporating a company and transferring the business to it; licences, bank accounts and tax registrations must be obtained afresh. A private company becomes public by removing the private-company restrictions from its articles, meeting the public-company minimums and adopting the PLC suffix, and an OPC that outgrows its band may convert under section 392C(2).[1] Replacing a branch with a subsidiary requires a new incorporation and BIDA approval to close the branch, with tax clearance and Bangladesh Bank reporting before residual funds leave.[14]

The 2026 Companies Act amendment: where it stands

The Companies Act 1994 was last amended twice in 2020. The draft Companies Act 1994 (Third Amendment) 2026 was published on the official website on 19 August 2026 for feedback.[6] At an FBCCI consultation on 7 September 2026 attended by Commerce Minister Khandaker Abdul Muktadir, business leaders sought 30 to 60 more days to respond, and the FBCCI said a revised draft would follow.[5] [6] As at 20 October 2026 the amendment has not been enacted.

What the draft would change

The draft would widen the OPC paid-up capital range to Tk 5 lakh to Tk 50 crore, remove the fixed turnover threshold and require conversion only when both capital and turnover exceed Tk 100 crore.[4] That would make the OPC a realistic option for small founders.

For every company, it proposes beneficial-ownership declarations, a mandatory company secretary for listed companies and those with paid-up capital above Tk 50 crore, RJSC rather than court approval of memorandum changes, electronic registers, automatic registration on the RJSC model documents and simpler striking off after two years of dormancy.[4] Business bodies noted that only about 57,000 to 58,000 of roughly 300,000 registered companies had been audited since 2020.[5] Our company law in Bangladesh analysis tracks the draft.

Mistakes to avoid when choosing among the types of companies in Bangladesh

• Trading through a liaison office: sales contracts or local income fall outside its BIDA permission.
• Leaving a partnership unregistered: section 69 can stop the firm suing its own customers.[2]
• Assuming a company can own an OPC: only one natural person can, and only one OPC each.[1]
• Treating section 28 as a tax exemption: it is a company-law licence with binding conditions.
• Bringing in foreign equity informally: unreported subscriptions create repatriation problems on exit.[14]
• Choosing on formation cost alone: the cheapest vehicle is often the dearest to restructure.

Our corporate and commercial advisory practice and branch and foreign company establishment practice model the options against your plan. Contact TRW to discuss your structure.

Frequently asked questions

What are the main types of companies in Bangladesh?

Companies may be limited by shares, limited by guarantee or unlimited, and private, public or one person companies. Section 28 non-profit companies and registered foreign companies complete the list. Sole proprietorships and partnerships are business vehicles but not companies.[1]

How many shareholders and directors does a private limited company need?

Two to fifty members, excluding employees, and at least two directors, or three if it is a subsidiary of a public company.[1]

Is there a minimum capital to register a company in Bangladesh?

Not generally, though sector regulators may set one. A one person company needs paid-up capital of Tk 25 lakh to Tk 5 crore.[1]

Can a company form a one person company?

No. The sole shareholder must be a natural person, and each person may form only one OPC.[1]

Can a foreign investor own 100 per cent of a Bangladeshi company?

In most sectors, yes, although foreign shareholding is limited in sectors such as telecommunications, aviation and shipping.[11]

What is the difference between a branch office and a liaison office?

A branch may carry on BIDA-approved commercial activities and earn income; a liaison office may only coordinate and gather information. Both leave the parent fully liable.[10] [14]

Is registration of a partnership firm compulsory?

No, but under section 69 an unregistered firm cannot sue third parties on its contracts.[2]

What is a section 28 company?

A company licensed to register without "Limited" in its name because it promotes a useful object and pays no dividends to members.[1]

What is the corporate tax rate for a private limited company in 2026?

27.5 per cent, or 25 per cent if all transactions are made through bank transfer.[7]

Is the Companies Act being amended in 2026?

A draft Third Amendment was published on 19 August 2026 and remained under consultation; it had not been enacted as at 20 October 2026.[4] [6]