Commercial Law in Bangladesh: A 2026 Map of Statutes, Contracts and Disputes

Commercial law in Bangladesh: the 2026 map

Commercial law in Bangladesh is not one code. It is a stack of statutes, some written in the nineteenth century and some passed in 2026, that together decide whether a deal binds, who can enforce it, which court or tribunal hears the dispute and what a winning party actually recovers. The Contract Act 1872 still sits at the base.[1] Above it, the Commercial Courts Act 2026 has given business disputes their own courts and timetable for the first time.[8]

This overview is a map, not a treatise. It identifies the statutes that matter, shows how each common commercial contract is governed, sets out the dispute routes and records the reforms of 2026. Where TRW has a detailed guide on a single statute or contract, this article links to it rather than repeating it.

Summary: Commercial law in Bangladesh rests on the Contract Act 1872, the Sale of Goods Act 1930 and the Partnership Act 1932, overlaid by the Companies Act 1994, the Negotiable Instruments Act 1881, the Arbitration Act 2001, the Competition Act 2012, consumer and intellectual property statutes, and since January 2026 the Commercial Courts Act. Most business disputes now go to specialist Commercial Courts or to arbitration, and 2026 brought new rules on cheque cases, personal data and investment institutions.

Key point: The Commercial Courts Act 2026 lists franchising, distribution, licensing, agency, joint venture, shareholder, outsourcing, partnership and sale of goods agreements among its twenty-four categories of commercial dispute. Every major commercial contract signed in Bangladesh should now be drafted on the assumption that a Commercial Court, or an arbitral tribunal the contract chooses instead, will be the forum that tests it.

At a glance

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Table of Contents

How commercial law in Bangladesh is built

Bangladesh is a common law jurisdiction. Its commercial statutes were largely inherited from British India and amended piecemeal since independence, and English and Indian authorities on identically worded provisions remain persuasive. A contract question in Dhaka is often answered by reading an 1872 statute alongside a recent High Court Division judgment.

Four layers of law sit on top of one another in almost every transaction:

• General private law: the Contract Act, the Sale of Goods Act, the Partnership Act and the Negotiable Instruments Act decide whether obligations exist and how they are performed and discharged.
• Entity law: the Companies Act 1994 and the rules of the Registrar of Joint Stock Companies and Firms (RJSC) decide who can sign, who owns what and how a business vehicle is governed.
• Regulatory law: competition, consumer, foreign exchange, investment, tax, labour, data and sector statutes decide whether a lawful contract can actually be performed, and on what conditions.
• Procedural and dispute law: the Commercial Courts Act 2026, the Code of Civil Procedure, the Arbitration Act 2001 and the limitation rules decide where and how rights are enforced.

A deal that is sound in one layer can fail in another. A well-drafted distribution agreement may be an unenforceable restraint of trade, a prohibited vertical restriction or impossible to pay under foreign exchange rules, so every transaction should be tested against all four layers before signature. The table below maps the principal statutes. On a phone, scroll it sideways.

The core statutes of commercial law in Bangladesh

Each entry below is deliberately brief and points to TRW's detailed analysis.

Contract Act 1872

The Contract Act 1872 (Act No. IX of 1872) remains the general law of obligations. It covers proposal and acceptance, free consent, void agreements, contingent contracts, performance, and the consequences of breach in sections 73 to 75.[1] It also contains three specialised chapters that commercial parties use every day: indemnity and guarantee (sections 124 to 147), bailment, including pledge (sections 148 to 181), and agency (sections 182 to 238).[1] The original chapters on sale of goods and partnership have been repealed and replaced by separate Acts.[1]

Formation, consideration, free consent, restraint of trade, liquidated damages and frustration are covered in our guide to contract law in Bangladesh. How a contract claim is actually pursued to judgment and payment is covered in our guide to contract enforcement in Bangladesh.

Sale of Goods Act 1930

The Sale of Goods Act 1930 (Act No. III of 1930) governs every contract to sell movable goods for a price. It distinguishes conditions from warranties in section 12, implies conditions as to quality or fitness in section 16, fixes when property passes, and provides in section 26 that risk prima facie passes with property.[2] Chapter V gives an unpaid seller rights against the goods, and Chapter VI sets out suits for the price, damages for non-acceptance or non-delivery and remedies for breach of warranty.[2] They apply whenever the written contract is silent.

Partnership Act 1932

Many Bangladeshi businesses still trade as partnership firms. The Partnership Act 1932 (Act No. IX of 1932) governs relations between partners, their liability to third parties and dissolution.[3] Registration with the Registrar of Firms is permissive: section 58 says a firm "may" register at any time.[3] The consequence of not registering is severe. Under section 69, an unregistered firm cannot sue a third party to enforce a contractual right, and a partner cannot sue the firm or co-partners to enforce contract rights, unless the firm is registered and the persons suing are shown in the Register of Firms as partners.[3]

Companies Act 1994

The Companies Act 1994 governs incorporation, share capital, directors, meetings, minority protection and winding up for every company registered with the RJSC. A draft Third Amendment, reported in August 2026, would add beneficial-ownership declarations, electronic registers, automatic registration with model documents and direct fining powers for the Registrar.[4] Directors' duties, shareholder remedies and the reform proposals are analysed in our guide to company law in Bangladesh. How investors allocate control through contract is covered in our guide to shareholder agreements in Bangladesh.

Negotiable Instruments Act 1881

Cheques, promissory notes and bills of exchange are governed by the Negotiable Instruments Act 1881. Its section 138 makes the dishonour of a cheque for insufficient funds a criminal offence, which is why post-dated and security cheques are so common in Bangladeshi trade credit. The Negotiable Instruments (Amendment) Act 2026, Act No. 65 of 2026, substituted section 141(c): a section 138 offence involving a cheque with a face value above Tk 5 lakh can now be tried only by a Joint Sessions Judge or Metropolitan Joint Sessions Judge, while other cheque cases go to a Magistrate of the first class or a Metropolitan Magistrate.[5] Notice, filing and trial are covered in our guide to cheque dishonour in Bangladesh.

Arbitration Act 2001

The Arbitration Act 2001 (Act No. 1 of 2001) governs arbitrations seated in Bangladesh and the enforcement of foreign awards. Section 7 bars courts from hearing matters covered by an arbitration agreement except as the Act allows, section 7A permits interim orders, section 39 makes awards final and binding, sections 42 and 43 provide the only route to set an award aside, and sections 45 and 46 govern recognition and enforcement of foreign awards.[6] The framework, institutions and recent case law are set out in our guide to arbitration law in Bangladesh.

Commercial Courts Act 2026

The Commercial Courts Act 2026, Act No. 23 of 2026 dated 10 April 2026, is deemed to have come into force on 1 January 2026 and repealed the Commercial Court Ordinance 2026 while saving everything done under it.[8] It sends disputes in twenty-four listed categories to specialist Commercial Courts, excluding matters within the original jurisdiction of the High Court Division and claims within the jurisdiction of the Artha Rin Adalat.[8] On 3 February 2026 the Law and Justice Division notified 75 Commercial Courts across the country, eleven of them in metropolitan areas.[9] Jurisdiction, mediation, timetables, summary judgment and appeals are analysed section by section in our guide to the Commercial Courts Act Bangladesh.

Competition Act 2012

The Competition Act 2012 (Act No. 23 of 2012) established the Bangladesh Competition Commission under section 5. It prohibits anti-competitive agreements in section 15, abuse of a dominant position in section 16 and anti-competitive combinations in section 21, and section 22 extends the Commission's reach to conduct outside Bangladesh that affects the domestic market.[10] For commercial contracts, section 15 is the provision that matters: exclusivity, resale price controls and territorial restrictions in distribution and supply agreements must be tested against it. Enforcement practice is covered in our guide to competition law in Bangladesh, and transaction filings in our note on merger notification.

Consumer protection

The Consumer Rights Protection Act 2009 (Act No. 26 of 2009) created a Directorate with powers to receive complaints, prosecute listed offences and impose administrative penalties, and it adds a separate chapter of civil proceedings and remedies.[11] Any business that sells to consumers, online or offline, is exposed to it. Bangladesh has no single product liability statute, so liability for defective goods is assembled from the consumer law, the Sale of Goods Act and sector regulation, as our guide to product liability law in Bangladesh explains. Online sellers should read our note on e-commerce law.

Intellectual property

Trademarks, copyright, patents, industrial designs and geographical indications each have their own statute, administered mainly by the Department of Patents, Designs and Trademarks and the Copyright Office. The most recent overhaul was the Bangladesh Patent Act 2023, Act No. 53 of 2023.[12] Disputes about rights under the trademark, copyright, patent, industrial design and geographical indication laws are themselves a listed category under the Commercial Courts Act.[8] Registration strategy and enforcement are set out in our guide to intellectual property law in Bangladesh.

Data, investment and the regulatory overlay

Two 2026 statutes now sit across most commercial relationships. The Personal Data Protection Act 2026, Act No. 63 of 2026, is deemed in force from 6 November 2025, requires a lawful basis such as consent or contractual necessity for processing, makes a data fiduciary responsible for its processors and reaches processing outside Bangladesh that targets people in Bangladesh; section 23 and sections 31 to 35 take effect later, by notification.[13] The Invest Bangladesh Act 2026, Act No. 104 of 2026, established the Invest Bangladesh Authority and came into force on 20 August 2026.[14] Our guides to foreign investment law and data protection law cover the wider overlay.

Business laws every entrepreneur in Bangladesh should know

Founders and first-time investors rarely need every statute on the map at once. They need the right ones in the right order. In practice, commercial law in Bangladesh reaches a new business in five stages.

Choosing the vehicle

The first decision is the legal form: sole proprietorship, partnership firm, one person company, private limited company or, for a foreign parent, a subsidiary or branch. The choice decides liability, signing authority and investor exit. Partners who do not register their firm give up the right to sue on its contracts.[3] Our guides to types of companies in Bangladesh and startup law in Bangladesh compare the options.

Licences and registrations

Before trading, a business typically needs a trade licence from the local authority, tax and VAT registration and, depending on the activity, sector licences, factory, fire or environmental approvals and import or export registration. Operating without a required licence can make contracts hard to enforce and expose directors to penalties. The sequence is set out in our guide to business licences in Bangladesh.

People and data

Employment relationships are governed by the Bangladesh Labour Act 2006, as substantially amended in 2026, and by the employment contract. Outsourced staffing does not remove labour law risk; it relocates it to the contractor relationship, which must be documented accordingly. Customer and employee data now falls under the Personal Data Protection Act 2026.[13] Our guide to labour law in Bangladesh covers the employment side.

Getting paid

Credit terms, security and collection drive cash flow. A business that sells on credit should know how the Sale of Goods Act allocates title and risk, when a guarantee binds a surety under the Contract Act, and how a dishonoured cheque is pursued.[1] [2] [5]

Protecting what the business owns

Register trademarks early, take written assignments of IP created by founders, staff and contractors, and sign confidentiality agreements before disclosure. These cheap steps later decide whether a dispute can be won.

Key commercial contracts and the law that governs them

Most of the money in a Bangladeshi business moves through a small number of contract types. The Commercial Courts Act 2026 names nearly all of them: franchising agreements, distribution and licensing agreements, management and consultancy agreements, joint venture and shareholder agreements, subscription and investment agreements in services including outsourcing, commercial agency, partnership agreements, technology development agreements, sale of goods and services, and agency contracts.[8] Clause-by-clause drafting guidance is in our guide to commercial agreements in Bangladesh; this section maps the legal regime behind each type.

Agency and distribution

Agency is governed by Chapter X of the Contract Act, sections 182 to 238, which covers the creation of agency, sub-agents, ratification, revocation of authority, the agent's duties to the principal and the effect of agency on contracts with third parties.[1] Bangladesh has no statute that gives commercial agents or distributors a special right to termination compensation. Their protection is whatever the contract provides, together with the general law of damages and notice.

The real risks lie elsewhere. Exclusive territory, minimum resale prices and non-compete obligations must survive both the restraint of trade rule in the Contract Act and section 15 of the Competition Act.[10] A distributor that holds stock as owner is a buyer under the Sale of Goods Act; an agent that sells in the principal's name is not.[2] That distinction drives tax, title, liability to customers and what happens to stock on termination, so the agreement should state which model the parties intend.

Supply and sale of goods

Supply contracts sit on the Sale of Goods Act default rules: implied conditions as to description and quality, the passing of property and risk, the unpaid seller's lien and stoppage rights, and remedies for non-delivery or non-acceptance.[2] Well-drafted supply agreements override those defaults expressly. They fix specifications and acceptance testing, Incoterms and delivery point, when title passes, how defects are notified and remedied, price adjustment, and an exclusive and capped liability regime. For cross-border supply, import permissions and payment through an authorised dealer bank are conditions of performance, not formalities.

Franchise and licensing

There is no franchise statute in Bangladesh and no pre-contract disclosure regime. A franchise is a bundle of a trademark licence, a know-how and copyright licence, a supply arrangement and a set of operating standards, each governed by its own law. Three issues decide whether it works. First, the brand must be registered in Bangladesh, or the licensor's rights depend on passing off. Second, royalty and franchise fee remittances abroad are subject to Bangladesh Bank foreign exchange rules and withholding tax, so the fee structure must be one the local bank can actually pay. Third, post-termination restraints must be drafted narrowly enough to survive the Contract Act.[1] Franchising, distribution and licensing agreements are each listed categories under the Commercial Courts Act.[8]

Joint ventures

A joint venture may be purely contractual, a partnership firm or, most often, a jointly owned company. In a company structure the shareholders' agreement and the articles must say the same thing, because the agreement binds only the parties who sign it while the articles bind the company. Joint venture and shareholder agreements are separate listed categories under the Commercial Courts Act, which matters for interim relief in a deadlock.[8] Structuring, foreign ownership, exit and tax are covered in our guide to joint ventures in Bangladesh.

Outsourcing and commercial transactions

Outsourcing covers business process, IT-enabled services, facilities management, logistics and contract manufacturing. The Commercial Courts Act expressly lists subscription and investment agreements in services, including outsourcing.[8] Four legal issues recur. Service levels and service credits must be drafted as measurable obligations with a clear remedy. Where personal data is transferred, the customer is a data fiduciary responsible for the outsourcer as its processor under the Personal Data Protection Act 2026.[13] Where the provider supplies workers on site, labour law questions about who is the employer must be answered in the contract. And exit assistance, data return and transfer of know-how must be agreed at the start, because they are rarely agreed amicably at the end.

Dispute resolution under commercial law in Bangladesh

Choosing the forum is the most consequential drafting decision in a Bangladeshi commercial contract, and the choice is no longer simply between civil courts and arbitration. The main forums are below.

Commercial Courts

Where a dispute falls within the twenty-four categories and the parties have not agreed to arbitrate, the claim goes to a Commercial Court. Section 7 requires pre-suit mediation where government rules prescribing the procedure exist at the date of filing, but not where urgent interim relief is sought. During a suit the court may refer the parties to mediation with their consent, to be completed within thirty days and extendable by a further thirty, and a signed settlement is enforceable as a decree.[8] Unless the parties agree otherwise, post-judgment interest runs at 2 per cent above the Bangladesh Bank rate, and an aggrieved party may appeal or seek revision in the High Court Division within sixty days.[8]

Arbitration

An arbitration clause takes a dispute out of the courts, except for the supervisory and supportive powers the Arbitration Act preserves.[6] Arbitration remains the preferred route for cross-border contracts because a Bangladesh-seated award is enforced as a decree and a foreign award can be recognised under sections 45 and 46.[6] Arbitration-related matters, including applications concerning arbitration agreements and awards, are themselves a listed category under the Commercial Courts Act.[8] Cost remains a concern: in May 2026 the Law Minister said arbitrator fees were high enough to deter ordinary businesses and that the Arbitration Act's limitations could be fixed.[7] Our comparison of arbitration and litigation in Bangladesh sets out the trade-offs.

Loan recovery, cheques and regulators

Bank and financial institution recovery claims go to the Artha Rin Adalat and are excluded from the Commercial Courts.[8] A dishonoured cheque gives the holder a criminal route that runs in parallel with any civil claim, and the 2026 amendment now sends higher-value cheque cases to the Joint Sessions Judge.[5] Competition complaints go to the Competition Commission, and consumer complaints to the consumer protection Directorate.[10] [11] A creditor will often pursue more than one route at once, and the strategy should be mapped before the first notice is sent. Our overview of alternative dispute resolution in Bangladesh explains where negotiation and mediation fit.

Why speed still matters

At a May 2026 seminar a former Dhaka Chamber president cited a World Bank figure of 1,442 days on average to enforce a contract in Bangladesh.[7] Until the Commercial Courts prove they can cut that figure, build security into the contract, such as guarantees, retention, advance payment and escrow, rather than rely on litigation to deliver payment.

Commercial law in Bangladesh: the 2026 reforms

The interim government governed largely by ordinance from August 2024 until the February 2026 election. The new Parliament then converted many of those ordinances into Acts, while starting its own reforms. The changes that matter most to business are these.

• Commercial Courts Act 2026: replaced the January 2026 Ordinance, took effect retrospectively from 1 January 2026 and created a dedicated forum, timetable and interest rule for business disputes.[8] Seventy-five courts were notified in February 2026.[9]
• Negotiable Instruments (Amendment) Act 2026: moved trials of cheque offences above Tk 5 lakh to the Joint Sessions Judge from 10 April 2026, replacing Ordinance No. 34 of 2026.[5]
• Personal Data Protection Act 2026: created Bangladesh's first general data protection regime, with consent, processor, security, retention and breach notification obligations.[13]
• Invest Bangladesh Act 2026: created the Invest Bangladesh Authority, with a governing board chaired by the Prime Minister or a nominee, in force from 20 August 2026.[14]
• Companies Act draft Third Amendment: would introduce beneficial-ownership declarations under a new section 34A, with a fine of up to Tk 50,000 for failure, electronic registers, a company secretary requirement for large companies and higher penalties; as at August 2026 it was still a draft.[4]
• Further changes signalled: in May 2026 Law Minister Md Asaduzzaman said the Commercial Courts Act had been passed in haste, that issues important to international investors, including regulatory, tax, labour and criminal matters, were largely absent from it, and that the government would re-examine it.[7]

Commercial law in Bangladesh is therefore moving on two tracks: new statutes that are already in force, and announced revisions to those statutes. Contracts signed in 2026 should be drafted to work under both, for example by choosing a forum clause that remains effective if the jurisdiction or rules of the Commercial Courts change.

Building a compliant commercial framework

A business entering or expanding in Bangladesh can manage most legal risk with a disciplined sequence. The steps below are the ones TRW uses when building a commercial framework for a client.

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Common mistakes to avoid

• Using foreign templates unchanged: clauses drafted for English or Singapore law may conflict with the Contract Act, stamp duty rules or foreign exchange controls.
• Ignoring registration: an unregistered partnership firm cannot sue on its contracts, and unregistered IP is far harder to enforce.[3]
• Over-reaching restraints: broad exclusivity and non-compete clauses invite challenge under the Contract Act and the Competition Act.[10]
• Treating dispute clauses as boilerplate: an ambiguous clause invites a jurisdiction fight before the merits are ever reached.
• Relying on judgment alone: security and documentation decide whether a claim is paid; the judgment only confirms it is owed.

The role of commercial lawyers and commercial law firms

A commercial lawyer's value lies less in knowing the statutes than in knowing how they interact in practice: which approvals bind, how authorised dealer banks read foreign exchange rules, how courts treat a clause and how long each step takes. The work divides into three areas.

Transactional advice

Structuring the business, drafting the agreements discussed above, due diligence and the approvals that make a transaction performable, including aligning a governing-law clause chosen abroad with what Bangladeshi courts and banks will accept.

Compliance and governance

Keeping filings and licences current, testing distribution and pricing against the Competition Act, and preparing for new obligations such as the proposed beneficial-ownership regime.[4] [10]

Disputes and enforcement

Choosing between Commercial Courts, arbitration, cheque proceedings and regulatory complaints, securing interim relief and enforcing against assets. The best results come when the team that drafted the contract knows how it will be litigated.

When selecting a commercial law firm, ask for sector experience, fluency in Bangla and English, familiarity with the regulators involved and a clear view of fees and timelines. TRW's corporate and commercial advisory practice works across all three areas.

What to watch through 2027

Four developments will shape commercial law in Bangladesh over the next year. First, the rules under the Commercial Courts Act, including those that would activate mandatory pre-suit mediation, and any amendments following the Law Minister's May 2026 review.[7] [8] Second, the promised reform of the Arbitration Act 2001, which business groups and the Bangladesh International Arbitration Centre have pressed for.[7] Third, the enactment and commencement of the Companies Act amendments, particularly beneficial-ownership disclosure.[4] Fourth, the deferred provisions of the Personal Data Protection Act 2026 and the regulations that will give it operational detail.[13]

Reviewing the dispute, data, competition and payment clauses in existing master agreements now captures most of the benefit of the 2026 reforms. TRW advises on commercial contracts, transactions and disputes across Bangladesh; explore our joint ventures and strategic alliances practice or contact TRW to discuss your framework.

Frequently asked questions

What are the main sources of commercial law in Bangladesh?

The Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Negotiable Instruments Act 1881, Companies Act 1994, Arbitration Act 2001, Competition Act 2012, Consumer Rights Protection Act 2009, the intellectual property statutes and the Commercial Courts Act 2026, together with case law of the Supreme Court.[1] [8]

Is the Contract Act 1872 still in force?

Yes. It remains the general law of contract, including indemnity, guarantee, bailment, pledge and agency. Its chapters on sale of goods and partnership were repealed and replaced by separate Acts.[1]

Which court hears commercial disputes in Bangladesh?

Disputes in the twenty-four categories listed in the Commercial Courts Act 2026 go to Commercial Courts, unless they fall within the High Court Division's original jurisdiction or the Artha Rin Adalat, or the parties have agreed to arbitrate.[8]

Does Bangladesh have a franchise law?

No. Franchises are governed by contract, intellectual property and foreign exchange law. Franchising agreements are, however, a listed category of commercial dispute under the Commercial Courts Act 2026.[8]

Are commercial agents protected on termination?

There is no statutory termination indemnity. Agency is governed by sections 182 to 238 of the Contract Act, and the agent's protection depends on the contract and the general law of damages.[1]

Does a partnership firm have to be registered?

Registration is optional, but under section 69 of the Partnership Act an unregistered firm cannot sue third parties to enforce its contracts.[3]

Can exclusive distribution clauses breach competition law?

They can. Section 15 of the Competition Act 2012 prohibits agreements that adversely affect competition, so exclusivity, resale price and territorial terms should be reviewed before signature.[10]

What changed for cheque cases in 2026?

The Negotiable Instruments (Amendment) Act 2026 provides that cheque offences involving more than Tk 5 lakh are tried by a Joint Sessions Judge or Metropolitan Joint Sessions Judge.[5]

Does the new data protection law affect commercial contracts?

Yes. The Personal Data Protection Act 2026 makes a data fiduciary responsible for its processors, so outsourcing, IT and marketing contracts that involve personal data need data processing terms.[13]

How long does it take to appeal a Commercial Court judgment?

An appeal or revision must be filed in the High Court Division within sixty days of the Commercial Court's judgment or order.[8]