Source and currentness checkpoint
This existing guide is explanatory, not a consolidated Companies Act or RJSC procedure. Verify the operative Companies Act 1994 provision, the company's Articles, the current RJSC Form IV instructions and the current fee schedule before relying on a resolution threshold, filing day-count, fee or certificate consequence.
The official RJSC Form IV page currently labels the document “Notice of Increase Share Capital” and references section 56; the article therefore does not treat an older section reference, 15-day period or fixed fee as verified without checking the current Act and RJSC instructions. RJSC forms · Form IV record · RJSC fee schedule
Legal Framework for Authorized Capital Increase
Increasing the authorized share capital of a company in Bangladesh is a significant corporate action governed primarily by the Companies Act 1994. This process allows a company to issue more shares in the future, facilitating fundraising and expansion. Adherence to statutory procedures, including the filing of specific forms and payment of prescribed fees, is crucial for legal compliance.
| Step | Governing Authority/Statute | Relevant Section(s) | Key Requirement |
|---|---|---|---|
| 1. Board Meeting & Resolution | Companies Act 1994 | the current operative Companies Act/RJSC provision | Board resolution to propose increase in authorized capital. |
| 2. Extraordinary General Meeting (EGM) | Companies Act 1994 | the current operative Companies Act/RJSC provision | Shareholders pass a Special Resolution to increase authorized capital. |
| 3. Filing of Form IV | Companies Act 1994 | the current operative Companies Act/RJSC form provision | Notice of increase of share capital to be filed with RJSC. |
| 4. Payment of Stamping Fees | Companies Act 1994, Stamp Act 1899 | the current operative Companies Act/RJSC form provision, Schedule I of Stamp Act 1899 | Payment of prescribed fees to RJSC based on the increased capital amount. |
| 5. RJSC Approval & Record | Companies Act 1994 | the current operative Companies Act/RJSC record provision | RJSC registers the increase and issues a certificate. |
Detailed Procedure for Capital Increase
- Convene a Board Meeting: The Board of Directors must first pass a resolution proposing the increase in authorized share capital. This resolution should outline the new capital structure and the reasons for the increase.
- Convene an Extraordinary General Meeting (EGM): Following the Board's proposal, an EGM of shareholders must be called. At this meeting, a Special Resolution, requiring the applicable special-resolution majority under the current Companies Act and the company's Articles, must be passed to approve the alteration of the company's Memorandum of Association to reflect the increased authorized capital. This step must be mapped to the operative Companies Act provision and the current RJSC form instructions; the official Form IV record currently references section 56.
- Preparation of Form IV: Within the current statutory/RJSC filing window after the applicable resolution, the company must prepare Form IV, which is the 'Notice of increase of share capital'. This form must accurately state the amount of the increase, the new total authorized capital, and the date of the resolution.
- Execution of Form IV: Form IV must be properly executed by a director or the company secretary. It must be accompanied by a certified true copy of the Special Resolution passed at the EGM.
- Calculation and Payment of RJSC Stamping Fees: The stamping fees for increasing authorized capital are calculated based on the incremental amount of capital. These fees are prescribed under the Companies Act 1994 and further detailed in the Stamp Act 1899. The exact fee structure can vary, but the current RJSC fee schedule and capital band must be used; no percentage, minimum or maximum is universal. The fees must be paid to the RJSC through designated banks or online payment gateways.
- Filing with RJSC: The executed Form IV, along with the certified copy of the Special Resolution and proof of fee payment, must be filed with the Registrar of Joint Stock Companies and Firms (RJSC) within the current statutory deadline stated by the operative Companies Act and RJSC instruction of passing the Special Resolution, as per the current operative Companies Act/RJSC form provision of the Companies Act 1994.
- RJSC Scrutiny and Registration: The RJSC will scrutinize the submitted documents. If all requirements are met, the Registrar will register the increase and issue a certificate of alteration, thereby officially recognizing the new authorized capital. RJSC recording or acceptance is procedural evidence and should not be described as conclusive proof of every Companies Act requirement, as per the current operative Companies Act/RJSC record provision.
It is imperative for companies to ensure timely and accurate compliance with these steps to avoid penalties and ensure the legal validity of their capital structure.
Consult LegalBD for Corporate Compliance
Navigating corporate compliance in Bangladesh requires expert legal guidance. Our team at LegalBD specializes in company law, ensuring your authorized capital increase is handled efficiently and in full compliance with all statutory requirements.
Schedule a Scoping SessionFrequently Asked Questions
What is the statutory basis for increasing authorized capital in Bangladesh?
The statutory basis and form reference must be checked against the current consolidated Companies Act and RJSC instructions; the official Form IV record currently references section 56, so the older section 116 attribution is not treated as verified.
What form needs to be filed with RJSC for an authorized capital increase?
A company must file Form IV, which is the 'Notice of increase of share capital', with the Registrar of Joint Stock Companies and Firms (RJSC) within the current statutory deadline stated by the operative Companies Act and RJSC instruction of passing the special resolution, as per the current operative Companies Act/RJSC form provision of the Companies Act 1994.
What is the deadline for filing Form IV after the resolution is passed?
Form IV, along with a certified copy of the special resolution, must be filed with the RJSC within the current statutory deadline stated by the operative Companies Act and RJSC instruction after the passing of the resolution, as stipulated in the current operative Companies Act/RJSC form provision of the Companies Act 1994.
How are the stamping fees for authorized capital increase determined?
The stamping fees are determined based on the incremental amount of the authorized capital and are prescribed under the Companies Act 1994 and the Stamp Act 1899. The specific scale of fees is outlined in the relevant schedules of these Acts.
What should be verified after RJSC records the increase?
Confirm the current RJSC record, the company's updated constitutional documents, the applicable fee receipt and the operative Companies Act provision; an RJSC record should not be treated as conclusive proof of every statutory requirement.
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