This guide provides information on registration of a sole proprietorship in Bangladesh. To learn about various types of business entities in Bangladesh, refer to start a business in Bangladesh.
A sole proprietorship is the simplest form of business structure in Bangladesh. However, it is suitable only for very small single-owner-type business that does not carry any risks. Unlike a private limited liability company, a sole proprietorship does not provide limited liability protection and your personal assets are not protected from business risks.
SOLE-PROPRIETORSHIP – KEY FACTS
- A sole proprietorship in Bangladesh does not constitute a separate legal entity therefore it is not distinct from the owner/ proprietor. The business owner is personally accountable for all liabilities incurred during the course of the business.
- Any Bangladeshi citizen of at least 18 years of age is eligible for a sole proprietorship.
- A local commercial address must be provided as the business address for the sole proprietorship.
- Profits of the sole proprietorship are treated as income of the individual who owns the entity, thus it is subjected to a tax rate as that of personal income.
- As a Bangladesh sole proprietorship is not a legal entity, it cannot register another business firm.
- Sole proprietorships do not need to audit their accounts as any profits will be taxed as personal taxes.
- Trade License is the basic requirement for proprietorship.
- Trade License needs to be renewed annually.
- Practically, a sole proprietorship is not an option for foreigners. Foreign business professionals should incorporate a private limited company instead. For further details about private limited companies, refer to company registration in Bangladesh guide.
DOCUMENTS REQUIRED AND REGISTRATION PROCEDURE
In order to register a sole proprietorship business in Bangladesh, the following documents/information are required:
- Proposed business name in Bangla
- Description of principal activities
- Local business address for the proposed business in any commercial area.
- Lease/Rent Agreement or title deed for the office address.
- Copy of National ID for the owner.