Forming a partnership in Bangladesh is a straightforward process, but it involves several legal and regulatory steps to ensure the business is legitimate and protected. Below is a comprehensive breakdown of each step involved in setting up a partnership business.

Step 1: Choose a Business Name

• Uniqueness: Select a name that is unique and not similar to any existing business entities. This avoids confusion and potential legal disputes.
• Legal Compliance: Ensure the chosen name does not infringe on any registered trademarks under the Bangladesh Trade Marks Act. Conduct a search through the Department of Patents, Designs and Trademarks (DPDT) or consult legal professionals to verify availability.
• Relevance: The name should reflect the nature of the business and be professional and easy to remember.

Step 2: Draft a Partnership Deed

A Partnership Deed is a legal agreement between all partners outlining the rights, responsibilities, and obligations of each party. It is a crucial document that governs the functioning of the business.

Key Clauses to Include:

• Name and address of the partnership firm
• Name, address, and occupation of each partner
• Nature and scope of the business
• Capital contribution of each partner
• Profit and loss sharing ratio
• Roles, duties, and responsibilities of each partner
• Decision-making process and authority
• Dispute resolution mechanism
• Rules for admission, retirement, or expulsion of a partner
• Procedure for dissolution of the firm

It is advisable to draft the deed with the assistance of a legal expert to ensure all aspects are properly covered.

Step 3: Pay Stamp Duty and Notarization

• The deed must be printed on non-judicial stamp paper of the appropriate value.
• The printed deed must be notarized to validate the agreement.
• Once signed and notarized, the deed becomes legally valid.

Step 4: Register the Partnership Firm (Optional but Highly Recommended)

Although not legally mandatory, registering the partnership firm with the Registrar of Joint Stock Companies and Firms (RJSC) provides legal recognition and protection.

Documents Required:

• Application form
• Duly signed and stamped Partnership Deed
• Copy of NID or passport of all partners
• Proof of business address (e.g., rental agreement or utility bill)
• Passport-sized photographs of partners
• Bank statement (if required)
• Payment of the registration fee

Benefits of Registration:

• Legal protection for the business name
• Ability to file lawsuits in the firm’s name
• Enhanced credibility with clients and banks

Step 5: Obtain a Trade License

Every business in Bangladesh must obtain a Trade License from the local City Corporation, Municipality, or Union Parishad.

Documents Required:

• Partnership Deed
• National ID of the partners
• Rental agreement or ownership document of the business premises
• Application form from the local authority
• Trade license fee

The license must be renewed annually.

Step 6: Register for Taxes (TIN & VAT)

All businesses are required to comply with tax regulations administered by the National Board of Revenue (NBR).

Taxpayer Identification Number (TIN):

• Mandatory for all partners and the firm
• Apply online via the NBR portal or visit the local tax office

VAT Registration (if applicable):

• Required if the business reaches a certain revenue threshold
• Some industries may be exempt or under turnover tax scheme
• Register online via the VAT Online System (VOS)

Step 7: Open a Bank Account

To manage the financial operations of the firm, open a partnership bank account in the firm’s name.

Required Documents:

• Copy of the Partnership Deed
• Trade License
• TIN Certificate
• NID/Passport of partners
• Partnership registration certificate (if registered)
• Partnership resolution (some banks may request this)

Choose a bank that supports business accounts and offers online banking for convenience.

Step 8: Comply with Other Business Regulations

Depending on the nature of your business, additional permits or licenses may be required.

Examples:

• Food License (if operating a restaurant, catering, or food manufacturing business)
• Environmental Clearance Certificate (for industries affecting the environment)
• Import/Export Registration (if involved in cross-border trade)

Labor Laws:

• Maintain employment contracts
• Comply with minimum wage laws
• Ensure workplace safety and employee welfare

Final Notes

• Registration is Optional but Strongly Advised: While not mandatory, registering your partnership firm ensures legal recognition, protection, and easier access to loans and government support.
• Seek Professional Help: It’s advisable to consult a lawyer or business consultant for legal drafting, tax filing, and registration processes to avoid costly mistakes.

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