A company limited by shares can increase its authorised capital if its articles allow it, by a resolution passed at a general meeting (Companies Act 1994, section 53). It then files a notice of the increase with RJSC on Form IV within 15 days of the resolution (section 56). If the change is made by special resolution, a copy goes to RJSC on Form VIII within 15 days too (section 88). RJSC charges Tk 80 for each lakh of new capital between Tk 10 lakh and Tk 50 lakh, and Tk 130 per lakh above Tk 50 lakh, plus Tk 200 per document filed.
Authorised capital vs paid-up capital
Authorised capital (often spelled "authorized capital") is the ceiling written in the memorandum of association: the most share capital the company may issue. Paid-up capital is what shareholders have actually subscribed and paid for. New shares can only be issued inside the authorised limit (section 155 deals with directors raising subscribed capital within the limit of the authorised capital).
So if a company with Tk 10 lakh authorised capital has already issued all of it, it must raise the ceiling before it can issue new shares to anyone, including a foreign investor.
What the law requires
| Requirement | Rule | Source |
|---|---|---|
| Power in the articles | The company may increase its share capital by issuing new shares only if its articles authorise it | s. 53(1)(a) |
| General meeting | The power is used only in a general meeting, not by the board alone | s. 53(2) |
| Notice to RJSC (Form IV) | Within 15 days of the resolution, giving the classes of shares affected and the terms of issue | s. 56(1), (2) |
| Special resolution copy (Form VIII) | If a special resolution is passed, a certified copy within 15 days | s. 88(1) |
| Special resolution | Three-quarters majority at a general meeting called with at least 21 days' notice, or shorter notice if every member entitled to attend and vote agrees | s. 87(2) |
Section 53 does not say whether an ordinary or special resolution is needed; your articles do. If the articles themselves state the authorised capital figure, changing that clause is an alteration of the articles, which needs a special resolution (section 20). Read the capital clause of both the memorandum and the articles before you draft anything.
Step by step
- Check the articlesConfirm the articles give the power to increase capital and say which type of resolution is needed. Decide the new figure with room for the next round, not just this one.
- Board meetingThe board approves the proposal and calls a general meeting, usually an extraordinary general meeting (EGM).
- Send noticeGive members the notice period the articles require, or 21 days for a special resolution unless all members agree to shorter notice.
- Pass the resolutionMembers pass the resolution at the general meeting. Minute it and have the minutes signed.
- File on the RJSC portalWithin 15 days, file Form IV (notice of increase) and, if there was a special resolution, Form VIII with a certified copy, through app.roc.gov.bd. Pay the fees shown by the portal.
- Update your copiesOnce RJSC records the increase, update the memorandum and articles you keep and hand out. Every copy of the articles issued after a special resolution must include or attach that resolution (section 88(2)).
- Then allot sharesRaising the ceiling does not issue any shares. The allotment and its Form XV come next.
RJSC fees for an increase
The fee schedule in the Ministry of Commerce notification effective 1 July 2023 charges for authorised capital in slabs. For an increase after incorporation, the fee is charged at the same rates as if the extra capital had been part of the original capital.
| Authorised capital band | Fee |
|---|---|
| Up to Tk 10 lakh | Nil |
| Above Tk 10 lakh, up to Tk 50 lakh | Tk 80 per lakh or part of a lakh |
| Above Tk 50 lakh | Tk 130 per lakh or part of a lakh |
| Each document filed on time (Form IV, Form VIII) | Tk 200 |
Worked examples of the capital fee, before the document fees:
| Increase | How it is worked out | Capital fee |
|---|---|---|
| Tk 10 lakh to Tk 50 lakh | 40 lakh × Tk 80 | Tk 3,200 |
| Tk 50 lakh to Tk 1 crore | 50 lakh × Tk 130 | Tk 6,500 |
| Tk 10 lakh to Tk 1 crore | 40 lakh × Tk 80 + 50 lakh × Tk 130 | Tk 9,700 |
Use RJSC's fee calculator for your own figures before paying, because stamp duty or a later gazette can change the total.
If you file late
- RJSC late fee. A document filed after its deadline costs Tk 500 for each year or part of a year, up to three years, and Tk 700 a year after that, instead of Tk 200.
- Fines under the Act. Missing the Form IV deadline can cost the company, and each officer who knowingly allowed it, up to Tk 200 a day (section 56(3)). Not filing a special resolution can cost up to Tk 100 a day (section 88(4)).
The bigger cost is delay. Until the increase is on record, new shares above the old ceiling can't be issued, and the investor's money waits.
Before a foreign investment
An investor's lawyers check authorised capital early, alongside the last Schedule X and the share register. Raise the ceiling before the money is sent, not after. The order is: increase authorised capital, receive the remittance and the encashment certificate, allot the shares, then file Form XV. Our FDI transaction support page sets out the whole chain.
Frequently asked questions
Which form is used to increase authorised capital in Bangladesh?
Form IV, the notice of increase of share capital, filed with RJSC within 15 days of the resolution under section 56 of the Companies Act 1994. If a special resolution was passed, Form VIII with a certified copy is filed within the same 15 days.
Can the board increase authorised capital on its own?
No. Section 53(2) says the power can only be used in a general meeting, and the articles must allow it. The board proposes the increase and calls the meeting.
How much does RJSC charge to increase authorised capital?
Under the fee notification effective 1 July 2023, nothing on capital up to Tk 10 lakh, Tk 80 per lakh between Tk 10 lakh and Tk 50 lakh, and Tk 130 per lakh above Tk 50 lakh, worked out as if the increase had been in the original capital. Each document filed on time costs Tk 200.
Does increasing authorised capital mean shareholders have to pay more?
No. It only raises the ceiling. Shareholders pay when new shares are actually allotted to them, which is a separate step with its own return, Form XV.
What is the deadline to file Form IV?
Within 15 days of the resolution to increase capital. Missing it can bring a fine of up to Tk 200 a day under section 56(3), and RJSC's late filing fee applies.
Sources
- Companies Act 1994 (Act No. 18 of 1994), Laws of Bangladesh. Sections 20, 53, 56, 87, 88, 155.
- Return filing: returns to be submitted (Form IV, Form VIII), RJSC.
- Fee notification for RJSC services, Ministry of Commerce, 8 June 2023, Bangladesh Gazette 9 July 2023, effective 1 July 2023 (Companies Act Schedule 2 fees, including increased capital).
- Registration fees (authorised capital slabs), RJSC.
- Fees for return filing (on-time and late fees), RJSC, updated July 2023.
- RJSC fee calculator, app.roc.gov.bd.
General information, not legal or tax advice. Fees and procedures change; check the current gazette and your articles, or ask us before you file.