Company Winding-Up in Bangladesh: Voluntary Liquidation, Court Petitions and RJSC Strike-Off
Closing a company properly is the only way to stop annual RJSC, tax and VAT obligations and to protect directors from later claims. There are two roads: a voluntary winding-up run by the members, or a winding-up ordered by the High Court Division.
- Solvent company: members' voluntary winding-up by special resolution
- Directors swear a declaration of solvency: all debts paid within 3 years
- Insolvent or deadlocked company: petition to the High Court Division
- Creditor's petition where the company cannot pay its debts (s.242)
- Typical voluntary timeline: 4–6 months or more
In this guide: Which route fits your company · Members' voluntary winding-up, step by step · Winding-up by the High Court Division · Directors' risks and common mistakes
The short answer
Under Part V of the Companies Act 1994 a company is wound up either voluntarily or by the court (s.234). A solvent company uses a members’ voluntary winding-up: the directors swear a declaration of solvency that all debts will be paid within three years, the members pass a special resolution at an EGM and appoint a liquidator, and the resolution is filed with the RJSC and published. An insolvent company goes into a creditors’ voluntary winding-up or a court winding-up. A winding-up petition to the High Court Division may be presented by the company, a creditor or a contributory (s.245) on grounds in s.241, the commonest being inability to pay debts (s.242) and the “just and equitable” ground, which covers deadlock and serious oppression.
Which route fits your company
- Dormant, solvent, owners agree: members’ voluntary winding-up.
- Debts exceed assets, owners agree: creditors’ voluntary winding-up, with a creditors’ meeting.
- Owners in deadlock, or a creditor unpaid: petition to the High Court Division.
- Never started trading: still requires a formal winding-up or strike-off with the RJSC; leaving it dormant keeps penalties running.
Members' voluntary winding-up, step by step
- Bring annual returns and audited accounts up to date; obtain tax and VAT positions.
- Board meeting: directors make a declaration of solvency on affidavit, attaching a statement of assets and liabilities, and file it with the RJSC before the EGM notice goes out.
- EGM: special resolution to wind up voluntarily and appoint a liquidator; file with the RJSC within 15 days and publish notice in the Gazette and a newspaper.
- Liquidator notifies the tax authority, realises assets, pays creditors in order (secured, employees, taxes, unsecured) and distributes the surplus to shareholders.
- Final meeting after Gazette notice; final accounts and return filed with the RJSC; the company is then dissolved and struck off.
Winding-up by the High Court Division
The petition goes to the Company Bench of the High Court Division. Grounds under s.241 include inability to pay debts, a special resolution for court winding-up, failure to start business within a year or suspension for a whole year, members falling below the legal minimum, and the just and equitable ground. Under s.242 a company is deemed unable to pay its debts where a creditor’s written demand remains unpaid for three weeks, a decree is unsatisfied, or inability is otherwise proved. The court may appoint a provisional liquidator, order a statement of affairs, stay suits against the company and, at the end, order dissolution. A creditor’s petition is often the strongest leverage for recovery, but the court will not let it be used to collect a genuinely disputed debt.
Directors' risks and common mistakes
- Signing a declaration of solvency without a real basis: personal liability and criminal exposure.
- Paying friendly creditors first on the eve of winding-up: the liquidator can claw it back as a fraudulent preference.
- Forgetting the bank, BIN, TIN and trade licence: close or surrender each one; a live BIN keeps VAT returns due.
- Walking away from a dormant company: RJSC penalties and director disqualification risk keep growing.
Clean up
Returns, accounts, tax and VAT up to date.
Declaration of solvency
Directors on affidavit, filed with the RJSC.
EGM and liquidator
Special resolution, filed in 15 days, published.
Liquidate and dissolve
Pay, distribute, final return, strike-off.
Common questions
How do I close a private limited company in Bangladesh?
Usually by a members' voluntary winding-up: the directors swear a declaration of solvency, the members pass a special resolution and appoint a liquidator, and after the assets are realised and debts paid the RJSC dissolves the company.
What is a declaration of solvency?
A sworn statement by the directors, with a statement of assets and liabilities, that the company will pay all its debts in full within three years. It is filed with the RJSC before the winding-up resolution.
Who can file a winding-up petition?
The company, a creditor or a contributory under section 245 of the Companies Act 1994, before the High Court Division.
When is a company deemed unable to pay its debts?
Under section 242, for example where a creditor's written demand remains unpaid for three weeks, a decree against the company is unsatisfied, or the court is otherwise satisfied it cannot pay.
Can a company be wound up because the shareholders are deadlocked?
Yes. Deadlock and serious oppression can found a petition on the just and equitable ground under section 241.
How long does voluntary winding-up take?
Typically four to six months, longer if assets are hard to sell or tax clearance is delayed.
Do I need tax clearance to close a company?
Yes. The liquidator must notify the tax authority and settle income tax and VAT positions; the BIN and TIN should be closed.
What happens to employees on winding-up?
Their unpaid wages and statutory dues rank ahead of unsecured creditors in the order of payment.
More in Courts, Cases & Money Claims
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Closing a company or chasing one that owes you?
We run voluntary liquidations end to end and file or defend winding-up petitions in the High Court Division. A written assessment costs nothing.
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