Partnership Deed and Firm Registration in Bangladesh: Clauses, Stamp Duty, RJSC Filing and the Cost of Not Registering

In this guide: What the deed must cover · Stamp duty and execution · Registering the firm at RJSC · Why an unregistered firm is a trap: section 69 · Changes, liability and the partnership-versus-company question

The short answer

Draft the deed, sign it on the right stamp paper before a notary public, then register the firm with RJSC. The deed names the firm, the partners and the business, states each partner’s capital and profit share, and sets the rules for management, drawings, borrowing, admission, retirement, expulsion, death and dissolution. Sign it on non-judicial stamp paper of Tk 2,000 (capital up to Tk 1 lakh) or Tk 4,000 (above) with two witnesses, and have it notarised. Then, on app.roc.gov.bd, apply for firm name clearance, upload the deed and the Form I application under s.58 — firm name, principal and other places of business, the date each partner joined, the duration of the firm, and each partner’s full name and permanent address — signed and verified by all partners, with their NID or passport, eTIN and photographs, and pay Tk 5,000 plus 15% VAT. The Registrar enters the firm in the Register of Firms (s.59) and issues the certificate of registration, in practice within one to three working days (the service standard is 30). After that: trade licence in the firm’s name, a firm eTIN, a bank account on the deed and certificate, and VAT registration if the business needs it.

What the deed must cover

The Act supplies default rules — equal profit shares (s.13(b)), no salary for partners, no interest on capital, every partner may take part in management (s.12) — and they are almost never what the partners mean. A workable deed therefore sets out, at least:

1. Firm name, nature and place of business, and the date of commencement; a name may not suggest government patronage (s.58(3)).
2. Capital contributed by each partner, whether interest is payable on it, and how further capital is called.
3. Profit and loss sharing ratio, and whether losses follow the same ratio.
4. Management: who is the managing partner, what needs all partners’ consent (borrowing above a figure, admitting a partner, selling the business, changing the nature of the business, s.12(c)), and the banking mandate.
5. Drawings and salary, if any, and the accounting year and audit.
6. Admission of a new partner (s.31 requires all partners’ consent unless the deed says otherwise), retirement (s.32), expulsion (only under an express power exercised in good faith, s.33) and the valuation of a departing partner’s share.
7. Death or insolvency: whether the firm continues with the survivors (otherwise s.42 dissolves it) and how the estate is paid out.
8. Non-compete during and after the partnership (ss.11(2), 36(2) allow reasonable restraints), and the treatment of goodwill (s.55).
9. Dissolution: the events, the notice period for a partnership at will (s.43), and the order of distribution under s.48.
10. Disputes: an arbitration clause under the Arbitration Act 2001, with a seat and a sole arbitrator, saves years.

A deed that answers these ten points is five or six pages. We draft them from the partners’ own answers rather than from a template, because the template clauses that circulate in Bangladesh were written for a different Act and routinely contradict ss.31–33.

Stamp duty and execution

Under Article 45 of Schedule I to the Stamp Act 1899, as substituted by the Finance Act 2022, the duty on an instrument of partnership is Tk 2,000 where the capital does not exceed Tk 1 lakh and Tk 4,000 in every other case; the instrument of dissolution carries Tk 2,000. Buy the non-judicial stamp paper from a licensed vendor in the names of the partners, print the deed on it with the continuation sheets, and have all partners sign every page before two witnesses. Notarisation is not a legal requirement but RJSC asks for a notarised copy and banks will not open an account without one. An under-stamped deed is inadmissible in evidence until the deficit and a penalty are paid (Stamp Act, s.35), which is the moment — the middle of a dispute — nobody wants to discover it. Partners abroad sign before the Bangladesh mission or a local notary with an apostille, or appoint an attorney by a registered power of attorney.

Registering the firm at RJSC

The Ministry of Commerce’s revision effective 1 July 2023 put the registration fee at Tk 5,000 plus VAT; before it the fee was Tk 1,000, and some websites still quote that or the old Tk 1,400 figure. Total government cost for a typical firm is therefore around Tk 6,000 in RJSC fees plus Tk 4,000 stamp duty. The Registrar of Firms is the same office as the companies registrar, and the divisional offices register firms for their divisions. Registration can be done at any time after formation, including after a dispute has begun, but s.69 bites on the date the suit is filed, so a firm that needs to sue must register first.

Why an unregistered firm is a trap: section 69

Section 69 does not make an unregistered partnership illegal; it makes it toothless. Three consequences: a partner cannot sue the firm or the other partners to enforce a right under the deed or the Act (s.69(1)); the firm cannot sue a third party to enforce a contract (s.69(2)); and the firm cannot plead set-off in a suit against it (s.69(3)). The bar applies unless the firm is registered and the person suing is shown in the Register as a partner, so a firm that registered but never recorded a later partner is still caught for that partner. The exceptions are narrow: suits for dissolution or for the accounts of a dissolved firm, claims of Tk 100 or less, and proceedings by the official assignee in insolvency. Third parties can always sue the firm. In practice this means a supplier who has delivered Tk 50 lakh of goods on credit to an unregistered firm can be sued by the firm’s customers but cannot himself sue them for the price; the only remedy is to register and then sue, and limitation keeps running meanwhile.

Changes, liability and the partnership-versus-company question

A change of partners, firm name or address is notified to the Registrar under ss.60–63 (recording fee Tk 1,000 since 2023), and a retiring partner remains liable for the firm’s debts until public notice of the retirement is given (s.32(3)). Every partner is jointly and severally liable for all the firm’s obligations with their personal assets (s.25) — the reason most trading businesses above a modest size incorporate instead. A partnership of more than 20 persons (10 for banking) is void under s.4 of the Companies Act and must be a company. Income tax: a firm is assessed as a separate entity on its own return, with partners’ shares then taxed in their hands with credit; firm registration under the Partnership Act is unrelated to registration with the NBR, which is done through the firm’s eTIN. For the choice between a partnership, a company and a proprietorship, see our structure comparison.