Winding Up a Company in Bangladesh

Winding up is the formal legal procedure for ending a company's existence in Bangladesh, and the route chosen at the start determines cost, duration and who controls the process. A solvent company closing in an orderly way follows a very different path from one facing creditor petitions in the High Court Division.

This page explains the legal modes of winding up under the Companies Act 1994, the role of the liquidator and the key documents. It is aimed at directors, shareholders and foreign parents evaluating their options. For the practical business close-down checklist, see company dissolution; for realising assets and settling creditors, see liquidating a company.

Modes of winding up under the Companies Act 1994

• Members' voluntary winding up: for a solvent company; directors make a declaration of solvency and shareholders pass a special resolution
• Creditors' voluntary winding up: where the company cannot pay its debts in full; creditors take a central role, including in appointing the liquidator
• Winding up subject to supervision of the court: a voluntary winding up that the court places under its supervision
• Compulsory winding up by the court: on a petition to the High Court Division, for example by a creditor on grounds of inability to pay debts
• Striking off a defunct company: a separate RJSC procedure for companies not carrying on business, distinct from winding up

Members' voluntary winding up: the usual route for solvent companies

Most planned closures, including dormant subsidiaries of foreign groups, use a members' voluntary winding up. The directors first investigate the company's affairs and make a statutory declaration that it can pay its debts in full within the period allowed by the Act. A general meeting then passes a special resolution to wind up and appoints a liquidator, and notice is published and filed with RJSC. From the resolution, the company stops carrying on business except as needed to wind up, and the directors' powers largely pass to the liquidator.

The liquidator's role

The liquidator takes control of the company's assets and records, collects receivables, sells assets, settles creditors in the order of priority set by law, and distributes any surplus to shareholders. The liquidator also deals with NBR and the VAT Commissionerate to settle tax liabilities and cancel registrations, keeps accounts of the winding up, and calls the final meeting. After the final meeting, the liquidator files the account and return with RJSC, and the company is deemed dissolved after the statutory period.

Tax, VAT and regulatory items in a winding up

• Final income tax return and settlement of any assessment with the Taxes Circle
• Withholding tax and VDS obligations brought up to date, with final returns filed
• BIN deregistration with the VAT Commissionerate after final Mushak 9.1 return
• Surrender of trade licence, IRC/ERC and sector licences
• Employee settlements under the Bangladesh Labour Act 2006, including notice and gratuity or other dues
• For foreign shareholders, repatriation of surplus through the authorised dealer bank under Bangladesh Bank rules, and BIDA notification where registered

Pitfalls that extend a winding up

• Passing the winding-up resolution before tax and VAT positions are understood
• Unfiled RJSC returns from earlier years, which must be regularised first
• Unresolved tax audits or appeals that prevent final settlement
• Directors signing a declaration of solvency without proper investigation
• Abandoning the company instead of winding it up, leaving directors exposed to continuing defaults

How the process works

1. Feasibility reviewWe review solvency, pending tax matters, contracts, employees and RJSC filing status to choose the right route.
2. Pre-closure clean-upOverdue RJSC returns, tax and VAT filings are regularised and outstanding receivables and payables addressed.
3. Resolutions and declarationWe prepare the declaration of solvency, board and general meeting resolutions, and notices for publication and filing.
4. Liquidation phaseSupporting the appointed liquidator, assets are realised, creditors and employees paid, and tax and VAT registrations closed.
5. Final meeting and filingThe liquidator's account is presented at the final meeting and the return is filed with RJSC.
6. DissolutionWe monitor until RJSC records the company as dissolved and confirm closure to shareholders and banks.

Typical timeline: A straightforward members' voluntary winding up of a solvent company with clean records commonly takes many months, often around a year or more, depending on tax clearance, asset realisation and RJSC processing; court-based winding up usually takes longer.

How Tax & VAT Associates helps

• Assessment of the appropriate winding-up mode or striking off option
• Regularisation of overdue RJSC, tax and VAT filings before the process starts
• Drafting of declaration of solvency, resolutions, notices and RJSC filings
• Support to the liquidator on tax returns, VAT deregistration and licence surrender
• Guidance on surplus repatriation to foreign shareholders through banking channels
• Coordination with lawyers where a court-supervised or compulsory winding up is involved

Frequently asked questions

Related services

Last reviewed: 6 October 2026. Bangladesh tax and regulatory rules change with each Finance Act, SRO and authority circular. This page is general guidance; confirm current requirements for your case before filing.