Procedure for Company Registration & Incorporation in Bhutan
Procedures for Company Registration and Incorporation in Bhutan:
Companies are registered under the Companies Act of Kingdom of Bhutan, 2000. Only limited companies are formed under the aforementioned Act. The procedures for registration of company may be divided into three stages:
1. Applying for name availability
2. Preparation of Articles of Incorporation.
3. Filing the documents with the Registrar of Companies.
1. Applying for name availability:
The promoter fill up the application form available with the Ministry of Trade & Industry (MTI). The promoter has to provide three possible names for the business in preference order;
The Intellectual Property Division, MTI will cross check to see if there is any duplication of the name. If the name is already registered, the second name as per the preference will be endorsed and given to the promoter.
Once the name is approved and endorsed by IPD, the promoter can either seek name approval from the Registrar of the Companies right away or do it later at the time of submitting the Articles of Incorporation.
Incase the promoter seeks name approval from the Registrar of the Companies, the latter cross checks the name provided in the application with those already registered to see if there is any duplication of name.
2. Preparation of Articles of Incorporation:
Once the name availability comes through the promoter prepares the Articles of Incorporation as set out in Schedule I of the Companies Act of the Kingdom of Bhutan, 2000.
The Office of the Registrar receives the Articles of Incorporation (AOI) and scrutinizes it. The Following documents must be attached with the AOI:
a. Name availability form;
b. Consent to act as Director form (Annexure-2) duly filled in by all the directors;
c. Security clearance form Royal Bhutan Police, for all the directors;
d. Xerox copy of citizenship ID card of all the directors;
e. Declaration of Compliance Form (Annexure-3) signed by any one of the directors.
f. Project approval from PDSD, MTI.
Incase the AOI is not proper or any of the documents is missing, the promoter will have to redo the AOI.
3. Filing the documents with the Office of Registrar:
Once the AOI is approved, the Registrar of Companies will fill in Schedule V (Certificate of Incorporation) (Annexure-4) of the Companies Act of the Kingdom of Bhutan, 2000;
The Promoter then receives the Certificate of Incorporation signed by the Registrar of Companies. The Promoter also receives:
a. A copy of AOI;
b. Letter of Incorporation.
The Office of the Registrar then sends the letter of Incorporation of the Company to:
a. Regional Director, respective RTIO
c. Royal Audit Authority
d. PDSD, MTI
The concerned officer at the Office of Registrar will punch in all the information of the company in CREG (database). and a new file in the name of the company will be opened at the office of the Registrar.
Other mandatory procedures for getting the company registered, but not under the jurisdiction of the Office of the Registrar are:
1. Project approval by Project Development & Service Division, Ministry of Trade & Industry (before registration);
2. Environment Clearance Certificate from National Environment Commission (before registration)
3. Getting license from Regional Trade & Industry Office (after registration)
4. Security clearance from Royal Bhutan Police (before registration)
Procedures for Company Registration:
1. Promoter prepare project proposal. Submit the project proposal to Project Development and Service Division;
2. Concerned officer scrutinize the project proposal;
a. If the project proposal is accepted, go to procedure 3.
b. If the project proposal is not approved, go to procedure 7(b).
3. PDSD sends a letter (along with a copy of project proposal) to National Environment Commission for the issuance of Environment Clearance Certificate for the Project;
4. Environment Commission scrutinizes the project;
5. PDSD receives ECC (if approved) (or) letter of non approval (if the project is not approved);
a. If the project is issued with the ECC, go to procedure 7.
b. If the project is not issued ECC, go to procedure 7 (b).
6. Discuss the matter with Director General, Department of Industry, MTI;
7. Issue the "Letter of Approval/Non-Approval" to the proposed project the Promoter.
Note: The average time involved for Procedure 1 takes 1 day. Procedure 2 takes 2 days for small projects and 14 days for big projects. Procedure 3, 5, 6 and 7 takes 1 day each. Total average time involved is 19 days for big projects and 7 days for small projects.