Individual vs. Company Trademark Registration in Bangladesh
Who Should Own Your Brand in Bangladesh? Individual vs. Company Trademark Registration
When you launch a business in Bangladesh, protecting your brand with a trademark under the Trademarks Act, 2009, is a critical early step1. But a seemingly simple question arises: Should the trademark be registered in your personal name or your corporate entity's name (like a Private Limited Company)?
This choice isn't just administrative; it has major legal, tax, and operational consequences as your business grows, takes on investors, or faces a financial challenge. Here's a comprehensive breakdown of the pros and cons of individual versus corporate trademark ownership in the Bangladeshi context.
Option 1: Individual Ownership (The Founder's Shield)
Some entrepreneurs choose to register their brand with the Department of Patents, Designs and Trademarks (DPDT) in their personal name.
The Advantages
- Maximum Control and Shielding: You personally retain control of the brand, regardless of what happens to the company. If the business entity is sold, restructured, or goes through financial distress or bankruptcy, personal trademark ownership may effectively shield the brand from being seized as a business asset by creditors.
- Flexible Use Across Ventures: If you plan to run multiple distinct businesses or service lines (e.g., as a consultant), you can easily license the single mark to different entities or projects you control without transferring ownership.
- Best for Solo Entrepreneurs: This is often preferred by solo entrepreneurs and those in high-liability industries who want to ring-fence the brand from potential business risk.
The Caveats in Bangladesh
- The Documentation Imperative: If your company uses your personally-owned mark, you absolutely must document this relationship. This requires a formal trademark license agreement between you (the owner) and the company (the user).
- Recording the License: For the license to be effective and binding under the Trademarks Act, it must be recorded with the DPDT.
- Inconsistency Risk: If all public use (on your website, packaging, social media) points to the business, but the DPDT registration is in your name, and you lack a proper license agreement, your ownership rights could be challenged in a dispute.
- Tax Complexity: If you license the mark to your company, the company pays you a monthly royalty. This royalty payment is subject to a 10% Withholding Tax (WHT) in Bangladesh, which adds complexity to bookkeeping and reporting.
Option 2: Corporate Ownership (The Business Asset)
This is the most common path: registering the trademark directly in the name of your Private Limited Company (or other legal entity) with the DPDT.
The Advantages
- Clean Alignment: The entity selling the goods or services is clearly the owner of the brand. This provides consistency across all legal and commercial documents.
- Simplifies Investment and Sale: The trademark becomes a clear, sellable asset of the company, which is essential for valuation when seeking investment or when you decide to sell the entire business.
- Professional Credibility: Corporate ownership enhances the business's perceived legitimacy, which is particularly beneficial in B2B transactions or when dealing with formal institutions.
- Streamlined Continuity: The mark remains with the company even if the founder is no longer actively involved, ensuring smooth operational continuity.
The Caveats in Bangladesh
Exposure to Business Liabilities: As a company asset, the trademark is exposed to the company’s financial liabilities. Creditors or bankruptcy trustees may seize it.
Dilution of Personal Control: When you bring in partners or investors, the trademark becomes a shared business asset. Your control over its use and transfer may be reduced.
Essential Entity Maintenance: If the company is administratively dissolved (e.g., for failure to file annual reports with the RJSC), the trademark’s ownership becomes unclear and vulnerable.
Foreign Expansion Complications: Licensing to international subsidiaries or joint ventures can become complicated, requiring complex inter-company agreements and potentially creating tax inefficiencies.
The Golden Rule Consistency is Non-Negotiable
No matter which structure you choose, your strategy is only as strong as its execution. In Bangladesh, and globally, inconsistency can kill your trademark rights.
- Match Reality to Record: The owner named on your DPDT application must be the party that is actually using or formally authorizing the use of the mark in commerce.
- Document Everything: If ownership and usage are separated (i.e., Individual owns, Company uses), a formal, valid, and preferably recorded license agreement is mandatory.
- Align Public Messaging: Ensure your contracts, website footers, and marketing materials don't create confusion about who owns the brand.
Final Takeaway
Choosing the right trademark owner requires you to balance control and flexibility (individual ownership) against operational simplicity and investability (corporate ownership). Consult with a legal professional to structure your ownership strategically, ensuring all licensing and tax implications are properly addressed before you file your application.