Legal business of Law

1. PRESENTATION ON
COMPANY ACT OF BANGLADESH
Presented By:
SABIHA SULTANA
ID:3-19-43-010
IMRUL RASHED
ID: 3-17-35-061
MIRZA ABU FAHIM
ID: 3-14-28-070
Department of Management
University of Dhaka
MBA(Evening) Program
COURSE TITLE: LEGAL ENVIRONMENT OF BUSINESS
COURSE CODE: EM-515

2. Background
• The first sub continental act, regarding companies was the joint
stock companies act of 1850.
• The act of 1850 was replaced by a new act 1857
• Before liberation the act of 1956 was popularly used which was
gazette passed by the Indians.
• After liberation Govt. of Bangladesh reform the companies act of
1956 which is now known as The Companies Act (Bangladesh) –
1994.

3. Definition
• The term company is used to describe an association of a number
of persons, formed the common purpose and they registered
according to the law relating to companies.
• Therefore a company is different from it’s members and the
individuals composing it.

4. Types of Company
• There are two types of company
1.Public Limited Company
2.Private Limited Company
 Public Limited Company can be divided in Four stages-
- Limited by Shares
- Limited by Guarantee
- Unlimited Company
- Statutory public Company

5. Formation of a Company
• Company formation is a long and complex procedure that includes
various significant steps.
• The process of company formation in Bangladesh is subject to the
Companies Act, 1994.
• The process of company formation is also known as incorporation
which means, forming a new corporation.
• A company can be formed when a group of person come together
to form an organization with lawful motive.

6. Basic Requirements to form a company
The purpose of forming a company must be lawful. Before a company
can be formed the following steps must be taken:
• The memo and the articles
• For paid-up capital or more than Rs.3 crore, sanction of the central govt. must
be obtained lender the capital issues (control) Act, 1956
• Registered in accordance with the provision of the companies Act, 1956 and
the certificate of incorporation
• Registered prospectus or the statement
• The minimum subscription and the allotment of shares must be made.
• Registered certificate for the commencement of business

7. Transformation
- Private company into a public company
1. Conversion
2. By resolution
3. By Default
4. By creating a statutory public company
5. Automatic conversion
- Public Company into a Private company
1. Conversion
2. Special Resolution
3. Confirmation by the court

8. Sections of Companies Act: Total 11 sections
Part-I: Contains the preliminary aspects of the act including the short title of the act, commencement and
extent, definitions of various terms
Part-II: Concerned with formulation and incorporation of companies, including bank companies, and
memorandum of association for various types of companies, articles of association, general provision
for registration of memorandum and articles of association, associations not for profit, and companies
limited by guarantee
Part-III: Mainly narrates the rules for share capital, registration of unlimited company as limited, and the
limited liability of directors
Part-IV: States the framework for regulating the management and administration of companies, the
requirements for having a registered office of a company with a distinct name at a specific place
Part-VI: Deals in matters relating to the registered office/s of companies; appointment of registrar/s by the
government; their powers and responsibilities, payment of registration fees and submission of
returns and documents to registrar by the companies

9. Sections Companies Act:
Part-VII: Interprets the rules of application of the act to companies formed and registered under former
Companies Acts
Part-VIII: Identifies and defines the companies capable of being registered, the various aspects required for
registration and the power to substitute memorandum and articles for deed of settlement, etc.
Part-IX : The main concern of this part of the act is the procedure for winding up of unregistered companies
Part-X: Includes the requirements for establishing foreign companies in Bangladesh, rules for regulating
them, preparation, maintenance, audit and submission of their accounts to the host country
regulators; notice for closure of foreign companies in Bangladesh; and restrictions on sales and
offer for sale of shares
Part-XI: It is supplemental and relates legal proceedings, offences, etc

10. Schedules of Companies Act:
 Regulation for management of a company limited by shares.
 Table of fees to be paid to the registrar.
 Particulars of prospectus and reports incorporated in it.
 Statement in lieu of prospectus.
 Memorandum and articles of associations of the various types of companies.
 Summary of share capital and lists of shareholders/directors in accordance with Part One of the
Companies Act 1994.
 Specimen of company balance sheets and instruction for profit and loss accounts.
 Statements to be published by bank and insurance companies deposits/provident/welfare associations.

11. Dissolution/ Winding Up of Companies
• Section 234-321 of the company act 1994 deals with winding up of the company.
• Winding up means- the last stage in company life. It’s a proceeding by which a
company is dissolved.
• 3 Modes of Winding up:
1) Wind up by court
2) Voluntarily windup
3) Supervision of the court

12. Company Liquidator
• In a Company, Liquidator is appointed by a court, shareholders, and creditors to sell
off the assets of a Company going for winding up.
• The Liquidator will take control of the business and will distribute the assets of the
Company. The appointment of Liquidator will only be effective if the majority of the
creditors approve for the same.
• If the creditors do not allow for the appointment of Liquidator, then creditors should
appoint another Liquidator.
• The main aim to appoint a Liquidator is that fair distribution of assets is done to the
shareholders.
Official
Liquidator

13. Powers of Liquidator
Subject to adherence to specific legal provisions and legal
procedures, the Powers of Liquidator are broadly summarized in
two heads which are as follows:

14. Amendment of Company Act’ 1994
• 12 th February
COMPANY COMMON SEAL IS NOT
REQUIRED
 COST SAVING
PROCESS SIMPLIFIED

15. 2nd Amendment – 26 November’2020
•One person Company (OPC)
•Other amendments
1) Signature verification of share transfer
2) Place, time and date must be mentioned in
meeting notice and minutes of general meeting
3) Shareholders with 5% can present agenda for
AGM
4) AGM to be called by minimum 21 days notice
instead of 14 days.

16. Other Amendments (Liquidation)
• Any fraudulent transactions will be nullified within 6 months prior
to liquidation unless court validates it.
• Any asset transfer or delivery of goods within 1 year prior to
liquidation may be nullified unless it is part of the company’s
normal business operations.