about Company Act in Bangladesh

1. Company Law 1994
Definition & Types of Company
“An association of many persons who contribute
money or money’s worth to a common stock and
employ it for a common purpose. The persons who
contribute it or to whom it belongs are members.
The proportion of capital to which each member is
entitled is his share”. – Lord Justice Lindley.

2. CONCEPT OF COMPANIES
In the 16th century the size of business started
growing very fast as a result of industrial
revolution taking place in Europe.
The business felt the need of vast finances
and resources which was not possible in the
sole proprietorship and partnership.
As a result some business entrepreneurs
conceived an idea to form Companies started
raising funds from the public and giving them the
shares in the business.
This concept became very popular as public at
large got involved in the business owned by the
companies and reaped good profits in the process.

3. THE COMPANY
“ A company is an artificial person created and
affected by law, having a separate entity, with a
perpetual succession and a common seal.”
A legal device for the attainment of any social or
economic end. It is combined political, social,
economic and legal institution.

4. KINDS OF COMPANIES
Non-Govt.
Companies
Limited by
Guarantee
Private Limited
Public Limited
Govt.
Companies
Statutory
Companies
Unlimited

5. BOARD OF DIRECTORS
• Company is a legal entity and is governed by
Board of Directors.
• Directors are appointed by the shareholders
and are their agents and trustees.
• MD works under the overall guidance,
supervision and control of the BODs and is
vested with substantial powers.

6. Types of
Directors
Whole Time
Directors
Part Time
Directors
Independent
Directors

7. COMPANY MEETINGS
Type of Company
Meetings
Shareholders Meetings Directors’ Meetings
Annual
General Meeting
Extraordinary
General Meeting
Board
Meetings
Committee
Meetings
Statutory
Meeting
Other Meetings
Creditors’
Meeting
Debenture holders
Meeting

8. MEMORANDUM & ARTICLES OF
ASSOCIATION
Memorandum of Association is a document
which sets out the constitution & defines the
scope of activities. A Charter with a
foundation on which the structure of Co. is
built.

9. MEMORANDUM & ARTICLES OF
ASSOCIATION
• Contents Memorandum of Association
– Name Clause
– Situation Clause
– Object Clause
– Capital Clause
– Association Clause & Subscription
• Articles of Association
– Contain by-laws, rules & regulations to govern the
management of internal affairs and the Conduct of
Business

10. SOURCES OF FINANCE
Sources of
Finance
Shares Debt
Equity Shares
Preference Shares
Debentures
Loans
Public Deposits

11. BALANCE SHEET
Liabilities Rs. Crore Assets Rs. Crore
Share Capital 4108 Fixed Assets 7477
Reserves & Surplus 43 Current Assets 715
Secured Loans 3137
Unsecured Loans 494
Current Liabilities 410
TOTAL 8192 TOTAL 8192

12. Types of Company
• Private company
• Public company
Public companies are of 4 types. These are:
• Company limited by shares
• Companies limited by guarantee
• Unlimited company
• Statutory company

13. Capital of Company
• Authorize capital (Before application to the
registrar to be fixed)
• Paid up capital (combination of issued,
subscribed, called up)
• Share
• Debenture(loan)

14. Company Registration
• Under Company Act 1994 (about 90,000)
• Under non-company acts(Society Act,
Partnership Act, MLM, Trust Act etc. about
60,000)
• 80,000 Private limited company
• 10,000 public limited company
• 400,listed company again registered under
Bangladesh Stock Exchange Commission as
regulator

15. Stakeholders
• Shareholders
• Lenders
• Investors
• Customers
• Employees
• Government
• Public at large

16. Efficient Management
• Maximization of wealth
• Quality product
• Affordable price
• Big market
• Big profit
• Tax to govt.
• Overall development of country

17. Holding & Subsidiary Companies
Holding
Company
Subsidiary
Company Associate
Investor
More than 20%
More than 50% Shares Less than 20%

18. Constitution & Incorporation
• Memorandum of Association (company
limited by guarantee, Limited by shares)
• Persons to sign before two witnesses
• Power of court in confirming alteration
• Article of Association
• Registrar to approve the incorporation of a
company

19. Limited Companies
• 2-50 members private limited
• 7 – unlimited public limited company
• Nature of company can be changed
• Association not for profit(sec 28)

20. Management and Administration
• 1st AGM within 18 months from the date of
incorporation
• Next AGM every year
• Gap must not be more than 15 months
between two AGMs
• EGM(extra general meeting) as per
requirement of company

21. Liability of Directors
• Company is a natural person
• Can sue and can be sued
• Every year 3 directors to be voluntarily retired
subject to re elect
• Director not to hold office of profit(permission
of the company is required)

22. Business of Company
• Dividend
• Profit

23. Audit & Accounts
• Every year audit by an repudiate audit firm
• 1st audit after one month by the Board of
governors
• Accounts within 9 months of AGM
• Either 30th June, 31st December, or 31st March

24. Important Miscellaneous
• Managing agent
• Contracts
• Charges
• Prospectus
• Share certificate

25. Winding up of a Company
• By contributors
• By court (high court)
• Appointment of liquidator
• Voluntary winding
• Creditors voluntary winding up