Company Law

Company :

A company is a business organization where a collection of individual real persons provide some form of capital on common purpose or focus of gaining profits.

Private Limited Company:

Restricts the rights to transfer the shares, Limits the number of its members to minimum 2 and maximum 50    excluding the persons employed in the company Prohibits any invitation to the public to subscribe for the shares or debentures of the company and  Entitles to commence business from the date of its incorporation.

Public Limited Company:

On the other hand a public limited company May issue invitation to the members of the public to subscribe the shares and debentures of the company through a prospectus which complies with the requirements of the Companies' Act (1994) and the Securities and Exchange Commission Act (1993) as amended from time to time. 

·         Has minimum 7 members but there is no maximum limit.

·         Has at least 3 Directors.

·         May be a private company converted into a public company.

Formation of Private & Public Ltd. Co.

 

When the Promoters will desire to form a company, at first they will have to select its name and will apply to the Registrar for the same in a plane paper with a fee of BD Tk. 10/- for each name along with the properly executed deed of settlement or the minutes of their first meeting.
The Promoters may primarily select the name of their proposed company through searching the list of companies by the use of www.boi.gov.bd/bih_pdf/Chapter-4.pdf web site address.
The deed of settlement/minutes of the first meeting of the promoters may be prepared in plane paper and to be signed by all of them and amongst others it must contain the name, address and occupation of the authorized person with his connection with the proposed company who will apply for the clearance of name.

  After obtaining the name clearance the Promoters shall prepare and print the Memorandum and Articles of Association which shall be signed by them before at least two witnesses.

  The promoters shall collect the necessary special adhesive stamp on the basis of authorized share capital of the proposed company from treasury by depositing the money through treasury challan in the Bangladesh Bank and will affix the same on the printed Memorandum and Article of Association of the company.
For the purpose of registration of a company the special adhesive stamp worth Tk. 500/- to be affixed on the Memorandum of Association irrespective of authorized capital and stamp worth Tk. 1500/-, 4,000/- and 10,000/- to be affixed on the Article of Association for the authorized capital of Tk. 10,00,000/-, Tk. 3,00,00,000/- and above Tk. 3,00,00,000/- upto any amount respectively.

 
Three copies of Memorandum and Articles of Association including the original one on which the special adhesive stamp is affixed along with duly filled in form I, VI, IX, X and XII, the clearance of name and the copy of treasury challan relating to the collection of adhesive stamp to be filed in the case of a private company and in the case of a public company a statement in lieu of prospectus (Schedule-4), the declaration for commencement of business (Form-XIV) and (Form XI) as and when necessary to be filed by the promoters in addition to the Memorandum and Articles of Association, papers and documents as mentioned above.
At the time of filing of Memorandum and Articles of Association papers and documents, the promoters will pay fees based on authorized capital of the company as prescribed for the time being in schedule- 2 of the Companies Act, 1994.

Effect of Registration :-

After registration of the company it takes the shape of an incorporated organization under the name mentioned in its memorandum.
This organization is empowered to perform all the works of an incorporated company.
It acquires the permanent inheritance and it shall have a common seal.
The liability of its members is limited by shares.
Upon incorporation of the company it is treated as a juristic person and it shall have a registered office.
There are mainly two categories of company (a) Private Company & (b) Public Company.

Private Company : 

The number of members of this type of company is minimum 2 and maximum 50 (excluding the persons in its employment). Its minimum number of directors are 2 (two).

Public Company : 

Its minimum number of members are 7 and the maximum number is unlimited. The minimum number of Directors are 3 (three).
The companies other than the private limited company is divided as (1) the company limited by the shares, (2) the company limited by guarantee and (3) unlimited company.

The first annual general meeting of the company shall be held within eighteen months from date of its incorporation. Thereafter the annual general meeting of the company shall be held once in every calendar year at such time not being more than fifteen months from the date of preceding annual general meeting [Section- 81].

The annual Balance sheet and Profit & Loss accounts of the company to be placed in the annual general meeting for approval which required to be ended on a date which is within nine months preceding the date of the meeting.
The companies having share capital and incorporated under the Companies Act, 1994 shall have to file the following statutory returns to the Registrar every year :-

(a) The annual list of members and summery [Schedule- 10]: To be filed within 21 days after the date of holdings the annual general meeting. The transfer of shares if any shall be entered or reflected in this return.

(b) Balance sheet and Profit & Loss accounts : To be filed within 30 days from the date of annual general meeting (section 190) the profit and loss accounts to be filed separately in the case of a private company.

(c) Consent of auditor (AC) [ Section 210] : The Company shall inform the auditor or auditors in respect of his/their appointment within 7 days from the date of annual general meeting and the auditors shall inform the Registrar whether the appointment has been accepted or refused by him or them within 30 days from the date of receipt of such information [Section 210 ].

(d) Statutory Report (SR) : Applicable in the case of public limited companies [ Section 83].

(e) Particulars of Directors (Form XII) : The information in respect of appointment of Directors or any change thereof and in the case of retirement of Directors by rotation and re-election in public company to be filed with the Registrar within 14 days form the date of such appointment or change [Section 115].

(f) The consent of the Directors to act (CD) [Form IX] [Section 92].

RETURNS TO BE FILED IN RESPECT OF ANY CHANGE IN THE COMPANY:

Returns of Allotment (RA) [Form- XV] : To be filed within 60 days after the date of allotment [Section 151]. The capital allotted to be added and entered in the next annual list of members and summery.
Particulars of Mortgage (PM) : To be filed within 21 days after the date of execution of the mortgage deed [Section 159].
Particulars of Modification of Mortgages (PMM) : To be filed within 21 days after the date of execution of modification deed [Section 167(3)].
Particulars of Satisfaction of Mortgages (PSM) : To be filed within 21 days from the date of satisfaction of the loans or debts [Section 172].
Notice of Situation of Registration of Office : To be filed within 28 days after establishment or change of the registered office [Section 77] [ Form VI].
Proceeding of Special or Extra-ordinary General Meeting : To be filed within 15 days from the date of meeting [Section 88].

Prospectus : 

On or before the date of issue of the prospectus [Section 138].

Change of Name of the Company : 

To be filed within 15 days from the date of special resolution relating to change of name [ Section 11 (6) and 88].

Change of Memorandum of Association :

To be filed within 90 days from the date of order of the court or within the extended period sanctioned by the court [Section 12 and 15].
Notice relating to consolidation or sub-division of shares or the conversion of shares into stock : To be filed within 15 days from the date of change or conversion [Section 54].

Conversion of private company into public company : 

To be filed within 30 days after the date of taking decision of conversion [ Section 231]. Conversion of public company into private company : To be filed within 15 days from the date of taking decision of conversion [Section 232].
Notice of increase of share capital or the number of members : To be filed within 15 days from the date of taking decision of such increase [Section 56].
The yearly statutory returns or returns relating to any change in the company to be filed with the fees prescribed in schedule- 2 of the companies Act, 1994. If any company fails to file the returns within the prescribed time limit, it may be filed on payment of late fee @ Tk. 1 (one) for every day subject to the maximum late fees of Tk. 500/-. Any liability relating to filing of return shall not be condoned by the payment of late fees.
There is no provision for filing of particulars of Mortgage or charge and return of allotment with late fees.

VIEWS FROM COMPANIES ACT-1994

Section: 4. Prohibition of partnership exceeding certain number:

(1) Nor company, association or partnership consisting of more than ten persons shall be formed or a the purpose of carrying on the business of banking unless it is registered as a company under this Act or is formed by or under any other Act of Parliament.

(2) No company association or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any other business that has for its objects the acquisition of gain by the company, association or partnership, or by the individual members thereof unless it is registered as a company under this Act or is formed by or under any other Act

of Parliament.

(3) This section shall not apply to joint family carrying on joint family business or trade. Provided that for the purposes of this section, in computing the number of persons of a partnership, association or company comprising two or more joint families, minor members of such families shall be excluded.

(4) Every member of a company, association or partnership carrying on business in contravention of this section shall be personally liable for all liabilities incurred in such business.

(5) Any person who is a member of a company, association or partnership formed in contravention of this section shall be punishable with fine not exceeding five thousand taka.