Chapter 1.Presentation Patnership

8/9/2019 Chapter 1.Presentation Patnership

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MST 315

Company Laws &

Secretarial Practices InBangladesh

Company Laws & Secretarial PracticesIn Bangladesh


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Bangladeshi some company name?

inance sector?Ins!rance sector?

"gro #ased?

$ospital?

Cement?Pharmace!ticals?

Te%tile?

Ship#!ilding Ind!stry?

thers?



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'e(erence #oo)s*

1+M!,tadir-s $and#oo) (or company secretary

.+The companies act/1002 Mr+Md+ Mah#!#!r

'ahman3+((ice Management '+)+ sharma/shashi)+g!pta



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Company 4 Laws

"#o!t Company*

A company, formed and registered under theCompanies Act (1994), is regarded by law as a

single person, having specified rights andobligations (Duties!esponsibilities)" #he lawconfers on a company a distinct legal personality, with perpetual succession and a

common seal" #herefore a company is differentfrom its members and the individuals composingit"

Company Laws & Secretarial Practices In Bangladesh


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"s nder Sec . 617 6d7 The Company "ct/

100* 8Company means a company

(ormed and registered !nder this "ct or ane%isting company+9



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"#o!t laws*

" r!le enacted or c!stomary in a

comm!nity and recogni:ed ascommanding or (or#idding 6hostile7 certainactions+ Laws collecti;ely as a socialsystem or s!#


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The companies act

There are two immediate o#


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$istory o( Company Laws

1+

In 1=53 irst time >ast India Start it-s


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1 "irst &ndian Co#pany Act' regarding companies/ wasthe oint Stoc) Companies "ct o( 15A+

.+ The act o( 15A was replaced #y a new "ct #earing thesame name in 15@+

! Li#ited liability $as introduced%+ "cts relating to companies were passed in

1=A/1==/1./105/101A/ and 1013+

0+ The act 1013 remained in (orce !p to 105=

1A+ The "ct o( 105= has #een amended

in10=A/10=3/10=5/10=0/10@1/10/10+11+ In 100 the new company law introd!ced #y o!r

go;ernment+

6Indian companies act 105= and Pa)istan Companiesordinance 10



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(ypes o) Co#panies *

+ri,ate Co#pany

i+ Companies limited #y shares

ii+ Companies limited #y g!arantee 6 g!arantee (or li,!idation7

+ublic Co#pany

i+ Companies limited #y shares

ii+ Companies limited #y g!arantee 6 g!arantee (or li,!idation7iii+ nlimited companies

Classi)ication on the Basis o) Control*

i+ $olding Company

ii+ S!#sidiary Company

Classi)ication o) others*i+ oreign company

ii+ oint ;ent!re company



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Co#pany Li#ited Liability by -hares* In these companies there is

a share capital/ and each share has a (i%ed nominal ;al!e which the

shareholder pays at a time or #y the installments+ The mem#er is

not to pay anything more than the (i%ed ;al!e o( the share/ whate;ermay #e the lia#ilities o( the company+

Co#pany Li#ited by .uarantee* In these companies/ each

mem#er promises to pay (i%ed s!m o( money in the e;ent o(

li,!idation o( the company+ This amo!nt is called the !arantee+



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Pri;ate Limited Company

As de)ined in -ection 2!/% o) the act' a pri,ate co#pany #eans a

co#pany $hich by its articles*

a7 restricts the right to trans(er the share/ i( anyD and/

#7 prohi#its any in;itation to the p!#lic to s!#scri#e (or the

shares / i( any/ or de#ent!res o( the companyD and/

c7 limits the n!m#er o( its mem#ers to (i(ty 65A7 not incl!ding

persons who are in the employment o( the company+

8" Company incorporates with #ore than t$o person and it is limited

to )i)ty #e#bers + In this case it is only a h!ge partnership and thelia#ility is !nlimited9



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P!#lic Limited Company

In p!#lic limited company/

2p!#lic can ac,!ire/2own/ and

2sell the share o( s!ch type o( company at their wishes+

2The company can iss!e prospect!s to the p!#lic to s!#scri#e the

share and de#ent!res o( the company and/ th!s/ can collect capital (or

the company+

“A companies which is constituted with a minimum of seven

members and maximum is unlimited , and members called share

holders. Here the liability is limited up to level of what he is invested”



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Classi)ication on the basis o) control* In accordance with the #asis

o( control/ Companies may #e classi(ied into2

1olding Co#pany* I( a company can control the policies o( another

company6a7 thro!gh the ownership o( its shares or

6#7 thro!gh control o;er the composition o( its Board o(

Eirectors/ the (ormer i+e+

the controlling company is called a $olding Company+

2 -ubsidiary Co#pany* The controlled company is called

s!#sidiary company o( holding company+



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Classi)ication o) others*

"oreign co#pany*

Fhen a company which is incorporated o!tside Bangladesh #!t esta#lishes#!siness in Bangladesh with same name and nomenclat!re

6arrangement7 with or witho!t a place o( #!siness in the co!ntry/ it is

registered as a (oreign company in Bangladesh+ Sec3@ to 30.

oint ,enture co#pany* "n association o( two or more indi;id!als or companies engaged in a solitary

#!siness enterprise (or pro(it witho!t act!al partnership or

incorporationD also called a


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Characteristics o) a co#pany*

Legal )or#ation* the company is to #e (ormed according to the

prod!cer prescri#ed in companies "ct in Bangladesh+

Arti)icial entity* a company possesses independent and separate

entity+

Capital* the capital o( company is collected thro!gh


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Li#ited liability Co#pany* the lia#ility o( shareholder o( a company

is limited #y the share ;al!e+

+ublic subscription and trans)erability o) share* i( the companyis a p!#lic company/ then it can call the p!#lic to s!#scri#e the

share capital and also its shares are (reely trans(era#le (rom one

hand to another+ The share capital o( pri;ate listed company is

trans(era#le among the shareholders+

-eparation o) o$nership )ro# #anage#ent* in a company/ theownership is separated (rom management+

3e#ocratic #anage#ent* the management o( company is done in

a democratic way+

+ro)it distribution* the earnings o( a company are partly distri#!ted

as di;idend among shareholder and a portion is )ept (or (!t!reneeds as reser;es+



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(he 4e#orandu# o) Association !4A% *

The Memorand!m o( "ssociation is a doc!ment which contains the)unda#ental rules regarding the constit!tion and acti,ities o) a co#pany+

The memorandum contains:

2 Jame o( the companyD

2 'egistered o((ice and agentD

2 '!les regarding the capital str!ct!re2 The lia#ility o( the mem#ers

2 The o#


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Contents o) 4e#orandu# o) Association

Contents o( Memorand!m o( "ssociation "ccording to the Companies "ct 100/ theMemorand!m o( "ssociation m!st incl!de the (ollowing Cla!ses*

1 a#e Clause

>;ery company name m!st end with Limited 6Ltd+7+ Jo name o( the company sho!ld #e

the name o( the e%isting company/ )ing/ ,!een/ president/ prime minister/ ather o(

Jation or anything that signi(ies go;ernment sponsorship+

2 -ituation and Address ClauseThis cla!se sho!ld incl!de the address and sit!ation o( the company/ which is mention in

the registration+

5 Area o) Business

It sho!ld incl!de the c!rrent and potential area o( the #!siness+ It sho!ld #e written

care(!lly/ #eca!se it made the #o!ndary aro!nd the #!siness operations+



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6 b8ecti,e Clause

This cla!se is the most important cla!se o( M"+ This cla!se identi(ies the scopeo( the #!siness+ Beyond these identi(ied scopes/ the #!siness can-t mo;e+

or e%ample/ I( a company says its o#


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(he Articles o) Association !AA% *

The "rticles o( "ssociation is a doc!ment which contains rules' regulations and bye;la$s

regarding the internal #anage#ent o( the company+ The "rticles can co;er a medley o( topics/

the issuing o) shares 6also called stoc)7/ di((erent ;oting rights attached to di((erent

classes o( shares

the appoint#ents o) directors 2 which shows whether a shareholder dominates or

shares e,!ality with all contri#!tors

directors #eetings 2 the ,!or!m and percentage o( ;ote

#anage#ent decisions 2 whether the #oard manages or a (o!nder

trans)erability o) shares 2 assignment rights o( the (o!nders or other mem#ers o( the

company do

special ,oting rights o) a Chair#an/ and hisKher mode o( election

the di,idend policy 2 a percentage o( pro(its to #e declared when there is pro(it or

otherwise $inding up 2 the conditions/ notice to mem#ers

con(identiality o( )now2how and the )ounders< agree#ent and penalties (or disclos!re

)irst right o) re)usal 2 p!rchase rights and co!nter2#id #y a (o!nder+


http://en.wikipedia.org/wiki/Shareshttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Shares


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Articles o) Association

!egistration of articles

Application of $chedule %

&orm and signature of articles


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Registration o) articles


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Application o) -chedule &

In the case o( a company limited #y sharesand registered a(ter the commencement o(this "ct/ i( articles not registered/ or/ i( articlesare registered/ in so (ar as the articles do note%cl!de or modi(y the reg!lations in Sched!leI/ those reg!lations shall/ so (ar as applica#le#e the reg!lations o( the company in the

same manner and to the same e%tent as i(they were contained in the d!ly registeredarticles+


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"or# and signature o) articles

"rticles shall

6a7 #e printedD

6#7 #e di;ided into paragraphs n!m#ered consec!ti;elyD

6c7 #e signed #y each s!#scri#er o( the memorand!m/ who

shall add his address and description in the presence o(

at least two witness who shall attest the signat!re+


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Registration o) #e#orandu#

and articles 617 The memorand!m and articles i( any shall #e (ield with the

'egistrar who i( satis(ied that the re,!irements o( this "ct ha;e #eencomplied with shall retain and register them within thirty days (romthe date o( their receipt and in the e;ent o( re(!sal he shall

comm!nicate the gro!nds within ten days a(ter that period to thecompany+ 6.7 " person on #eing aggrie;ed #y a re(!sal o( the 'egistrar !nder

s!#2section 617 may ma)e an appeal to the o;ernment within thirtydays o( the receipt o( the re(!sal order+

637 The petition o( appeal shall #e accompanied #y a treas!ry

challan showing o( a (ee o( two h!ndred (i(ty ta)a to #e credited!nder the head o( acco!nt speci(ied in this #ehal(+ 67 The decision o( the o;ernment in an appeal !nder this section

shall #e (inal+


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+rospectus

3ating o) prospectus

4atters to be stated and reports to be

set out in prospectus Registration o) prospectus


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3ating o) prospectus

" prospect!s iss!ed #y or on #ehal( o( a

company or in relation to an intended

company shall #e dated/ and that dateshall/ !nless the contrary is pro;ed/ #e

ta)en as the date o( p!#lication o( the

prospect!s+


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4atters to be stated and reports to be set out in

prospectus

Section132135/ Companies act 6Bangladesh7100

Registration o) prospectus

Section130/ Companies act 6Bangladesh7100


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+ro#oters

" corporate promoter 6also pro


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(ypes o) +ro#oters

Promoters may #e classi(ied into the (ollowing types+

+ro)essional +ro#oters

They are e%perts who speciali:e in company promotion+ They (loat the

company and hand it o;er to the shareholders or their representati;es+ Promotion is their

main pro(ession or occ!pation+

ccasional +ro#oters

There promoters ta)e interest in (loating some companies+ They are not

engaged in promotion wor) on a reg!lar #asis+ They ta)e !p the promotion o( some

company and once it is o;er they go to their original pro(ession+ or instance/ engineers/

lawyers etc+ may (loat some companies+

Entrepreneur +ro#oters

They are #oth promoters and entreprene!rs+ They concei;e idea o( a new

#!siness !nit/ do the gro!ndwor) to esta#lish it and s!#se,!ently #ecome a part o( the

management+

"inancier +ro#oters

Some (inancial instit!tions/ li)e in;estment #an)s or ind!strial #an)s/ may ta)e

!p the promotion o( a company with a ;iew to (inding opport!nities (or in;estment+


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"unctions o) +ro#oters 3isco,ery o) a business idea

The (irst stage in company promotion is the conception o( a new idea+ It is the

promoter who concei;es the idea o( setting !p a #!siness+ I( ma)es an assessment o(the ;ia#ility o( a partic!lar #!siness+

3etailed in,estigation

Promoters !nderta)es a detailed in;estigation o( the ;ia#ility/ pro(ita#ility and (!t!re

prospects o( the growth o( the proposed acti;ity+ To assist then in this ;ent!re/ they

see) the help o( specialists s!ch as chartered "cco!ntants/ Cost "cco!ntants/

Company Secretary/ >ngineers+ rgani:ations engaged in mar)et research and other

speciali:ed agencies+ Specialists are in a position to ma)e an o#


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R-C

The 'egistrar o( oint Stoc) Companies and irms

6'SC7 is the sole a!thority which (acilitates (ormation o(

companies etc+D and )eeps trac) o( all ownership related

iss!es as prescri#ed #y the laws in Bangladesh+

The 'egistrar is the a!thority o( the ((ice o( the'egistrar o( oint Stoc) Companies and irms/

Bangladesh+

Company Laws & Secretarial Practices

In Bangladesh


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istorical Bac=ground

"(ter the partition o( India/ the ((ice o( the 'egistrar o(oint Stoc) Companies & irms !nder the Ministry o(

Commerce was (irst set !p in Chittagong/ the port and

.nd #iggest city o( Bangladesh with some (iles and

records o( Companies/ "ssociations 6Tradergani:ations7 and partnership (irms recei;ed (rom

ol)ata/ India+ The o((ice was trans(erred to Eha)a/ the

capital o( Bangladesh in 10=.+ C!rrently there are

aro!nd 11A/AAA entities registered !nder 'SC+


In Bangladesh


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'SC deals with the (ollowing types o( entities*

i+Pri;ate companies

ii+P!#lic companies

iii+oreign companiesi;+Trade organi:ations

;+Societies/ and

;i+Partnership (irms


In Bangladesh


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The ma


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Documents

Chapter 1.Presentation Patnership