Bangladesh companies act, 1994.

Company is an artificial entity. Company can suit or suit is against company. Board of directors
and shareholders operate company. A certain level of shares holding is necessary to come to
board. Number of Board meeting is at least 4. Amended company act 2020 brings the concept
of One Person Company. 11 chapters exist in company act 1994 containing 404 sections.

Section 2 definitions:
Articles of association: internal regulations of company, governing internal management and
working.
Company: "company" means a company formed and registered under this Act or an existing
company;
"Director" includes any person occupying the position of director by whatever name called;
"existing company" means a company formed and registered under any law relating to
companies in force at any time before the commencement of this Act, and is in operation after
commencement of this Act.
Financial year: Generally July to June except bank and non bank financial institution, insurance
company (calendar year) and all MNC company
Manager is under the supervision of board of directors.

The business judgment rule is invoked in lawsuits when a director of a corporation takes an

action that affects the corporation, and a plaintiff sues, alleging that the director violated
the duty of care to the corporation.

In suits alleging a corporation's director violated his duty of care to the company; courts will
evaluate the case based on the business judgment rule. Under this standard, a court will uphold
the decisions of a director as long as they are made (1) in good faith, (2) with the care that
a reasonably prudent person would use, and (3) with the reasonable belief that the director is
acting in the best interests of the corporation. 

Practically, the business judgment rule is a presumption in favor of the board. As such, it is
sometimes referred to as the "business judgment presumption."
Public limited company: minimum shareholder 7 and maximum unlimited. Minimum Director 3
Private company: minimum shareholder 2 and maximum 50.

3. Jurisdiction of the Court: all company cases (civil procedure) to High court division of
Supreme Court to be settled or heard. District court as per govt. gazette.

4. Prohibition of partnership exceeding certain number:

-Nor company, association or partnership consisting of more than ten persons shall be formed
for the purpose of carrying on baking business unless it is registered as a company under this
Act.
- Partnership consisting more than twenty persons will not be formed. It will be converted to
either public ltd or private ltd company.
Non compliance with section 4 will Fine Tk5000 for every member.
2nd chapter (from sections 5 to sections 16) deals with the issues of Memorandum of
association.
Memorandum of association is basic constitution of the company.

5. Mode of forming incorporated company.

Any seven or more persons with which the company to be formed will be a public company and
private company, any two or more persons associated for any lawful purpose, subscribing their
names to a memorandum of association may form an incorporated company, with or without
limited liability, that is to say,
either-- (a) a company limited by shares- a company having the liability of its member limited by
the memorandum to the extent of face value of share subscribed by him. A company limited by
shares may be a public company or a private company.

(b) a company limited by guarantee-a company having the liability of its members limited by
the memorandum to such amount as the members may respectively undertake to contribute to
the assets of the company on the event of its being wound up; Such a company may be a public
company or a private company.

or (c) an unlimited company- a company having no limit on the liability of its members.

OPC, Plc for public limited company, limited for private.

6. Memorandum of company limited by shares.

In the case of a company limited by shares.
- (a) the memorandum shall state—
(i) the name of the company, with "limited" as the last word in its name; Opc, Plc for public
limited company, limited for private
(ii) The address of the registered office;
(iii) the objects of the company; (to change object clause requires high court permission)
(iv) that the liability of the members is limited;
(v) the amount of share capital with which the company proposes to be registered, and the
divisions thereof into shares of a fixed amount;
(b) each subscriber of the memorandum shall take at least one share;
(c) each subscriber shall write opposite to his name the number of shares he takes.

7. Memorandum of company limited by guarantee.

(a) the memorandum shall state-- (i) in addition to the above; (v) that each member undertakes
to contribute to the assets of the company in the event of its being wound up for payment of
the debts and liabilities of the company;
(b) if the company has a share capital—
(i) the memorandum shall also state the amount of share capital with which the company
proposes to be registered and the division thereof into shares of a fixed amount;
(ii) each subscriber of the memorandum shall take at least one share;
(iii) each subscriber shall write opposite to his name the number of shares he takes.

8. Memorandum of unlimited company. In the case of an unlimited company

(a) the memorandum shall state-
(i) the name of the company;
(ii) the address of the registered office of the company;
(iii) the objects of the company and
(b) if the company has a share capital-
(i) each subscriber of the memorandum shall take at least one share;
(ii) each subscriber shall write opposite to his name the number of shares he takes.

11. Name of company and change of name:

a. A company shall not be registered in the name of any existing company.
b. If a company, through inadvertence or otherwise, is registered by any existing company
name, the first mentioned company shall change its name within a period of one hundred and
twenty days, on the direction of the Registrar.
c. If a company makes a default in complying with the direction made under sub-section (b), the
company shall be punishable with fine of five hundred take for every day during which the
default continues and every officer who is in default shall be punishable with fine of one
hundred taka for every day during which the default continues.
d. no company shall be registered by a name which is declared by the Government by
notification in the official Gazette, except with the previous consent in writing of the
Government.
e. No company shall be registered by a name containing in any form the name of the United
Nations or of any subsidiary body set up by the United Nations unless the company has
obtained the previous authorization in writing of the Secretary General of the United Nations.
f. Any company may, by special resolution and subject to the written and signed approval of the
Registrar change its name.
g. Were a company changes its name, the Registrar shall enter the new name on the register in
place of the former name, and shall issue a certificate of incorporation in its new name and on
the issue of such a certificate, the change of name shall be complete.
h. The change of name shall not affect any rights or obligations of the company.
i. A company may, on payment of such fee as prescribed, apply to the Registrar for information
whether any company is registered or proposed to be registered by a name specified in the
application and the Registrar shall furnish the required information within a period of thirty
days from the date of receipt of the application.

Section 11 deals with the change of name of company. Any company may change its name by a
special resolution of the company subject to the written and signed approval of the Registrar.
Were a company changes its name, the Registrar shall enter the new name on the register in
place of the former name, and shall issue a certificate of incorporation in its new name and on
the issue of such a certificate, the change of name shall be complete. The change of name shall
not affect any rights or obligations of the company.

12. Alternation of memorandum:

The memorandum of association of a company can be altered by the following procedures
Section 12- 1 company may, by special resolution, alter the provisions of its memorandum with
respect to the objects of the company, subject to the following:
2. The Court must approve the alteration.
3. Before confirming the alteration, the Court must be satisfied about the following terms of the
company:
a. Sufficient notice has been given to every holder of debentures or creditors of the company.
b. Every creditor who signifies his objection in manner directed by the Court, either his consent
to the alteration has been obtained or his debt or claim has been discharged or has been
secured to the satisfaction of the Court.
4. The Court may approve either wholly or in part of proposed alteration on such terms and
conditions as it thinks fit.
5. A certified copy of the order confirming the alternation, together with a printed copy of the
memorandum as altered, shall be filed by the company with the Registrar within ninety days
from the date of the order or within such time as may be extended by the court, and the
Registrar shall register the same and shall certify the registration under his hand, and the
certificate shall be conclusive evidence that all the requirements of this Act, with respect to the
alteration and the confirmation thereof, have been complied with, and hence forth the
memorandum so altered shall be the memorandum of the company.

Articles of association can be altered, extended and amended according to rules of Company
Law, without permission of Court but taking decision in the members meeting.
The following rules and restrictions are to be followed to alter the articles:
1. The articles of association can be altered after taking special resolution in the members
meeting.
2. Alteration of articles never violet the rules of memorandum and Company Law.
3. The alteration in the articles should be fair and for the benefit of the company as a whole and
not for a class or group of members only.
4. Alteration of articles is not to be contradiction with the order of the Court.
5. The right of the minority members cannot be broken by alteration of articles.
6. Alteration of articles is not for increasing the liability of all members or a few members.
Every special resolution amending the articles of association must be supported by a return to
the registrar within fifteen (15) days of passing of the resolution as required under Section 88 of
the Act.
Articles of Association,
17. Registration of articles:
(1) A company limited by guarantee and an unlimited company shall, and a company limited by
shares may, have an articles of association for regulating the affairs of the company; and the
article shall be signed by the subscribers of the memorandum and be registered together with
the memorandum.
(2) Articles of association may adopt all or any of the regulations contained in Schedule I.
(3) In the case of an unlimited company or a company limited by guarantee, the articles, if the
company has a share capital, shall state the amount of share capital with which the company
proposes to be registered.
(4) In the case of an unlimited company or a company limited by guarantee, if the company has
not a share capital, the articles shall state the number of members with which the company
proposes to the registered; and on the basis of such number the Registrar shall determine the
fees payable on registration.
One person company: as per amended new company act 2020. A natural person can form OPC.
A nominated person has to be mentioned in OPC Memorandum who will be a shareholder if the
member forming the OPC is died or unable to operate OPC. There is the opportunity for
changing nominated person at RJSC.
Paid up capital of OPC is 25 lac to 5 crore taka
Turnover from 1 crore to 50 crore.

Sole proprietorship-unlimited liability

Naturally OPC is a limited liability company unless it is unlimited company
Partnership-limited liability Partnership –unlimited liability Partnership
-registered partnership-unregistered partnership

The stages of forming a company may be divided into the following stages:-
1. Promotion;
2. Preparation of documents;
3. Registration or Incorporation;
4. Capital subscription; and
5. Collection of certificate of incorporation.

(i) Promotion: Promotion is the first stage in the formation of a company. In the promotional
stage, at first one or more persons conceive the idea of forming the company. Then two
persons in case of forming private company and seven persons in case of forming public
company are required for this purpose. As promoters the above mentioned persons do the
following things:-

Taking necessary decision: The promoters take decisions about the name of the company,
financial plan, whether the company is a public or private company etc.
Collecting name clearance certificate: Then the promoters are required to have a name
clearance certificate from the Registrar's office. To be sure whether the proposed name is used
by some others or not the website of the office of the registrar of the joint stock company may
be searched. After obtaining the name clearance certificate necessary steps for registration of
company are needed to be taken within 30 days.

(ii) Preparation of documents: In this stage the promoters prepare at least two important
documents: a) Memorandum of association; and b) Articles of association.
(a) Preparation of Memorandum of association: The promoters have to prepare a
memorandum for the company which is the basic document of the company. Section 6 of the
companies Act, 1994 provides for the memorandum of a company limited by shares, section 7
provides the memorandum of a company limited by guarantee and Section 8 deals with the
memorandum of an unlimited company. However, a Memorandum of a company limited by
shares ordinarily includes the followings: - Name of the company with limited as the last word;
address of the company; Objects of the company; Liability of the members limited; The
proposed amount of share capital.
Section 9 provides that a memorandum shall have to be printed and signed by each subscriber.
(b) Preparation of articles of association: Articles of association of a company is the second
important document of a company which regulates rights of the members of the company
among themselves and the manner in which the company shall be conducted. Section 19
provides the procedure of making and presenting the articles of a company. Submission of
documents: After preparing all the documents, they are required to be sent to the office of
Registrar.

(iii) Registration or incorporation: After filing the Memorandum and articles with the Registrar,
if the Registrar is satisfied that all the provisions of law have been complied with, then he shall
register the documents within 30 days from the date of receipt and in case of refusal the
grounds to be communicated within ten (10) days after that period. [s. 23(1)]

On the registration of the Memorandum the Registrar shall certify that the company is
incorporated. [Sec. 24(1)]. It is to mention here that for the registration of documents, fees
mentioned in Sch-II shall have to be paid.

(iv) Capital subscription: Capital subscription is very important. A private company raises capital
personally. But in case of public company for raising Capital issue of prospectus and other
necessary activities are to be performed.

(v) Obtaining the certificate of commencement of business: After a company is registered it has
corporate personality. A private company can commence its business immediately after
registration but a public company must, for commencing its business, obtain a certificate of
incorporation. A Company shall not commence any business or exercise any borrowing powers
unless— (a) Shares held subject to the payment of the whole amount thereof in cash have been
allotted to an amount not less in the whole than the minimum subscription and (b) Every
director of the company has paid in cash in each of the shares taken by him. [s. 150]
After fulfilling the above mentioned two conditions the following documents need to be
submitted in the office of Registrar (1) A verified declaration by the secretary or by any of the
directors of the company that the above mentioned conditions have been fulfilled; and [ s.
150(1(c)]

(2) A statement in lieu of prospectus where the prospectus has not been issued. [s. 150(1(d)]

After all the activities have been performed, the Registrar shall issue a certificate of
commencement of business and it shall be conclusive evidence that the company is so entitled.
[s. 150(2)].

Section 90 to 110 discuss about director-appointment, duties, minimum qualification to be

appointed

Section 81 to 89 discuss about meetings and proceedings

90. Directors obligatory - (1) every public company and a private company which is a subsidiary
of a public company shall have at least three directors.
(2) Every private company other than a private company mentioned in sub-section (1) shall
have at least two directors;
(3) Only a natural person may be appointed a director.

91. Appointment of directors: -

(1) Notwithstanding anything contained in the articles of a company—
(a) the subscribers of the memorandum shall be deemed to be the directors of the company
until the first director are appointed.
(b) the directors of the company shall be elected by the members from among their number in
general meeting; and 1st AGM will be held within 18 months for new company then 15 months.
Minimum one AGM in each calendar year.
(c) any casual vacancy occurring among the directors may be filled in by the other directors but
the person the appointed shall be a person qualified to be elected a director under clause (b)
and shall be subject to retirement at the same time as if he had become a director on the day
on which the director in whose place he is appointed.

(2) Notwithstanding anything contained in the articles of a company other than a private
company not less than one third of the whole number of directors shall be persons whose
period of office is liable to determination at any time by retirement of directors’ rotation.

92. Restrictions on appointment or advertisement of director –

(1) A person shall not be capable of being appointed director of a company by the articles and
shall not be named as a director or proposed director of a company in any prospectus issued by
or on behalf of the company or in relation to any intended company or in any statement in lieu
of prospectus filed by or on behalf of a company unless before the registration of the articles or
the publication of the prospectus, or the filing of the statement in lieu of prospectus, as the
case may be, he has by himself or by his agent authorized in writing –
(a) signed and filed with the Registrar a consent in writing to act as such director; and
(b) in the case of companies having a share capital –
(i) signed the memorandum for a number of shares not less than his qualification shares; or
(ii) taken from the company and paid or agreed to pay for his qualification shares; or
(iii) signed and filed with the registrar a contract in writing to take from the company and pay
for his qualification shares; or
(iv) made and filed with the Registrar any affidavit to the effect that a number of shares not less
than his qualifications share are registered in his name.
(2) On the application for registration of the memorandum and article of a company, the
applicant shall file with the Registrar a list of the persons who have consented to be directors of
the company, and, if this list contains the name of any person who has not so consented, the
applicant shall be liable to fine not exceeding two thousand taka.
Provided that nothing in this section shall apply to the appointment of the chief executive, by
whatever name called, of any insurance company or a banking company as a director of that
company if the article; thereof provides for such appointment.

94. Disqualifications of directors - (1) A person shall not be capable of being appointed director
of a company, if –
(a) he has been found to be of unsound mind by a competent court and the finding is in force;
or
(b) he is an undischarged insolvent; or
(c) he has applied to be adjudicated as an insolvent and his application is pending; or
(d) he has not paid any call in repect of shares of the company held by him, whether alone or
jointly with others, and six months have elapsed from the last day fixed for the payment of the
call; or
(e) he is a minor.
(2) A company may in its articles provide additional grounds for disqualification of a director.

Who can be a director/qualification of director: The director must have the following
qualifications:
-a director must be capable of entering into a contract i.e. a)he must have attained the age of
majority, b)he must have sound mind, and c) he must not be disqualified from contracting by
any law to which he is subject.
-a director must be a natural person.
-a director must have the requisite qualification shares

Section 97 Qualification of Director:--(1) it shall be the duty of every director to hold

qualification share to be specified in the articles and, if he is not already qualified, he shall
obtain his qualification within sixty days after his appointment, or such shorter time as may be
fixed by the articles.
December 2018 case question 2:

Answer: as fred is not acting in the best interests of the company and acting without
sanction/authorization of the board of directors, so as per section 106 of the companies act,
The company may by extraordinary resolution remove any share-holder director before the
expiration of his period of office.

Sec. 87 of the Companies Act, 1994]. Special resolution is necessary to alter the Articles of the
company.

We advise the parties concerned to pass special resolution to alter the Articles of the company
and the proposed change to the articles is legally enforceable upon passing resolution and it
can be used to force fred to sell his shares.

Answer to Question No. Two (a) The methods of appointing a director of a company is largely
governed by its articles of association following the provisions on appointment of directors is
described in the Section 91 & 92 of the Act. The procedures for appointment of directors are as
follows:
1. Appointment of First Directors: Where the directors have not been named in the articles
and subject to the provision for appointment of directors therein, the subscribers of the
memorandum of association shall be deemed to be the first directors of the company
until the directors are appointed in a general meeting. [Section 91 (1) a]
Companies Act 1994, Section 92 imposed the following restrictions on appointment of
directors’:
i. Consent in writing by persons to act as directors must be filed with the registrar.
ii. Contracts of directors to take qualification shares must be filed with the registrar, or
sign the memorandum of association by taking qualification shares.
iii. A signed consent to act as director should accompany the proposal for directorship to the
company.
2. Appointment of Directors by Shareholders: The shareholders appoint the directors in
general meeting. [Section 91 (1) b] This appointment process is described in the articles.
At the first general meeting of the company, the whole of the directors shall retire from
office and at the general meeting in every subsequent year One-third (⅓) of the
directors shall retire from office.
3. Appointment of Directors by Board of Directors: According to Companies Act 1994,
Section 91 (1), the other directors may fill up any casual vacancy occurring among the
directors. The person so appointed shall be subject to retirement at the same time as if
he had become a director on the day on which the director in whose place he is
appointed was last appointed a director. The appointment of director as an addition to
the Board, or in casual vacancy with consequential provisions must be there in the
articles of association of the company.
4. Appointment of Directors by Managing Agent: Managing agent can appoint a director if so
authorized by its articles of a company. The directors appointed by the managing agent shall
not exceed in number One-third (⅓) of whole number of directors.

5. Appointment of Directors by Government: Government can appoint the director in case of

Statutory Company and Government Company. Sometimes government appoints the directors
to protect minority interest due to application of minority shareholders. Directors appointed by
Government do not need to purchase any qualification share.

6. Appointment of Directors by Third Parties: According to resolution of articles of association

the third party such as debenture holder, financing institution etc. can appoint the directors. If
there is the provision in the articles for appointment of directors by third parties, it cannot be
altered. So the third parties have the right to appoint their nominated person as director in the
board of directors of the company.

A director may vacate/lose their office as director due to: resignation; not going for re-
election; death; dissolution of the company; removal; disqualification.
A director may leave/lose office in the following ways.
Resignation
Not offering themselves for re-election when their term of office ends
Death
Dissolution of the company
Being removed from office
Being disqualified
- he absents himself from three consecutive meeting of the directors or from all meetings of the
directors for a continuous period of three months, whichever is the longer, without leave of
absent from the Board of Directors;
-acting beyond authorization/sanction of board of directors.
A form should be filed with the Registrar whenever and however a director vacates office.

106. Removal of directors--(1) The company may be extraordinary resolution remove any share-
holder director before the expiration of his period of office and may by ordinary resolution
appoint another person in his stead and the person so appointed shall be subject to retirement
at the same time as if he had become a director on the day on which the director in whose
place he is appointed was last elected director. (2) A director so removed shall not be re-
appointed a director by the Board of Directors.

(b) Directors as trustees: Directors can be considered as trustee of the company. The
shareholders appoint the directors with the powers and duties to manage the business of the
company. The conducts of the directors are supposed to be governed by the articles of
association of the company. First of all directors are trustees as regards the property of the
company which come into their hands or under their controls. Although directors are not
properly speaking trustees, yet they have always been considered and treated as trustees of
money, which comes to their hands. Second, directors are trustees in case of use the power of
the company. They work for the company interest and not for their personal interest.

Directors as Agent

A company is an artificial being, invisible, intangible and existing only in contemplation of law.
So it needs visible organs to make it work. Hence the directors are needed to run a company
business. So in the legal point of view they are the appointed agents of the company. I. The
directors are the agent of a company. Any contracts entered into by directors on behalf of the
company will not bind him personally. But he does not act beyond his capacity and authority
mentioned in the memorandum and articles. If he enters into contracts in his own name
without disclosing that he is acting on behalf of the company, he is personally liable for this. II.
Directors are personally liable for any contracts on behalf of the company without addition of
the word ‘limited’ at the end of its name. So in the legal point of view directors are agent for
the company.

How a director can be appointed for a casual vacancy:

MANDATORY REQUIREMENTS FOR FILLING THE CASUAL VACANCY IN THE OFFICE OF DIRECTOR:
Board can fill a casual vacancy only in respect of Directors appointed in a General Meeting, if
the office of such Director is vacated before the expiry of his term as Director in normal course.
If a term of a Director expires because of either retirement by rotation or otherwise it cannot
be treated as a casual vacancy.
Power to appoint a Director in casual vacancy can be exercised by the Board of Directors,
subject to the regulations of the Articles of the Company.
Power to appoint a Director in casual vacancy can be exercised by the Board of Directors only
by passing resolution at Board Meeting and not by circulation.
A person appointed as a Director in casual vacancy shall hold office only up to the date up to
which the Director in whose place he is appointed would have held office, if it had not been
vacated.
The individual proposed to be appointed as Director to fill a casual vacancy does not suffer from
any disqualification mentioned in the Company Act.
If the casual vacancy is in respect of Independent Director, then the person proposed to be
appointed as the Director in casual vacancy also fulfills the conditions mentioned in the
Company Act, in respect of Independent Director.

THE FOLLOWING PROCEDURE IS TO BE FOLLOWED FOR “FILLING CASUAL VACANCY IN THE OFFICE OF
DIRECTOR”
Director shall be appointed by two ways to fill the Casual Vacancy:
By appointing an Additional Director by the Board, OR
By appointing a Director by the Members of the Company in General Meeting.
Official Liquidator: An official liquidator is a senior official who is appointed by the court and
undertakes all the responsibilities to the process of winding up according to the instructions of
the high court till is dissolute. Section 255 deals with the appointment of official liquidator for
the purpose of conducting the proceedings in winding up a company and performing such
duties in reference thereto as the Court may impose.

The power of an official liquidator is of two types. One is directed and empowered by the court
and other is the virtue of the position as follows:
1. Sue on behalf of the company.
2. Make agreement on behalf of the company.
3. Take loan on behalf of the company
4. Continue business on the company.
5. Sell any property of the company.
6. Honour any contract of the company before dissolution.

As per Section 262. Powers of official liquidator-- The official liquidator shall have power with
the sanction of the Court, to do the following things—
(a) to institute or defend any civil suit or criminal prosecution in the name of or on behalf of the
company;
(b) to carry on the business of the company so far as may be necessary, for the beneficial
winding up of the same,
(c) to sell the immovable and movable property of the company by public auction on private
contract.
(d) to do all acts and to execute, in the name of and on behalf of the company, all deeds,
receipts, and other documents, and for that purpose to use, when necessary the company's
common seal;
(e) to prove, rank and claim in the insolvency of any contributory, for any balance against his
estate, and to receive dividends in the insolvency in respect of that balance, as a separate debt
due from the insolvent, and rateably with the other separate creditors;
(f) to draw, accept, make and endorse any bill of exchange, hundi or promissory note in the
name of or on behalf of the company.
(g) to raise on the security of the assets of the company any more requisite;
h) to take out, in his official name, letters of administration to any deceased contributory, and
to do in his official name any other act necessary for obtaining payment of any money due from
a contributory or his estate which cannot be conveniently done in the name of the company. –
mafizul islam
(i) to do all such other things as may be necessary for winding up the affairs of the company and
distributing its assets.

263. Limit of Discretion of official liquidator.- The Court may provide by any order that the
official liquidator may exercise any of the above powers without the sanction or intervention of
the Court, and, where an official liquidator is provisionally appointed, may limit and restrict his
powers by the order appointing him.
Duties of official liquidator: The official liquidator has the following duties to perform:
1. The liquidator shall conduct the proceedings in winding up the company.
2. The liquidator shall keep proper books of accounts and also minute books in which the
minutes of proceeding at meetings must be entered. Section 265
3. He must submit to the court not less than twice a year during his tenure of office an
account of his receipts and payments as such liquidator. Section 265
4. The liquidator is to make a list of creditors.
5. Under section 266 the liquidator is to summon general meetings of creditors and
contributories in order to find out their wishes.
6. He must prepare a list of contributories liable to make contribution towards the assets
of the company.
7. He must collect the assets of the company and pay the claims of the creditors’ prorata.
If the assets are sufficient to pay all the creditors, the left balance is to be distributed
among the contributories according to their rights.
8. Within one month from the date of the order for the winding up of a company, the
official liquidator must convene a meeting of the creditors in order to determine
whether a committee of inspection is to be appointed.
9. The official liquidator submit to the court a preliminary report as soon as practicable
after the date of the order

 As to the amount of capital issued, subscribed and paid up, and the estimated amount
of assets and liabilities.

Minutes- The term ‘minutes’ means the written record of the proceedings of every general
meeting and of every meeting of its Board of Directors. Sec. 89 of the Companies Act, 1994
deals with minutes.

Minute is the official records of the proceedings of the meeting. It is a summary or record what
is said or decided at a formal meeting of board of directors or shareholders of the company.
The object of keeping minutes is to preserve an accurate copy of office documents of the
proceeding of the meeting.

Rules regarding minutes:

1. Obligation to keep minutes 2. Signature and evidence 3. Inspection of the minutes 4.
Having copies of minutes by the members 5. Defamatory land irrelevant matters to be
excluded 6. Prima facie evidence.

Resolution: The proposal which is voted at the meeting and accepted by the members is termed
as resolution.

Resolutions: For the transaction of the business at the meeting, at first a proposal is presented
before the board of its decision, and when the proposal is accepted by the members present at
the meeting by means of votes, it is called resolution. In other words, the proposals are
accepted at the meeting in accordance with the agenda, it is called resolution. The list of items
to be discussed at any meeting is called the agenda.

Resolutions passed by a company are of three kinds. They are:

Ordinary Resolution: Ordinary resolution means the resolution which is passed by ‘simple
majority’ of members (entitled to vote either in person or by proxy) at a general meeting is
called the ordinary resolution. The term ‘simple majority’ denotes to the situation where the
votes cast in favour of the resolution are more than the votes cast against the resolution. Such a
resolution is passed in the ordinary way and deals with ordinary business such as passing of
accounts, appointing directors and so on. Unless required by the Articles, no notice of such
resolutions need be given.

Extraordinary resolution: A resolution is termed as an extraordinary resolution when it has been

passed by a majority of not less than three fourths of such members (entitled to vote either in
person or by proxy) at a general meeting. Such meeting being convened by notice specifying
the intention to propose the resolution as an extraordinary resolution has been duly given.
[Sec. 87 of the Companies Act, 1994] Unless so required by the Articles it is not necessary that
all extraordinary business must be conducted by extraordinary resolution. The voluntary
winding up of a company by shareholders is usually done by extraordinary resolution. The
articles generally provide that directors be removed by an extraordinary resolution.

Special resolution: Special resolution means the resolution which is passed by ‘special majority’
of the members i.e., by the support of 3/4th majority of the members present and entitled to
vote at a general meeting. For the purpose of such a resolution, at least a twenty one day’s
notice is required to be given to the members specifying the intention to propose the resolution
as a special resolution. [Sec. 87 of the Companies Act, 1994]. Special resolution is necessary for
the following purposes among others:
a. To alter the Articles of the company
b. To alter the memorandum with the leave of the court
c. To change the name of the company
d. To reduce the capital of the company with the leave of the court.
Copies of special resolutions must be sent to the registrar within fifteen days from the date
of their adoption.

Special notice: A special notice is the notice of an intention to move a 'resolution', as may be

required under the provisions contained in the Companies Act or in the articles of a company,
given to the company in writing.

Special notice must be given by member/shareholders to a company of the intention to put

certain types of resolution at a company meeting for any of the following purpose:
 To remove an auditor or to appoint an auditor other than the auditor who was appointed at
the previous year's meeting
 To remove a director from office or to appoint a substitute in their place after removal
Form XII Particulars of the Directors, manager and managing Agents and of any changes therein
COMPANIES Act 1994 (section 115)

Schedule X - Annual summary of share capital and list of shareholders, Directors: to be filed
within 21 days of AGM [Section 36]

(e) Insider Trading: Insider trading is the buying or selling of a publicly traded company's stock
by someone who has non-public, material information about that stock. It is the illegal practice
of trading on the stock exchange to one's own advantage through having access to confidential
information. Illegal insider trading is when the insiders want to benefit from the company
information at the cost of the company. Legal insider trading is when the insiders of the
company trade shares but at the same time report the trade to the Securities and Exchanges
Commission (SEC).

Examples of insider trading that are legal include: A CEO of a corporation buys 1,000 shares of
stock in the corporation. The trade is reported to the Securities and Exchange Commission. An
employee of a corporation exercises his stock options and buys 500 shares of stock in the
company that he works for.

Alternative forms and constitutions of business organizations:

Alternative forms:
• Sole traders (one man business, no sharing of liability, no formalities involved)
• Partnership (based on agreement between the partners, less formalities involved, good for
small business, liability unlimited)
• Company business (Limited liability, formalities involved, good for big/large scale business,
corporate personality.)
Distinguish between alternative forms:
Sole traders Partnership Company

Definition: A sole trader Section 4 of the partnership An association of a number of

owns and runs a business. act 1932, “Partnership is the persons formed for some common
They contribute capital to relationship between persons purpose and registered under the
start the enterprise, run it who have agreed to share the company act 1994.
with or without employees, profits of a business carried
and earn the profits or stand on by all or any of them
the losses of the venture. acting for all.

The concept of separate legal A partnership is not a A company has a legal personality
personality: In a sole separate legal person distinct separate or distinct from its
tradership, there is no legal from its members; it is members and the individuals
distinction between the merely a 'relation' between composing it.
individual and the business. persons. Each partner (there
In law, the person and the must be at least two) is
business are viewed as the personally liable for all the
same entity. debts of the firm.

Formation: Merely a person There must be at least two to Private Company incorporates with
forms it. form. Partnership cannot be more than two persons and it is
formed with more than 10 limited to fifty members.
persons in banking and Public company is formed with a
twenty persons in other minimum of seven members and
types of business. maximum is unlimited, and
members called share holders. Here
the liability is limited up to level of
what he is invested

Kinds: There are no kinds. Partnership can be classified The companies act provides for two
as:1. Partnership at will, 2. types of companies-Public company
Particular partnership, 3. and private company.
Limited partnership-no such
provision in Bangladesh.

Constitution of business organizations:

Sole tradership: a person can form this business by taking trade license from local authority.
Partnership: Partnership can be constituted under the partnership act 1932. There must be an
agreement (express or implied) between two or more persons. Where there is no agreement,
there is no partnership. A firm or partnership can be registered with RJSC (The registrar of
firms). The registration of a partnership is not compulsory.
Company: company formed and registered under the company act 1994.

Compare the types of capital and financing of companies:

The capital of a company means the amount of money which is authorized by its memorandum
to raise, generally by the issue of shares. Hence a company’s capital is also called share capital.
The term capital in connection with company formation may mean the following things:

Nominal or authorized capital: This means the whole capital of the company which is
authorized by its Memorandum to raise for the purpose of investment and expenditure.

Issued capital: is that part of authorized capital which is actually offered to the public for sale.

Subscribed capital: is that part of issued capital which is taken up and accepted by the public.
Paid up capital: The portion of the subscribed capital which is actually paid up by those who
have taken them is known as the paid up capital. And the portion of the subscribed capital
which remains unpaid is known as the uncalled capital. The shareholders may be called upon to
pay this portion of subscribed capital whenever occasion arises.

Generally the types of financing available to company are share capital and loan capital. The
company should make responsible choices when seeking financing options for a company’s
continued growth.

Distinguish loan capital from share capital:

Share Capital: it can be composed of both common/ordinary and preferred shares, funds are
raised by issuing these shares in return for cash or other assets. It is equity financing, the
company pays dividends to shareholders at certain percentage if she is able to pay due to good
financial position. Here shareholders are one of the owners of the company.

Loan Capital: it is short term or long term liabilities, which have end date and annul interest
payments funds, are raised by issuing for example debentures against these funds company has
to pay the amount of the interest annually to debenture holders and principle amount at
maturity date.

Define the right of shareholders regarding divided:

A dividend is a payment a company can make to shareholders if it has made a profit. A company
must not pay out more in dividends than its available profits from current and previous
financial years. It must usually pay dividends to all shareholders.

If a company's board of directors declares a dividend in a certain period, common shareholders

are in line to receive it. Dividends are not guaranteed, however. If the company is liquidated,
common shareholders have the right to assets and income of the company after bondholders
and preferred shareholders are paid.

Specify the power and role of Board of Directors: Directors are persons elected by the
shareholders from among themselves for the purpose of managing the business of the
company. The directors are collectively called the board of directors. Section 90 (1) of the
companies act requires that every public company shall have at least three directors. This rule
does not apply to a private company except where a private company is a subsidiary company
of a public company.

Directors are empowered to act on a company's behalf by: the company's articles of
association, common law i.e. provisions of the companies act and certain resolutions of its
members.
The board of directors can exercise the following powers and play role by passing resolution in
the meetings of the board:
-Make calls on shareholders.
-Issue securities and shares
-Borrow monies
-Investing the funds
-Approve the financial statement.
-Diversify the business.

Difference between managing director and directors of the company:

Section 2(m) of the companies act- "managing director" means a director who, by virtue of an
agreement with the company or of a resolution passed by the company in its general meeting
or by its directors or by virtue of its memorandum or articles of association, is entrusted with
the substantial powers of management. A managing director or chief executive officer is
appointed and generally reports to a company's board of directors. By comparison, a company
director is a member of a board that serves as the governing body for an organization. Typically,
shareholders of a corporation elect or appoint board members.

A managing director of a company shall exercise his powers subject to the superintendent
control and direction of the directors.

Discuss how company secretary play a vital role to comply legal matters of the companies:

According to Bangladesh Securities and Exchange Commission (BSEC) all the listed companies
should have a Company Secretary. Company Secretary is  the compliance officer of the
company, who has to interact, coordinate, integrate and co-operate with various other
functional heads in a company.
The overall role of the company secretary can be divided into three (3) types:
1. Role of company secretary before incorporation.
2. Role of company secretary after incorporation.
3. Routine Role of the company secretary.
Role of company secretary before incorporation
Here the company secretary performs the following functions related to incorporation:
1. Make arrangement of meeting for the promoters.
2. Submitting necessary forms and documents to the registrar of the joint-stock company
for getting a certificate of incorporation, Prepare Memorandum and Articles of
Association as per company Act 1994.

Role of company secretary after incorporation

Here the company secretary requires performing the below functions:

1. Arrange meeting for the board of directors.
2. Prepare and circulate prospectus.

3. Collecting certificate of commencement from the registrar of a joint-stock company,

 4. Arrange statutory meeting, prepare statutory report, and file the copy of such report
with the registrar of the company.

Routine Role of company secretary:

Such functions are regular in nature towards the following stakeholders:
1. Functions towards Company: These functions are set as per company Act 1994, and
other related laws, which are:
-Comply with the rules of the company Act 1994; stamp Act and Income Tax Act.
-Sign the Annual Report.
-Maintenance of statutory books or different registers of the company.
-Preparation, validation, and filing of resolutions, agreements, documents, notices, and
various returns with the company Registrar.
-Attending the meetings and record their proceedings.
-Keep the common seal in safe custody.
 2.Role/functions towards directors: Company secretary performs as a spokesman of the board
of directors such as:
 Make sure that all actions of the board of directors are in accordance with the
company’s memorandum and articles of association.
 Deal with the correspondence as per instruction from the directors.

 Provide necessary advice and information to the board to formulate company policy.

 Arrange board meetings, issuing notice, and preparing the agenda of such meetings,
also recording the minutes and resolutions of the meeting.

 Draft the director’s report and presenting it in the annual general meeting in favor of
the directors.
3. Role towards shareholders: The company secretary executes the following functions for
shareholders:
 Circulate prospectus, invite and receive share application. Issue allotment letter and
share – certificates and arrange distribution of dividend warrants to the shareholders.
 Sending notice and agenda to the ‘shareholders for their respective meetings and make
arrangements to hold the meeting.

 Record the proceedings of the meeting in the minute’s book.

 Allowing shareholders to inspect various books and registers as permissible under the
company Act 1994.

 Communicate the decisions of the board of directors to the shareholders and deal with
the query and complaints of the shareholders.

 Protect the interest of the shareholders.

4. role/functions related to meeting: Company secretary plays an important role to hold a
various meeting, such as:

 Select the appropriate place for the meeting.

 Sending notice and agenda of the meeting to the participant.

 Examining the proxy form.

 Announcing the agenda before the meeting.

 Assist the chairman to conduct the meeting.

 Record and maintain the minutes of the meeting.

5. Role/functions as a liaison officer: As a liaison officer, a company secretary has to:

 Maintain liaison between the board of directors and various employees of the company,

 Ensure link between company and stakeholders like shareholders and creditors,

 Circulate orders or instructions at various levels of the company and escalate insights &
opinions to the top level.

6. Roles/functions as an administrative officer: company secretary is a high profile

administrative officer of the company and therefore he needs to:
-Supervise and coordinate the activity of various departments like share department,
correspondence department, accounts department, filings record department, etc.
-Act like a friend and guide to the staff and ensure equal opportunity for all.
-Handle with query complaints of the staff.

The company secretary is responsible for the efficient administration of a company,

particularly with regard to ensuring compliance with statutory and regulatory
requirements and for ensuring that decisions of the board of directors are implemented.
Despite the name, the role is not clerical or secretarial.

Company audit: company is the artificial being which separate entity from the owner or
management. At the end of the period company’s financial statement must be
submitted to the user after proper examination by the auditor. When an auditor apply
auditing activities to examine the statement in order to give expert opinion thereon
such types of auditing activities are called company audit. Under section 183 (3) of the
companies act 1994, the balance sheet and the profit and loss account shall be caused
to be audited by the auditor of the company as in this Act provided and the auditor's
report shall be attached thereto or and the report shall be read before the company in
general meeting.

Appointment of auditor: According to the company act 1994, section 183(3), every
company must appoint an auditor or auditors to audit its accounts. The appointment of
auditors of a company is made according to the provisions of various sections of the
companies act 1994 which are explained below:

a. First auditor (section 210 (6): The first auditor or auditors of a company shall be
appointed by the Board of Directors within one months of the date of
Registration of the company, and the auditor or auditors so appointed shall hold
office until the conclusion of the first annual general meeting:

Provided that- (a) the company may, at a general meeting remove any such
auditor or auditors and appoint in his or their place any other persons or persons
who have been nominated for appointment by any member of the company and
(b) if the Board of Directors fails to exercise its powers under this sub-section,
the company in a general meeting, may appoint the first auditor or auditors.

b. Subsequent auditor: Auditors are appointed in the AGM by the shareholders. as

per section 210 (1), Every company shall, at each annual general meeting
appoint an auditor or auditors to hold office from the conclusion of that meeting
until the next annual general meeting.
Provided that no person can be appointed auditor of any company unless his
written consent has been obtained prior to such appointment or re-
appointment.

c. Appointment of auditor by govt.: as per section 210 (4) and 210 (5), if an
appointment of an auditor is not made at an annual general meeting, the
Government may appoint a person to fill the vacancy.

d. Appointment of auditor in case of casual vacancy (section 210 (7): The directors
may appoint auditor in case of casual vacancy. The Board may fill any casual
vacancy in the office of any auditor, but while any such vacancy continues, the
remaining auditor or auditors, if any, may act. Any auditor appointed in a causal
vacancy shall hold office until the conclusion of the next annual general meeting.
When a vacancy has been caused by the resignation of the auditor, it shall be
filled only by the general meeting.

e. Reappointment of the retiring auditor (under section 210(3): At any annual

general meeting a retiring auditor, by whatsoever authority appointed, shall be
reappointed, if he is qualified for re-appointment; or if he has consent to be re-
appointed; or (c) if a resolution has not been passed at that meeting appointing
somebody else instead of the retiring auditor.
 f. Appointment of auditor by a public limited company: The public limited company
enlisted with any stock exchange shall appoint a partnership firm of chartered
accountants in practice for a minimum of seven years.

Appointment of auditor in AGM:

Sl no. Appointment of auditor in AGM

1 Intimation for appointment by company to auditors-Date of such intimation will be

before the date of board meeting.

2 Written consent by auditors to company

3 Auditors are appointed in the AGM by the shareholders.

4 Intimation to auditor so appointed within seven days of the appointment.

5 Appointed auditor will inform to the register in writing his acceptance within thirty
days from the date of receipt of appointment.
Power or rights of an auditor: An auditor to perform his duties must have certain powers and
rights without which it may not be possible for him to perform his duties honestly:
1. Access to the books, accounts and vouchers (as per section 213(1)
2. Obtaining information and explanations (as per section 213(2)
3. Inquiring into particular issues
4. Receiving notice and attending the general meeting as per section 217 (1)
5. Reporting at the general meeting as per section 213 (3)
6. Visiting branches and access to the branch account. Section 214 (1)
7. Signing the audit report.
8. Receiving remuneration.
Role and Duties of an auditor: auditing of financial statements of companies registered under
the Companies Act 1994 is compulsory in Bangladesh.
1. According to section 213 (3), the auditor is to make a report to be presented in the
annual general meeting of the company on accounts examined by him and on every
financial statement during his tenure. The main duty of an auditor is to submit the real
and reliable financial position of the company.
2. Duty to assist investigations: The duty of an auditor is to assist the inspectors in every
possible way when the affairs of the company are being investigated.
3. Duty to certify the statutory report: auditor has to certify the correctness of the
statutory report with regard to: a. the number of shares which have been allocated by
the company whether against cash or other than cash. b. the total amount of cash
received by the company in respect of all the shares allocated.
4. To report for prospectus: duty to certify profit and loss account and a statement of asset
and liabilities of the company in a prospectus.
5. Duty to comply with audit standard.
 6. Duty to report fraud.
7. To certify director’s declaration of solvency.
8. To inquire into particular issues: Enquiry on loans and advances, transactions in book
entries, assets and liabilities of the company, regarding shares and debentures,
personal/business expenses.
9. Duty to attend audit committee meetings.

Describe the rules and procedure for conducting general meeting: Annual General meeting is a
mandatory yearly gathering between the company’s shareholders and directors where they interact for
the purpose of company’s annual reports, audit reports, audit remunerations and so on.
There are few procedures should be taken in terms of arranging an Annual General Meeting and they
are given below:
Who can convene meetings: the meetings of a company are usually called by directors. If the articles of
the company do not make provision in this behalf:-- (a) two or more members holding not less than one-
tenth of the total share capital paid-up or, if the company has not a share capital, not less than five
percent in number of the members of the company may call a meeting.

1. Timing: A company has to hold its annual general meeting within eighteen months from the
date of its incorporation and thereafter once at least in every calendar year and not more than
fifteen months after the holding of the last preceding general meeting.
2. Notice: An annual general meeting can be called within fourteen days of notice in writing. A
meeting for the passing of a special resolution can be called within twenty one days of notice.
The notice of AGM is to be served on every shareholder. The notice must be sufficient to show
the members substantially the object of the meeting.
3. Quorum: The term quorum has been defined as the minimum number of members which must
be present for the proper and valid transaction of any meeting. In the case of a company, the
quorum for the meetings of shareholders is usually fixed by the articles. Where the articles do
not make any provision for the same, the quorum of a Public company is made up of five
members and of a Private company by two members, all being personally present in the
meeting.
4. Documents: Documents which must be presented in the Annual General Meeting are
Company’s annual financial report, Auditor’s report and Director’s report.
5. Chairman: The articles of a company generally provide as to who shall preside over each
meeting. Where no such provision is made by the articles, each meeting chooses its own
chairman. The chairman of a meeting is entitled to exercise the following powers:
 To maintain order and conduct the meeting properly.
 To declare the result of a vote taken by show of hands.
 To adjourn the meeting at his discretion if a case for adjournment has arisen.
 If provided by the Articles, to exercise a casting vote in addition to his ordinary vote.
  To decide points of order and at anytime to take a vote of the majority on the question whether
the discussion shall stop.
 The chair of an AGM will give a flow to the shareholders to ask questions regarding company’s
management, the remuneration report, and to auditors.
6. Voting: In the case of a company limited by shares every member has one vote in respect of
each share.
7. Poll: As a general rule, all questions in a meeting are decided by the show of hands. Where
voting by show of hands is considered unsatisfactory, a poll may be demanded.
8. Audit: The shareholders can ask any questions in written related to company’s issues at least
five days before the AGM or at the time of the meeting. They must send their questions to the
board of directors and if it is related to company’s matters then the company will forward it to
the company’s auditor. The company’s auditor is entitled to attend the annual general meeting
too and answer all the questionnaires.
9. Registration of copies of special and extra ordinary resolution: A copy of resolution shall be
printed and duly certified under the signature of any authorized person and submitted it to the
Registrar to record the same within fifteen days from passing thereof.
Penalty for delaying to hold AGM

If default is made in terms of holding the annual general meeting in prescribed time in accordance sub-
section (1) and (2) of section 81 of the Companies Act, 1994, the person and company who is liable for
the default will be punishable with fine which may extend to ten thousand taka and in a case of
continuing the default, it will be two hundred fifty taka every day after the first day during such default
continues.

Different types of meetings conducted in the company:

Statutory meeting: Every company limited by shares and every company limited by guarantee and
having a share capital shall, within a period of not less than one month and not more than six months
from the date at which the company is entitled to commence business, hold a general meeting of the
members of the company; in this Act such meeting is referred to as "the statuary meeting".

Statutory meeting means the first meeting of the members of the company after its incorporation which
is held within 6 months from the date at which the company is entitled to commence its business.
According to Sec. 83 of the Companies Act, 1994, this type of meetings must be held within 6 months
from the date of incorporation.

Notice of meeting: The directors will send a notice of the meeting to all the members of the company at
least 21 days before the meeting. Also send a copy of statutory report to the shareholders.

Purpose of Statutory meeting: to win confidence, to provide latest information, to discuss future plans,
to discuss statutory report: total number of shares issued, total receipts and payments, cash received
against shares allocated, details of the shares allocated.

Annual General Meeting (AGM) It is the regular meeting of the members of the company which must
be held once in each year in addition to any other meetings. Sec. 81 of the Companies Act, 1994 deals
with AGM. A company has to hold its annual general meeting within eighteen months from the date of
its incorporation and thereafter once at least in every calendar year and not more than fifteen months
after the holding of the last preceding general meeting.
An annual general meeting can be called within fourteen days of notice in writing. A meeting for the
passing of a special resolution can be called within twenty one days of notice. The notice of AGM is to be
served on every shareholder. The notice must be sufficient to show the members substantially the
object of the meeting.
Purpose of annual general meeting:
 To receive and consider the director’s and auditors reports
 To sanction or declaration of the dividend recommended by the directors
 To appoint or re-appoint the directors
 To appoint or re-appoint the auditors and fix their remuneration.

Extra-ordinary General Meeting: The meeting which is called for dealing with some urgent special
business is called the ‘extra-ordinary general meeting’. The statutory and annual general meetings
cannot be regarded as the extra-ordinary general meetings. As per Sec. 84 of the Companies Act, 1994,
the requisition of the holders of not less than 1/10th of the issued share capital of the company is a
must for calling an ‘extra-ordinary general meeting’.

This meeting is held on the special occasion and in the emergency situation.

The directors will send a notice of the meeting to all the members of the company at least 21 days
before the meeting. The Board of directors may call an extraordinary general meeting On its own and On
the requisition of the members.

The rule and procedure of EGM:

The members/shareholders of a company can call for an extraordinary general meeting. However, only
certain members with a significant stake in the company are allowed to call for an EGM.
In the case of a company having a share capital, members holding not less than one-tenth of such paid-
up capital of the company that carry voting rights in regard to that matter as on the date of depositing
the requisition;
In the case of a company not having a share capital, members holding not less than one-tenth of the
total voting power in regard to that matter as at the date of deposit of the requisition.
EGM called by Board: Upon the receive of a valid requisition, the Board has a period of 21 days to call for
an EGM. The EGM must be then held with 45 days from the day of the EGM being called.
EGM called by the requisitionists – In case the Board fails to call for an EGM, it can be called for by the
requisitionists themselves during a period of 3 months from the day the requisition was deposited. If the
EGM is held within this specified period of 3 months, it can be adjourned to any day in the future after
the 3 months.

Director’s meeting: The board of directors generally conduct a board meeting to make company’s
decision, frame the general policy of the company, directs its affairs, appoints the company officers, and
ensure that they carry out their duties and recommend to the shareholders regarding distribution of
dividend. Board of directors will hold the responsibility for the overall success and failure of the
corporation.

Special meeting: For any special situation, when the meeting is arranged by the company, it is called
special meeting. It is called by a majority of the directors for a particular purpose.

Class meeting: the company has different kinds of shares. When the meeting is arranged by any one kind
of shareholders it is called class meeting.

Creditors meeting: The directors may invite this type of meeting or may be arranged by the order of the
court. In case of dissolve or amalgamate the company, this type of meeting is invited to preserve the
rights of the creditor.

Power and duties of receivers: The official receiver is an officer of the court. They are appointed as
liquidator of any company ordered to be wound up by the court.
Power of receivers:
 extend to taking control of the company's property.
 the official receiver shall be entitled so such remuneration as the Court shall fix.
 On the making of a winding up order by the court the official receiver shall become the official
liquidator of the company and shall continue to act as such until his further continuance is
terminated by an order of the Court.
 The official receiver shall, as the official liquidator, take into his custody and control all the
books, documents of the company.
Duties:
-The official receiver must investigate:  The causes of the failure of the company, and  Generally the
promotion, formation, business dealings and affairs of the company.
-The official receiver decide whether or not to convene separate meetings of creditors. The meetings
provide the creditors with the opportunity to appoint their own nominee as permanent liquidator to
replace the official receiver.
-the official receiver may continue to act as liquidator, If no liquidator is appointed by the creditors.
-The official receiver report to the court on the grounds of winding up of company.

What is Liquidation or Winding up a Company? And how a Liquidation or winding up works?

Winding up is the process of dissolving a company. A business organisation stops doing business when it
winds up. Its conventional aims are to sell off stock, pay off creditors and transfer to shareholders any
remaining assets.
A receiver may be designated to control such asset distribution (known as “Liquidator”) process.

Winding up a business is a legal process regulated by company laws of Bangladesh as well as a

company’s AoA (Articles of association). Winding up can be compulsory or voluntary and can apply to
publicly and privately held companies. (Liquidation or Winding up a company in Bangladesh)

Section 234-321 of the companies Act 1994 deals with winding up of the company. Winding up
represents the last stage in company life. It’s a proceeding by which a company is dissolved.
Winding up may be defined as the process by which the life of a company is ended in the course of
such dissolution its assets are collected, its debts are paid off out of the assets of the company and
transfer to shareholders any remaining assets.

There are three modes of winding up a company in Bangladesh. The winding up of a company may be
either:
a)Compulsory winding up by the court or
b) voluntary winding up
c) voluntary winding up under the supervision of the court.

Who can file the petition of winding up in Bangladesh?

A petition for winding up can be filed by: under section 245 of the Companies Act 1994
1. Creditor or,
2. the Company (i.e. shareholders) or
3. Contributory (who contributes to a companies’ assets in paying the debts and costs of the company),
together or separately

 Section 237 describes the term contributory; it means that in case of wound up each individual is liable
to contribute to the assets of a corporation. (For  Liquidation or Winding up a company in Bangladesh)

Winding Up by the Court: under section 241 of the companies act, a company may be wound up by the
court.
Winding Up of a company by court may be done in certain circumstances which are:
i. if the company through the special resolution decided that it must be winded up by the court;
ii. if default is made in filling the statutory report or in holding the statutory meeting;
iii. if the company does not commence its business within a year from its incorporation or suspends its
business for a whole year.
iv. if the number of members/shareholders is reduced, in the case of a private company below two or in
the case of public company below seven.
v. if the company is incapable of paying its debts;

Voluntarily winding up: under section 286 of the companies act, a company may be wound up
voluntarily:
i. when the period, if any, fixed for the duration of the company by the articles expires or any event
occurs for which the articles provides that the company is to be dissolved and the company in general
meeting has passed an ordinary resolution requiring the company for winding up voluntarily;
ii. if the company has, for any reason whatsoever, passed a special resolution to wind up voluntarily; or,
iii. if the company resolves by extraordinary resolution to the effect that it cannot continue its business
by reason of its liabilities, and that it is advisable to wind up voluntarily.

Voluntary winding up under the supervision of the court: When a company has by special or
extraordinary resolution resolved to wind up voluntarily, the court may make an order that the
voluntary winding up shall continue but subject to supervision of court and such terms as the court
thinks fit.
The process of winding up by court has been discussed very briefly in order to give an idea of the
process.
Step one: Filing Petition to Court:
In order to wind up a company by the court, a petition has to be filled in the court either by the
company or by one or more of the creditors or by a contributor . It is to be noted that winding up of a
company by the court shall be deemed to commence from the time of presentation of petition for
winding up. Upon hearing the application the court will pass an order for winding up of the company.

Step two: Notification to registrar

In issuing a winding-up order, it is the duty of the petitioner and of the company to file with the
Registrar a copy of the order within 30 (thirty) days from the date of the order. On the filing of a copy of
a winding up order, the Registrar shall register a summary in his books relating to the company.
Step three: Appointment of Liquidator
The court will then appoint an official liquidator and the liquidator will perform its duties as per the
Companies Act 1994. In case of winding up by the court, all the property and effects of the company
shall be deemed to be in the custody of the Court as from the date of the order for the winding up of the
company.

Step four: Information recorded with RJSC

When the affairs of a company have been completely wound up, the Court shall make an order that the
company be dissolved from the date of the order, and the company shall be dissolved accordingly. The
order shall be reported to the registrar by the official liquidator within 15 (fifteen) days of the order. The
registrar shall record in his books a minute of the dissolution of the company.

Steps by Step process of voluntary Winding Up: This is the liquidator ‘s responsibility in any voluntary
winding-up to settle the company’s debts and change the creditors’ right among themselves. Here is the
comprehensive step-by – step method of voluntary wind-up of a bangladesh company.
Step One: Drafting documents for Winding Up: The first step on the process of winding up is to prepare
documents. The documents that need to be prepared are:
-Declaration of Solvency, (which includes information such as the company has no debts among other
things) and
-Profit and Loss Account and
-Audited Balance. 
The above mentioned documents will have to be approved by the majority directors of the company.
b) Step Two: Submission to RJSC
The next step is to file the approved Declaration of Solvency to the RJSC within 5 (five) weeks from the
approval by directors.
c) Step Three: Pass Special Resolution
Step three requires to pass a special resolution through the extraordinary general meeting. This is to
approve the decision of winding of the company and the appointment of the liquidator. It is to be noted
that the content of the meeting will also be filed to the RJSC. Thereafter, the special resolution must be
advertised in the official Gazette, and in a newspaper circulating in the district where the registered
office of the company is located. Such must be done within 10 (ten) days of its passing the special
resolution.
d) Step Four: Appointing Liquidator
Once the chosen liquidator has been approved by the extraordinary general meeting and the liquidator
has accepted the appointment, such must be notified to the RJSC. In addition, the Deputy Commissioner
of Taxes will also be informed of the same within 30 (thirty) days of the said appointment.
e) Step Five: Final Report by Liquidator
At this stage the liquidator need to prepare a Final Account. The Final Account must have the details of
how the winding up has been conducted and the assets distributed. Thereafter, the liquidator will call an
extraordinary general meeting and the notice for that must be circulates by advertisement in the official
Gazette, and in a newspaper. Such a notice must be given not less than one month before the meeting.
The special resolution will be passed in the extraordinary general meeting with regards to the disposal of
the books and papers of the company.
f) Step Six: Documents filing to RJSC
Lastly, a final meeting must be hold and a return of the meeting must be submitted to the RJSC upon
which the company will be winded up. The submission must be made within one week of the meeting.
g) Step seven: Petition filing to Court for Winding Up
For voluntary winding up, the petition to the court is made at this stage. All the documents relevant to
the winding up of the company are submitted to the court. The court being satisfied, declares that the
company has been dissolved. This stage is essential to avoid any allegation of fraud later on.

G. RJSC fees for Winding Up

1. For Private and Public Company: BDT 20.00
2. For Trade Organization and Foreign Company: BDT 10.00

The concept of corporate governance: Corporate governance is the system of rules, practices, and
processes by which a firm is directed and controlled. Corporate governance essentially involves
balancing the interests of a company's many stakeholders, such as shareholders, senior management
executives, customers, suppliers, financiers, the government, and the community. The board of
directors is responsible for creating the framework for corporate governance that best aligns business
conduct with objectives.

Corporate governance entails the areas of environmental awareness, ethical behavior, corporate
strategy, compensation, and risk management.
Specific processes that can be outlined in corporate governance include action plans, performance
measurement, disclosure practices, executive compensation decisions, dividend policies, procedures for
reconciling conflicts of interest and explicit or implicit contracts between the company and stakeholders.
An example of good corporate governance is a well-defined and enforced structure that works for the
benefit of everyone concerned by ensuring that the enterprise adheres to accepted ethical standards,
best practices and formal laws. Alternatively, bad corporate governance is seen as poorly-structured,
ambiguous and noncompliant, which could damage the image or financial health of a business.

What are the main principles of corporate governance?

Corporate governance is carried out in accordance with the Company's Corporate Governance Code and
is based on the following principles:

 Accountability. ...

 Fairness. ...

 Transparency. ...
  Responsibility.

How corporate governance and ethical issues related to the business.

Good corporate governance begins with a company's own internal practices and policies. Corporate
Governance represents the moral framework, the ethical framework and the value framework under
which an enterprise takes decisions. In the long run ethical behavior has a positive impact on the
company's performance.

Discuss the impact of key business decision to the shareholders and public:

Share holders are the owners of a corporation. Companies sell shares of stock, or partial ownership in the
business, in exchange for equity investment to operate the business. Shareholders typically affect
company operations and decisions differently than other stakeholders concerned with the business.

Difference between fraudulent and wrongful trading.

A company is trading fraudulently, if it carries on its operations with the purpose of deceiving and
defrauding creditors and customers; it is a criminal offence for any business and/or director to trade in
this way. The key point to fraudulent trading, is the intent that directors have behind their actions.

A company is wrongfully trading when directors continue to trade, regardless of being aware that the
company was going out of business. Wrongful trading is a civil offence and any director found guilty of
this is at risk of being held personally liable for any debts of the company. Directors should have a good
understanding of what’s happening within their company, particularly the accounts and should be able
to know when they are trading wrongfully.

The scope and functions of investment banking:

An investment bank is a financial services company that acts as an intermediary in large and
complex financial transactions. Investment banking is concerned with the allocation of financial
resources. It acts as an intermediary whose main job is to transfer capital from those who own
it to those who need it. In Bangladesh investments banking and merchant banking often are
used interchangeably. Merchant banks in Bangladesh are actively governed by the Securities
and Exchange Commission (SEC) and submissively by the Bangladesh Bank.

In traditional sense, the role of investment banking is one of intermediation in resource

allocation. Investment banks act as intermediaries between issuers and investors. The issuer
sells securities to investment bankers who in turn sell the securities to investors. The
investment banks own the securities until they are resold. Now-a-days, investment banking is
meant include primary market making, secondary market making, trading, corporate
restructuring, financial engineering, advisory services, merchant banking, investment
management, consulting, clearing, research, internal finance and information services.

The core functions of merchant banks in Bangladesh include issue management, underwriting
and Portfolio management services. 
Issue Management function of merchant Banking helps capital market to increase the supply of
securities and companies to raise money from the market in order to expand their operations.
A Issue Manager provides assistance a Private Limited Company intended to be converted into
Public Limited Company by way of obtaining necessary permission from the relevant
authorities, preparing prospectus for public issue of shares and debentures, supporting itself in
the collection of application money, inspection of applications, arranging for lottery relating to
allotment and so forth. Issue mgt refers to effective marketing of corporate securities viz.,
equity shares, preference shares and debentures or bonds by offering them to public.
The other important function of Merchant Bank is underwriting operation. It is an arrangement
whereby the underwriter undertakes to subscribe the unsubscribed portion of
shares/debentures offered by any Public Limited Company. This encourages the prospective
issuers to offer shares/debentures to the public for subscription and they can raise fund from
the public for implementation of their industrial undertakings. Underwriters take on the risk of
distributing the securities. If they fail to find enough investors, they will have to hold some
securities themselves. Underwriters make their income from the price difference between the
price they pay the issuer and what they collect from investors.
One of the important functions of merchant bank is to provide portfolio management services
to the customer. Portfolio management is the art and science of making decisions about
investment mix and policy, matching investments to objectives, asset allocation for individuals
and institutions, and balancing risk against performance. Portfolio management is all about
determining strengths, weaknesses, opportunities and threats in the choice of debt vs. equity,
domestic vs. international, growth vs. safety, and much other trade-offs encountered in the
attempt to maximize return at a given appetite for risk.
Merchant Banks carry out other important services like Corporate Advisory that refers to the
activity of advising organizations, including corporations, institutions and government bodies,
on mergers and acquisitions and other transactions that involve a change in ownership of a
company or business.

Discuss the process of IPO: Initial Public-Offering (IPO) stands for the process of a private
company going public by making their stocks available for the general public to buy.  Once the
company undergoes IPO, their stocks are sold in the market.

Going public is a major milestone in the life of a company, as well as a major transition. In going
public, the company gives others a chance to invest in the business and to share in its market
potential. However, doing so requires many changes in the way of managing the company.
Company will encounter different and more frequent reporting requirements for investors and
regulatory agencies. Company’s announcements and press releases will generate greater
visibility and attention. There are high expectations from shareholders, boards of directors,
regulatory agencies, media, investment bankers, stock exchanges, management and
employees.

Below are the steps a company must undertake to go public via an IPO process:

1. Appoint an issue manager: A company must get the DSE’s permission to raise capital
through IPO. As a result, it has to appoint an Issue Manager to get listed.
2. Submit draft prospectus: After hiring an Issue manager, the manager has to prepare the
draft prospectus. Consequently, he/she has to submit it along with other documents to
the SEC and DSE for their approval.
3. DSE analysis of the draft prospectus: After the Dhaka Stock Exchange receives the draft
prospectus, they examine the performance ratio and financial aspects of the company
offering IPO. This is crucial to figure out the long term and small-term consequences of
the company’s stocks on the market.
4. SEC analysis of the draft prospectus: The DSE sends its verdicts to the SEC within 15
days of the arrival of the draft prospectus after reviewing it. The SEC then analyses other
aspects of the company and also takes into account the DSE’s views. Accordingly, after a
thorough study, the SEC gives its approval for issuing IPO according to the Public Issue
Rule.
5. Filing application to the DSE: Once the company is approved for IPO, the Issue Manager
must apply to the DSE for listing its securities. This process should complete within five
days of approval.
6. Opening subscription: After applying, the company must open its subscription for the
general public. Then, they have to distribute their shares or refund securities within 42
days after closing the subscription.
7. IPO data transmission: The IPO data of the company is then successfully transferred
through IPO data transmission software.
General requirements for IPO in Bangladesh
There are some standard terms that a company must follow to get listed via IPO in Bangladesh.

1. The company must offer up to 10% of its paid-up assets or Tk. 15 cores at face value.
2. It has made no substantial changes after including its financial statements in the draft
prospectus.
3. Its financial statements are audited by the panel auditors. This is as per the Bangladesh
Auditing Standards and Companies Act of 1994.
4. The financial statements have been prepared under the SEC Rules of 1987 and follow
the terms of IFRS / IAS in Bangladesh.
5. The company has not acquired any losses at the time of the application.
6. It has complied with the asset valuation guidelines by the Commission.

Below are the steps a company must undertake to go public via an IPO process: 1. Select a bank
2. Due diligence and filings 3. Pricing 4. Stabilization 5. Transition
Roles of investment banker: Investment bankers help their clients raise money in capital
markets by issuing debt or selling equity in the companies. Other job duties include assisting
clients with mergers and acquisitions (M&As) and advising them on
unique investment opportunities such as derivatives.
Investment banks act as intermediaries between issuers and investors. The issuer sells
securities to investment bankers who in turn sell the securities to investors. The investment
banks own the securities until they are resold. For firms seeking to raise long-term funds,
investment banks in Bangladesh provide assistance through a number of functions that
involves.

Distinguish between Speculation and Arbitrage.

investors use a tailor-made financial strategy that works well for them. Arbitrage and
speculation are two very different financial strategies, with differing degrees of risk.

Arbitrage is fairly common among institutional investors and hedge funds, and comes with a
limited amount of risk. This type of strategy involves a large position in a security that is traded
in two different markets at different prices. The investor will buy it at a low price on one market
and sell it for a slightly higher price on another, thereby profiting off the difference. Because of
the nature of this strategy, it's generally not used by small, individual investors.
ARBITRAGE: Puchasing of stock of a future takeover target with an expectation of high price.
Use the difference between spot and future prices to generate risk free profit.

Speculation, on the other hand, can be. This strategy doesn't need a sizable investment base,
and may not based on market forces. It is based on assumptions, and can involve any type of
security including real estate. While arbitrage comes with a limited amount of risk, speculation
does carry a greater chance of reward or loss.
SPECULATION:
~ Speculation –creating a position to realize a profit from his/her expectation

Executive director: An executive director is a director who performs a specific role in a

company under a service contract which requires a regular, possibly daily, involvement in
management.

A director may also be an employee of their company. Since the company is also their employer
there is a potential conflict of interest which, in principle, a director is required to avoid. To
allow an individual to be both a director and employee the articles usually make express
provision for it, but prohibit the director from voting at a board meeting on the terms of their
own employment. Directors who have additional management duties as employees may be
distinguished by special titles, such as 'Finance Director'. However, any such title does not affect
their personal legal position. They have two distinct positions as:
-A member of the board of directors; and
-A manager with management responsibilities as an employee
Power of executive director- power to receive remuneration, power to play role in the best
interest of the company, power to report to the board, power to play leadership.

Non-executive directors: A non-executive director (NED) does not have a function to perform in
a company's management but is involved in its governance.

In listed companies, the UK Corporate Governance guidelines state that boards of directors are
more likely to be fully effective if they comprise both executive directors and strong,
independent non-executive directors. The main tasks of the NEDs are as follows:
- Contribute an independent view to the board's deliberations
- Help the board provide the company with effective leadership
- Ensure the continuing effectiveness of the executive directors and management
- Ensure high standards of financial probity on the part of the company.

What Is a Non-Executive Director?

 A non-executive director is a member of a company's board of directors who is not part

of the executive team.

 A non-executive director typically does not engage in the day-to-day management of

the organization but is involved in policymaking and planning exercises.

Power of Non executive director: power to take part in decision making process, power to
participate in meetings.

Key Differences between Executive and Non-Executive Director –

Upcoming points will discuss the difference between Executive and Non-Executive Director:
Executive Directors –
 The essential characteristic of an executive director is his or her discharge, usually as an
employee, of executive functions in the management and administration of the
company.
 Executive Director is not just a member of the company’s board, but they are also the
employees of the company, charged with executive responsibilities of managing the
enterprise.
Non-Executive Director –
 A non-executive director is independent of the company’s management as well as of the
interested parties.
 Non-executive directors will provide objective criticism on board matters “constructive
challenge” and facilitate strategic decisions by the executive directors.
Basis of Executive Director Non-Executive Director
comparison

Meaning Executive Director is not just a member of A non executive diretor is a member of the
the company’s board, but also the company’s board ,but he/she does not
employee of the company, charged with possess the management responsibilities.
executive responsibilities of management
and administration of the company.

Represents Executive Directors are not independent Non-executive Directors are the
directors of the company appointed with independent directors of the company
the aim of managing the enterprise. They appointed with the aim of bringing a
are the internal directors of the company. certain degree of objectivity in the
organization’s decision. They are the
external directors of the company.

Appointment Letter of employment The non-executive director is appointed

by under a Letter of Appointment, as they are
self-employed

Appointment to By nomination committee or by By shareholders

board shareholders (as the case may be)

Remuneration Salary- The executive directors are the Service fee- The non-executive directors
salaried employees of the company. get service fees as remuneration for the
services rendered by them.

Strategy The main task of the executive directors is The non-executive directors tend to
the formulation and implementation of consider and review the company’s
the strategies and policies. strategies and policies.

Includes The company’s Chief Executive Officer Chairman

(CEO), Chief Financial Officer (CFO) and
Managing Director (MD) are the executive
directors of the firm.

The managing director and the chairman of the board of directors:

1. Chairman is a person chairing some meeting. In the corporate world, a chairman is a
person who usually elected or appointed to chair meetings of the Board of Director or
Members of a company.
2. Managing Director is the top director of a company who is entrusted with substantial
powers to manage the company. The Board of Directors of the company always have a
supervisory role over Managing Director. There may be one or more Managing Directors
in large companies.
 3. CEO – the Chief Executive Officer is not a Board Position technically. He may or may not
otherwise be on the Board. CEO manage the company or one or more business verticals.
They report to the Managing Director or the Board of Directors of the company
depending on the organisation structure of the company.

The chairman of a public limited company is one of the directors of the company elected to
preside over the meetings of the company.

Routine agenda of the first board meeting of a company:

Illustrative list of items of business for the Agenda for the First Meeting of the Board of
Directors of the Company:
1. To appoint the Chairman of the Meeting.
2. To note the Certificate of Incorporation of the company, issued by the Registrar of Joint Stock
Companies and Firms.
3. To take note of the Memorandum and Articles of Association of the company, as registered.
4. To note the situation of the Registered Office of the company.
5. To confirm/note the appointment of the first Directors of the company.
6. To read and record the notices of disclosure of interest given by the Directors.
7. To consider the appointment of Additional Directors.
8. To consider the appointment of the Chairman of the Board.
9. To fix the financial year of the company.
10. To consider the appointment of the first Auditors.
11. To adopt the Common Seal of the company.
12. To appoint Bankers and to open bank accounts of the company.
13. To authorize printing of share certificates.
14. To authorize the issue of share certificates to the subscribers to the Memorandum and
Articles of Association of the company.
15. To approve preliminary expenses and preliminary contracts.
16. To consider the appointment of the Managing Director/Whole time Director/Manager and
Company or Chartered Secretary, if applicable and other senior officers.

Minutes means a formal written record, in physical or electronic form, of the proceedings of a
Meeting.

Meeting minutes, or mom (for minutes of meeting) can be defined as the written record of

everything that's happened during a meeting.They highlight the key issues that are discussed,
motions proposed or voted on, and activities to be undertaken. The minutes of a meeting are
usually taken by a designated member of the group. Their task is to provide an accurate record
of what transpired during the meeting.
Meeting minutes, also called meeting notes are not a minute-by-minute record and instead
focus on the outcomes of the meeting. Minutes usually capture information such as: Names of
participants. Date and time of the meeting.

Proceedings of a Meeting
Proceedings mean the verbatim record for reporting or the discussions and decisions of a
meeting. It is a detailed record of the matters raised at the meeting, the discussions held on
each motion and the decisions reached on each item.

Minutes Proceedings
Minutes are the official record of the Proceedings mean the verbatim record or
proceedings of the meeting and the decision report of the discussions and decisions of a
reached therein. meeting.
It is prepared after the meeting. It is prepared at the time of the meeting.
It writes, in a concise form, the decision of the It writes, in detail, the proceedings of the
meeting. meeting.
It records the resolutions only. It records the discussion of the meeting.

A meeting therefore, can be defined as a lawful association, or assembly of two or more

persons by previous notice for transacting some business. The meeting must be validly
summoned and convened. Such gatherings of the members of companies are known
as company meetings.

Is it possible to bring some correction in minutes? How?

ALTERATION / MODIFICATION 4.1 If a resolution or decision supersedes or modifies any
previous resolution or decision, the reference of the previous resolution or decision should be
mentioned.
4.2 Minutes, once entered in the Minutes Book, should not be altered.
Any modification in the Minutes entered, should be effected only by way of approval in the
subsequent Meeting in which such Minutes are sought to be modified.

5. FINALISATION & SIGNING

5.1 Minutes should be finalized within seven working days from the date of conclusion of the
Meeting, or earlier to meet any regulatory requirements.
5.2 Minutes of the Meeting of Directors should be signed by the Chairman of the Meeting or
the Chairman of the next Meeting.
5.3 Minutes of a General Meeting should be signed and dated by the Chairman of the meeting
or in the event of death or inability of the Chairman, by any director duly authorized by the
Board for the purpose.
5.4 The Chairman or the authorized director should initial each page and sign the last page of
the Minutes.

Case question December 2018 , question 3:

Section 145. Civil liability for misstatement in prospectus.---(1) Subject to the provisions of this
section, where a prospectus invites members of the public to subscribe for shares in or
debentures of a company, the following persons shall be liable to pay compensation to every
person who subscribes for any shares or debentures on the faith of the prospectus for any loss or
damage he may have sustained by reason of any untrue statement included therein, that is to
say---

(a) every person who is a director of the company at the time of the issue of prospectus;

(b) every person who has authorised himself to be named and is named in the prospectus either
as a director, or as having agreed to become a director, either immediately or after an interval of
some time; (c) every person who is a promoter of the company; and

(d) every person who has authorised the issue of the prospectus.

Process of listing with DSE

General process of listing with Dhaka Stock Exchange (DSE)

The unlisted companies are required to complete certain procedures to get listing at DSE
(Exchange). The present process/way of listing, in short, may describe as follows:

 Every company intending to enlist its securities to DSE by issuing its securities through
IPO is required to appoint Issue Manager to proceed with the listing process of the
company in the Exchange;
 The Issue Manager prepares the draft prospectus of the company as per Public Issue
Rules of SEC and submit the same to the SEC and the Exchange(s) for necessary
approval;
 The Issuer is also required to make agreement with the Underwriter(s) and Bankers to the
Issue for IPO purpose;
 After receiving the draft prospectus, the Exchange examine and evaluate overall
performance as well as financial features of the company which may have short term and
long term impact on the market;
 The Exchange send its opinion to SEC within 15 days of receipt of draft prospectus for
SEC's consideration;
 After proper scrutiny, SEC gives it consent for floating IPO as per Public Issue Rule;
 Having consent from SEC, the Issuer is required to file application to the Exchange for
listing its securities within 5 days of issuance of its prospectus;
  On successful subscription, the company is required to complete distribution of
allotment/refund warrants within 42 days of closing of subscription;
 After 100% distribution of shares/refund warrants and compliance of other requirements,
the application for listing of the Issuer is placed to the Exchange's meeting for necessary
decision of the Board of DSE;
 The Board of DSE takes the decision regarding listing/non-listing of the company which
must be completed within 75 days from the closure of the subscription.

Discuss the roles of company secretary in a group of company:

Company Secretary is one of the key positions of a company and is highly responsible one. Company
Secretary is called Corporate Secretary in some places and hold same position of Company Secretary. He
or she act as bridge of the employees and employers and maintain secrecy of the company. Company
Secretary who is qualified member of Chartered Secretary of respective country.

As noticeable is most of the countries foreigners are not allowed to become Company Secretary but
rules are not same for all countries. Many responsibilities are taken on own solders of a company
secretary being statutory right. Many duties and responsibilities are performed by Company Secretary as
follows:

· Prepare board meeting minutes to register a new company

· Prepare Memorandum And Article of Association

· Prepare required forms to approve new company from government

· Questionable of any compliance of the company

· Appoint directors of the company

· Change directors of the company

· Attend and arrange Annual General Meeting

· Arrange any board meeting resolution

· Increase share of the company

· Prepare papers to apply of public listing company

· Update to the employer about listing rules and regulations

· Keep relation with employer, employees, auditor, government and non government bodies.
· Act as director of the company, if necessary

· Annual Return Filing of the company

The role and duties of internal auditors:

Internal Auditor Responsibilities and Duties

· Conduct timely implementation of risk-based internal audits as directed by controller complying with
annual audit plan.

· Assist on various audit projects and matters and ensure to have initial focus on revenue assurance.

· Conduct risk evaluation of assigned functional area or department in established timeframe.

· Contribute to Office of Internal Oversight as well as Evaluation Services (IES) risk evaluation of internal
audit of organization.

· Implement internal audit tasks in areas of risk management and internal control.

· Perform all assigned audit assignment at financial, operational and administrative processes and
systems.

· Evaluate internal audit suitability, efficiency, cost-effectiveness and internal controls effectiveness.

· Identify level of conformance with established rules, regulations, policies and procedures;

· Examine validity and reliability of financial, accounting and other data and report any deviations.

· Participate in audit engagement planning, reporting, scoping, execution and follow-up as defined.
· Study and learn company policy and procedures.

· Evaluate comprehensive business processes and transactions to analyze productiveness of controls and
risk alleviation.

· Identify internal audit control environment enhancement opportunities.

· Conduct testing adhering with accreditation and varied regulatory requirements.

· Support development of internal audit programs for operational audits and special reviews etc.
The main feature of investment banking which differentiate it from other form of banking:
Feature Invesetment Banking Commercial Banking(Coventional banking and
Islamic Banking)

Field of -Advice for mergers and acquisitions -Maintaining checking and savings accounts
operations for businesses and individuals
-Underwriting services
-Providing loan for a variety of purpose
-sales, trading and corporate broking
-Other facilities such as credit card services,
-Research buying and selling of foreign currencies.

Accepting These banks don’t lend and accept Accepts deposits such as savings deposits,
deposits deposits. They mainly give advisory fixed deposits.-depository
services.-Non depository

Target Focuses on narrow target market which Wide target people including individuals of all
market includes high net worth individuals, large income, small and medium business
corporate houses, governmets etc. enterprises, large corporate houses, trusts,
government etc.

Regulation Regulated by the country’s SEC of Regulated by the central bank of the country.
Bangladesh.

Earning Earns money through the fees charged Earns money through the interest charged on
for providing services loans.

Liquidity No pressure on its liquidity. High pressure on its liquidity.

focus

Risk factor Risk factor is high due to nature of Risk factor is low due to stronger govt.
business and weaker regulatory regulations.
requirement.

A syndicated loan is offered by a group of lenders who

Describe the nature of syndicate loan:
work together to provide credit to a large borrower. The borrower can be a corporation,
an individual project, or a government. Each lender in the syndicate contributes part of
the loan amount, and they all share in the lending risk. One of the lenders act as the
manager (arranging bank), which administers the loan on behalf of the other lenders in
the syndicate. The syndicate may be a combination of various types of loans, each with
different repayment terms that are agreed upon during negotiations between the lenders
and the borrower.
Loan syndication occurs when a single borrower requires a large loan that a single lender
may be unable to provide, or when the loan is outside the scope of the lender’s risk
exposure. Lenders then form a syndicate that allows them to spread the risk and share in
the financial opportunity. The liability of each lender is limited to their share of the total
loan. The agreement for all members of the syndicate is contained in one loan agreement.
Participants in a Syndicated Loan:
Those who participate in loan syndication may vary from one deal to another, but the
typical participants include the following:
1. Arranging bank:
The arranging bank is also known as the lead manager and is mandated by the borrower
to organize the funding based on specific agreed terms of the loan. The bank must acquire
other lending parties who are willing to participate in the lending syndicate and share the
lending risks involved. The financial terms negotiated between the arranging bank and
the borrower are contained in the term sheet.
The term sheet details the amount of the loan, repayment schedule, interest rate, duration
of the loan and any other fees related to the loan. The arranging bank holds a large
proportion of the loan and will be responsible for distributing cash flows among the other
participating lenders.
2. Agent:
The agent in a syndicated loan serves as a link between the borrower and the lenders and
owes a contractual obligation to both the borrower and the lenders. The role of the agent
to the lenders is to provide them with information that allows them to exercise their rights
under the syndicated loan agreement. However, the agent has no fiduciary duty and is not
required to advise the borrower or the lenders. The agent’s duty is mainly administrative.
3. Trustee:
The trustee is responsible for holding the security of the assets of the borrower on behalf
of the lenders. Syndicated loan structures avoid granting the security to the individual
lenders separately since the practice would be costly to the syndicate. In the event of
default, the trustee is responsible for enforcing the security under instructions by the
lenders. Therefore, the trustee only has a fiduciary duty to the lenders in the syndicate.
Advantages of a Syndicated Loan
The following are the main advantages of a syndicated loan:
1. Less time and effort involved
The borrower is not required to meet all the lenders in the syndicate to negotiate the terms
of the loan. Rather, the borrower only needs to meet with the arranging bank to negotiate
and agree on the terms of the loan. The arranger then does the bigger work of establishing
the syndicate, bringing other lenders on board, and discussing the loan terms with them to
determine how much credit each lender will contribute.
2. Diversification of loan terms
Since a syndicated loan is contributed to by multiple lenders, the loan can be structured in
different types of loans and securities. The varying loan types offer different types of
interest, such as fixed or floating interest rates, which makes it more flexible for the
borrower. Also, borrowing in different currencies protects the borrower from currency
risks resulting from external factors such as inflation and government laws and policies.
3. Large amount
Loan syndication allows borrowers to borrow large amounts to finance capital-intensive
projects. A large corporation or government can borrow a huge loan to finance large
equipment leasing, mergers, and financing transactions in telecommunications,
petrochemical, mining, energy, transportation, etc. A single lender would be unable to
raise funds to finance such projects, and therefore, bringing several lenders to provide the
financing makes it easy to carry out such projects.
4. Positive reputation
The participation of multiple lenders to finance a borrower’s project is a reinforcement of
the borrower’s good market image. Borrowers that have successfully paid syndicated
loans in the past elicit a positive reputation among lenders, which makes it easier for
them to access credit facilities from financial institutions in the future.
Describe about credit rating practice in bangladesh:
Bangladesh credit rating industry started its journey with the mandatory requirement
ofhaving credit rating for all public debt instruments, right offer issues and shares issued
at apremium before the same were offered to the public. In the year of 2002, Credit
RatingInformation & Service Limited (CRISL) started its operation as the first registered
creditrating agency of Bangladesh. The second rating agency,
Credit Rating Agency of Bangladesh Limited (CRAB) went to its operation on 2004,
thus, making the sustainability more difficult or two rating agencies.
Credit Risk Grading Manual of Bangladesh Bank was circulated by Bangladesh Bank
vide BRPD Circular No. 18 dated December 11, 2005 on Implementation of Credit Risk
Grading Manual which is primarily in use for assessing the credit risk grading before a
bank lend to its borrowing clients. By that time CRISL rating reports were appearing to
be very useful for the users; specially CRISL rating report on the then Al Baraka Bank
convinced the Bangladesh Bank of the need of credit rating and it took the initiative to
make mandatory for all banks to have credit rating before it goes for public offering. The
banking regulator further decided to make it mandatory for all banks to submit credit
rating reports to the regulator within six months after the finalization of accounts.
Following the example of the central bank, the insurance regulator also came up with the
requirement to make rating mandatory for all general insurance companies every year and
for the life insurance companies bi-annually. The Dhaka Stock Exchange, while issuing
the direct listing regulations, made the credit rating mandatory before a company apply
for direct listing. The above regulations created an enabling environment for credit rating
in the country‘s capital and financial markets.
The concept of client rating by the rating agencies to support capital adequacy of the
banks came up in view of the need for implementation of Basel II capital adequacy
framework by Bangladesh Bank. According to Basel II framework, BB adopted a
standardized approach for credit risk in which the services of rating agencies were
required under certain strict terms and conditions. Bank client rating is a very sensitive
issue in view of the fact that most of the private sector companies, enjoying banking
facilities, are not maintaining standard financials for appropriate evaluation. Unless and
until all the above factors are properly evaluated through sector wise studies, the ratings
are bound to give wrong signals. Security and Exchange Commission of Bangladesh
(SECB) allows 2% default rate of the credit rating agencies. There are certain penalties in
case default rate of more than 2% including cancellation of license of the defaulter rating
agency as the highest penalty by SECB.
Other credit rating companies National Credit Ratings Ltd and Emerging Credit Rating
Ltd started their journey on 2010. ARGUS Credit Rating Services Ltd. is on operation
since2011. Lastly, new four credit rating companies have come to operation on 2012
which areWASO Credit Rating Company (BD) Limited, Alpha Credit Rating Limited,
The Bangladesh Rating Agency Limited and WASO Credit Rating Company (BD)
Limited. A list of credit rating companies operating in Bangladesh is attached with the
report as Appendix.
According to Association of Credit Rating Agencies of Asia, Bangladesh has the highest
number of credit rating companies. India; one of the largest economy of Asia has only
two credit rating companies. On the other hand China, another largest economy is
continuing its economic growth with a single credit rating company.
The rating industry In Bangladesh is now considered to be a parentless industry. The
behavior of the regulators towards nourishing this industry does not appear to be rational.
The rating agencies are still defined by the SEC rules as an investment advisory
company. This has not changed over a long time. The paid-up capital still remains at Tk.
5.0 million (50lakh), to start a rating agency by any group of sponsors.
(e)sept 2020.
As an investment banker, I suggest Mr. Asad to follow the bellows:
i. Issuing right shares,
ii. Fund arrange from different bank competing / saving interest,
iii. Declaring stock dividend to save cash,
i. Welcoming strategic investors.
Phases of money laundering: What is Money Laundering? Money laundering can be defined in
a number of ways. But the fundamental concept of Money laundering is the process by which
proceeds from a criminal activity are disguised to conceal their illicit origins.
The Financial Action Task Force on Money Laundering (FATF), which is recognized as the
international standard setter for anti-money laundering (AML) efforts, defines the term “money
laundering” succinctly as “the processing of criminal proceeds to disguise their illegal origin in
order to legitimize the ill-gotten gains of crime.”
Stages of Money Laundering
There is no single method of laundering money. Methods can range from the purchase and resale
of a luxury item (e.g. a house, car or jewellery) to passing money through a complex
international web of legitimate businesses and 'shell' companies (i.e. those companies that
primarily exist only as named legal entities without any trading or business activities). There are
a number of crimes where the initial proceeds usually take the form of cash that needs to enter
the financial system by some means. Bribery, extortion, robbery and street level purchases of
drugs are almost always made with cash. This has a need to enter the financial system by some
means so that it can be converted into a form which can be more easily transformed, concealed
or transported. The methods of achieving this are limited only by the ingenuity of the launderer
and these methods have become increasingly sophisticated. Despite the variety of methods
employed, the laundering is not a single act but a process accomplished in 3 basic stages which
may comprise numerous transactions by the launderers that could alert a financial institution to
criminal activity –
Placement - the physical disposal of the initial proceeds derived from illegal activity.
Layering - separating illicit proceeds from their source by creating complex layers of
financial transactions designed to disguise the audit trail and provide anonymity.
Integration - the provision of apparent legitimacy to wealth derived criminally. If the
layering process has succeeded, integration schemes place the laundered proceeds back
into the economy in such a way that they re-enter the financial system appearing as
normal business funds.
The three basic steps may occur as separate and distinct phases. They may also occur
simultaneously or, more commonly, may overlap. How the basic steps are used depends
on the available laundering mechanisms and the requirements of the criminal
organisations. The table below provides some typical examples.
What is insider dealing ? “An insider of the company, who is in possession of unpublished price sensitive information, to trade in
securities of that company or to trade in securities of a related company, with a view to the making of profit or the avoidance of a
loss”. Insider dealing is in essence an offence relating to the abuse of information, We are living in a informational age and the
information could be categorized as valuable property. The traditional offences theft, misappropriation and criminal breach of trust
are applicable in the spectrum of the misuse of property. 
Insolvency adiministrator:

An administrator is appointed primarily to try to rescue the company as a going concern. A company
may go into administration to carry out an established plan to save the company.

Administration puts an insolvency practitioner in control of the company with a defined programme for
rescuing the company from insolvency as a going concern.

An Insolvency administrator has specific duties and responsibilities to creditors, and in the first instance
will take control of the company with a view to business rescue.
They have a duty to act in the best interests of creditors as a whole, and will attempt to realise the
highest returns for all groups if rescue is not possible. If this also fails, they must attempt to achieve a
better result for creditors than if the company had been liquidated.

An administrator adopts diverse roles and responsibilities during a formal insolvency procedure, as an
officer of the court and an impartial agent/manager of the company, and has a duty to act with integrity
and good faith.

Initial appointment of the administrator:

It is likely that the insolvency practitioner will already have had dealings with the company in an advisory
capacity, prior to their official appointment as administrator. This is potentially subject to change,
however, as creditors can vote to retain them or appoint a new administrator at the initial creditors’
meeting.

The office-holder can be appointed by the Secretary of State in certain circumstances, and if a winding-
up order has been granted, the courts may also become involved in the process.

Administrator duties to creditors:

Although unsecured creditors rank low for payment in insolvency, they should not be placed at a
disadvantage unnecessarily because of administrator actions.

In general, administrators must:

· Act in the best interests of creditors as a whole

· Be impartial during their time in control of the company

· Act in good faith, and with reasonable care and skill

· Take reasonable action to achieve the best price on realisation of assets

· Carry out the insolvency process as quickly and efficiently as is practicable

Specifically, they must:

· Send written notification of their appointment to all creditors

· Send a statement of proposals to creditors outlining the reasons why the company has reached this
financial situation, the objectives of the administration, how their remuneration will be set, and a
summary statement of affairs. (The statement of proposals sent to creditors usually includes an
invitation to attend the initial creditors’ meeting.)

· Present the summary of proposals at the meeting of creditors

· Send a progress report to creditors for each six-month period of administration from the date of
appointment. The report must include details of their remuneration and expenses, and advise creditors
of their right to request more information.

The duties of directors: duty to act within powers in accordance with the company's constitution

a. Fiduciary duty: To act in good faith in the best interest of the company and to use the
powers (given by the articles) for a proper puropse
b. To Exercise independent judgement
c. To Exercise reasonable skill, care and diligence
d. To avoid conflicts of interest between the interest of the company and their personal
interests
e. Not to accept benefits from third parties
f. To Declare an interest in a proposed transaction or arrangement
g. To file the company’s annual accounts and annual return on time
h. To prevent the company trading while insolvent (i.e. while it is unable to pay its debts)
i. If the company is being wound up, to report to the liquidator on the affairs of the
company (company books and records).
What Is a Bankruptcy Discharge?
A bankruptcy discharge, also known as a discharge in bankruptcy, refers to a permanent court order that releases a
debtor from personal liability for certain types of debts. It is sometimes referred to simply as a discharge and comes
at the end of a bankruptcy. After it is issued, the court absolves the debtor of the obligation to repay their debts, and
creditors are not permitted to contact or pursue debtors for the outstanding debt.

KEY TAKEAWAYS
 A bankruptcy discharge refers to an order that releases a debtor from personal liability for certain types of
debts.
 Creditors are not permitted to contact or pursue debtors for the outstanding debt.