COURSE TITLE: INTRODUCTION TO BUSINESS LAW

COURSE CODE: BUS 360

SECTION: 06
SUBMITTED TO: MR. IFTEKHAR MAHFUZ
SUMMER 2021

SUBMITTED BY:

NAME ID

Tamzid Ahmed Anik 1911031

Mazraha Tanjum 2021969

Rakib Hasan Ridoy 1630659

Sadia Jahan 1821863

Mt. Shamsunnahar Tisha 1931147

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 Table of Contents
Introduction…………………………………………………………………………………..1

Definition……………………………………………………………………………………..1

Necessary Features of a Private Company……………………………………………………1-2

Company Name……………………………………………………………………………….2-3

Directors………………………………………………………………………………………3-4

Pre-registration key facts:

Authorized Capital…………………………………………………………………………4-5-6

Paid-up capital………………………………………………………………………………….6

Registered Address……………………………………………………………………………6-7

Memorandum of Association…………………………………………………………………7-8

Articles of Association…………………………………………………………………….….8-9

Steps of forming a private company in Bangladesh;

Name clearance………………………………………………………………………….…..10-11

Registration……………………………………………………………………………….….11-12

Return filling………………………………………………………………………………....12-13

Winding up…………………………………………………………………………….…….14-15

Issuance of certified
copies……………………………………………………………………………………...16-17-18

Struck -Off……………………………………………………………………………………18

Conclusion……………………………………………………………………………………19

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Introduction
The Registrar of Joint Stock Corporations and Firms (RJSC) is the sole institution responsible for
facilitating the registration of companies and keeping track of all ownership-related issues as
required by Bangladeshi law. When forming a firm, we must obtain registration from the Register
of Joint Stock Companies and Firms (RJSC). Bangladesh, we believe, is an ideal location for
starting a new business and increasing profits. We come up with an idea and construct a company,
after which we must register our company with RJSC. The RJSC is the sole authority in the country
that can approve a company's registration certificate of incorporation certificate.

Definition of Company
The term "company" refers to a group of people who have come together for a similar goal and
have registered under the laws governing corporations. One’s business can be a sole proprietorship,
a partnership, or a corporation.

Essential Elements of a company

To form a company there are some essential elements is needed which is described in below:

Legal Personality: A company is regarded by law as a single person. It has a legal personality.
This rule applies even in the case of “One-man Company.
Management: The Board of Directors, full-time Directors, Managing Directors, or Managers
oversee a corporation. These individuals are chosen in accordance with the Act and the company's
Articles of Association. As such, a shareholder is unable to participate in management.

Voluntary Association: A company is an association of many persons on a voluntary basis.

Therefore a company is formed by the choice and consent of the members.
Contractual Capacity: A corporation's shareholder cannot bind the firm in any way in his or her
own capacity. A company's shareholder can work for it and engage into contracts with it.
Not a Citizen: A company is an artificial person, not a natural person. Therefore a company is not
a citizen, although it may have a Domicile.

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Residence: A company has a residence (for taxation and other purpose). A company does not
possess any fundamental rights.

Social Objective: The current legal understanding of company law is that it is a social entity with
obligations and responsibilities to the community, its employees, the national economy, and
progress.

Centrally Administrated: The administration of company Law is entrusted to the Central

Government.

Permanent Existence: The Company will continue to exist indefinitely. A shareholder's death or
insolvency has no bearing on the company's survival. Only when a company is liquidated in
accordance with the Companies Act does it come to an end.

Transferability: The shareholder of a company can transfer its share and ordinarily the transferee
becomes a member of the company.

Statutory Obligations: A corporation must comply with a variety of statutory management duties,
such as filing balance sheets, keeping correct account books and registers, and so on.

Common Seal: A common seal is required for a business. The common seal is used as a signature
alternative.
Company Name:
Based on companies Act 1994, the company name should be unique in such way, it does not match
with other existing company name which is already registered. But if the company is dissolving
then with the written consent of that particular company we can use the company name to be
registered. Our company name can’t be registered if the name is declared by the government in
official Gazette as unwanted. So before forming the name we have to apply to the registrar by
mentioning the company name that the company name weather any company is registered or
proposed to register or unwanted to the government. But for this information first we have to pay

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the fees for application to the registrar and the registrar will provide the information within a period
of thirty days from the receiving day of application.

In case of change of company name: In the case of unconsciousness or any other reason, If our
company get registered with an existing company name, without the consent of that company
and this similarity can be harmful then with the direction of the registrar we will change the
company name within a period of one hundred and twenty days.

We can change our company name according to accomplishment and with a written approval of
Registrar. So, if we change its name the Registrar will change the name by switching it on former
name and issue a certificate of incorporation of its new name to meet the circumstances of the file.
And with that the name changing will be completed. The new name has no role to change any right
or obligation of the company or any remuneration defect against the company .After changing
name our legal proceeding will be continued by the new name.

Under the company law1994, we can’t contain any form name or abbreviation name of the United
Nation and its body Subsidiary and also the World Health Organization. If we wish then we only
can use them when we can obtain a previous written authorization by the secretary General in the
case of United Nation and by the director general in the case of World Health Organization.

Directors:
For a private limited company, the company management is responsible by their Board of
Directors. So, we have to consider so many required rules by the Companies Act 1994.

Directors Obligatory: For the subsidiary body we need at least three directors for our company
but we also can form it with at least two directors.

Eligibility and Selection Process of Director: Under the company Act, only a natural person we
can appoint as a director. We can’t select a director who has distorted mind that competent by the
court and has a bankruptcy or he is a minor.

The subscriber of the memorandum will be considered as director until the first director appointed.
The director of our company will be selected by our members and in case of any uncertain vacancy

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occur then we can fill up it’s by our others directors. But we have to justify that the person is
qualified enough.

Restrictions and Responsibly of Directors:

The directors can’t promote themselves as being director. They need to be signed and filed a
written consent form the Registrar. In any purpose of share capital, the director need to be
confirmed by signing the memorandum. The directors can’t hold any profit except the consent of
company general meeting. Without the consent of the directors, a director of the company can’t
form a contract of sale, purchase or supply of goods and materials. The directors need to performed
in every company meeting and a meeting of Board of Directors will be held at least once in every
three and at least four in a year.

Duration and Removal of Directors: On the special basis the company can dispel a director
before his expiration and also can appoint a new shareholder director. And after that our Board of
Directors can’t be able to re-appoint this director.

Under company law, our company can’t hold a director more than five years. But with the consent
of general committee, the duration can exceed five years on each occasion.

Register of Directors and Managing Agent:

In our registered office we have to keep a record of the directors and managing agent’s full name,
residential address, nationality or origin, occupation and others directorships. The company have
to send this report to the Registrar within a specific time period. And if any changes occur then it
has to be mentioned on the report and then it will be prescribed by the Registrar within 14 days
from the appointment.

Authorized Capital:

In the Memorandum of Association and Articles of Association, the amount of authorized capital
must be declared. It refers to the maximum quantity of stock that a company can issue (allocate)
to its shareholders .In Bangladesh, there is no minimum or maximum authorized capital for local
companies. When a private limited company expands its activities and/or needs significant money
in the form of debt or equity, the company's permitted capital is increased, and new shares are

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distributed to the main leaders in proportion to their shareholding. A portion of the permitted
capital can be held in reserve. However, a minimum of USD 50000/- must be invested within the
Company for practical reasons and to gain full freedom in terms of expatriation and bringing in
overseas expatriates.

Authorized Capital (BDT) Fee (BDT)

Up to 20,000.00 360.00

Additional for every 10,000.00 or part after 180.00

first 20,000.00 up to 50,000.00

Additional for every 10,000.00 or part after 45.00

first 50,000.00 up to 10,00,000.00

Additional for every 10,000.00 or part after 24.00

first 10,00,000.00 up to 50,00,000.00

Additional for every 1,00,000.00 or part 45.00

after first 50,00,000.00

For example, if XYZ Pvt Ltd has an authorized capital of BDT 2000000 and shares have been
issued to shareholders up to an amount of BDT 360.00, it means that XYZ Pvt Ltd has issued
shares that are not in excess of the Company's maximum limit. The authorized capital, and has the
option to issue more shares up to BDT 180.00 in the future without raising the authorized share
capital for every 10,000.00 or part after first 20,000.00 up to 50,000.00. However, if XYZ Pvt Ltd
has issued shares worth BDT 45.00 to shareholders with the same authorized capital of every

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10,000.00 or part after first 50,000.00 up to 10, 00,000. The Company has issued in excess of the
maximum limit, which is prohibited by law. To issue more shares than the maximum amount of
authorized capital, XYZ Pvt Ltd must first begin the procedure of raising authorized share capital.

Paid-up Capital:

Paid-up capital, on the other hand, is the proportion of authorized capital that defines the number
of shares the company has issued to its shareholders. For example, the company's authorized
capital (the maximum amount generated by issuing shares) at the time of incorporation was Rs.10
lakh, but it has only raised Rs.7 lakh through its shares so far. As a result, it has a paid-up capital
of Rs. 7 lakh. The minimum paid-up capital to create a Private Limited Business was Rs.1 lakh
under the Companies Act of 2013, however the Companies (Amendments) Act of 2015 says that
there is no minimum paid-up capital, but an authorized capital of Rs.1 lakh is still necessary to
incorporate this company .The amount of capital raised by the firm by issuing all of its shares is
referred to as paid up capital. The lower the reliance on borrowing, the more paid-up capital there
is. A completely paid-up capital firm is a private limited company that has issued all of its shares
and can now grow capital by exceeding its authorized capital limit or borrowing money. The
company's market health is determined by its paid-up capital amount on its balance sheet. It
indicates the extent to which the company's funding is reliant on equity. The financial state of the
firm is determined by comparing the level of equity to the level of debt. Paid-up capital aids the
firm in determining whether or not its equity exceeds its debts. If the company's equity exceeds its
liabilities, the debt-to-equity ratio is lower. A lower debt-to-equity ratio indicates that the business
is less dependent on debt and more on equity. As a result, the firm seeks to maximize its paid-up
capital in order to reduce its debt-to-equity ratio.

Registered Address: During the company registration, the company must have a registered
office. This requires the presence of a physical address. Registered office address is permitted to
be both a residential and non-residential address. A private limited company in Bangladesh that
does not have a registered office address. In Bangladesh, the cost of forming a private limited
company is $3990. The total cost includes the preparation of legal documents, the registration of
the company, the payment of all taxes and fees at the time of registration, and the provision of a
legal address for the company (a year). In Bangladesh, the company registration process can take

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up to six weeks. A local address should be given as the company's registration address when
registering a business in Bangladesh. A physical property (either especially in residential) must be
used as the registered address, not a Postal Box.

Memorandum of Association:

The objectives of a limited corporation are outlined in the Memorandum of Association (MOA).
Those who are able to add as many objectives however their like. It should be noted, however, that
in order to start a banking, financial, school, or hospital, prior authorization from the relevant
government is necessary. A MOA also covers the company's permitted capital, in addition to the
company's objectives. The Memorandum of Association informs shareholders, creditors, and

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anyone else interacting with the firm on the company's essential rights and powers. The provisions
of the MOA also assist potential shareholders in making the best judgment possible when
considering an investment in the firm. In the case of a private limited company, the MOA must be
signed by at least two subscribers, and in the case of a public limited company, it must be signed
by at least seven members.

Article of Association :

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The company's constitution is called the Articles of Association (AOA) . An Article of Association
(AOA) provides out another principles for how a limited business will operate, as well as who will
serve as the firm's managing director, chairman, and directors. An AOA also defines how the
company's bank account will be managed, how shareholder decisions will be made, and what the
necessary majority for making decisions will be. For affixing on the Articles of Association:

For Authorized Capital Stamp (BDT)

Up to 10,00,000.00 2,000.00
10,00,000.00 up to 3,00,00,000.00 4,000.00

More than 3,00,00,000.00

10,000.00

A memorandum of association (MOA) and articles of association must be prepared by the firm to
be established (AOA). After name clearance, start a corporation in Bangladesh. They are
responsible for drafting the Association of Article (AOA) and the Association of Memorandum
(MOA). As part of the RSJC compliance requirements, one must write them with other kinds. It
should engage a competent legal firm capable of achieving ones prospective company's essential
objectives and drafting them appropriately in one company memorandums.

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STEPS OF FORMING A PRIVATE COMPANY IN BANGLADESH:

Name
clearanc
e

Struck Off
Registra
tion

Issuance of
Return
Certified
filling
Copies

Winding
Up

NAME CLEARANCE:

 Name Clearance (NC) is a pre- requisite for registration of a new entity (other than Foreign
Company and Partnership Firm).
 The promoters of an entity (other than Foreign Company and Partnership Firm) need to
apply for and get name clearance for the entity prior to applying for registration.
 The promoters submit NC application to the designated RJSC office.
 The promoters pay NC application fee to the designated RJSC office counter.
 On receipt of NC application and fees, RJSC provides name clearance for one of the
proposed names ( minimum 1 no. and maximum 10 nos.) for the new entity upon
satisfaction that it does not closely match or resembles with any of the already taken names
( registered, booked or under the process of registration of the same entity type).
 Only 1 name is cleared from among the proposed names for a new entity in one NC
application.

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  The name clearance remains valid for thirty (30) days from the date of issues.
 If applied for, the validity of name clearance may be extended up to 60 days first and
thereafter up to 90 days from the date of the first issue.
 The promoters need to apply for registration of the cleared name within the validity (as
stated above) of name clearance.
 NC is not required for registration of a Foreign Company or Partnership Firm.

Documents Constituting a NC Application

 A NC application.
 Minutes of the 1st General Meeting of the promoters (for company only).

REGISTRATION:

1. The promoters of a new entity (having name clearance, where applicable) apply for
registration with necessary documents, prescribed forms and schedules, stamps and fees,
as appropriate to the entity type. The promoters-
 Prepare Memorandum/ Articles of Association, forms and schedules etc. as appropriate
to the entity type.
 Collect necessary special adhesive stamps, where applicable, from treasury by
depositing money through treasury challan in Bangladesh Bank (treasury officials affix
the stamps on the Memorandum and Articles of Association and put seals and signature
on the stamps).
 Submit registration application in the designated RJSC office.
 Pay the registration fee at the designated RJSC office counter.
2. RJSC issues a “ Certificate of Incorporation” upon satisfaction that the promoters-
 Obtained name clearance of the proposed entity (not applicable for Foreign Companies
and Partnership Firms) prior to the registration application.
 Submitted the registration application within the validity period of the name clearance.
 Prepared and submitted the Memorandum and Articles of Association, prescribed
forms and schedules etc.as applicable.
 Provided applicable stamps and fees.

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 Documents Constituting a Registration Application:

PRIVATE COMPANY (1994; Companies Act)

 Memorandum and Articles of Association, original + 2 copies.

 Filled in Form I ; Declaration on Registration of Company [Section 25].
 Filled in Form VI : Notice of situation of Registered Office and of any change therein
[Section 77].
 Filled in Form IX: Consent of Director to act [Section 92]
 Filled in Form X: List of persons Consenting to be Directors [Section 92].
 Filled in Form XII: Particulars of the Directors, Manager and Managing Agents and of any
change therein [Section 115].
 Evidence of Name Clearance.
 Special Adhesive Stamps and Stamps and Treasury Challan from Bangladesh Bank to
Treasury (photocopy) of collecting the Stamps.

RETURN FILING:

 Registered entities are to file to RJSC documents pertinent to management / operation of

the respective entity in prescribed Forms and Schedules (called Return Filing).
 There are two types of Returns Filling, a) Annual Return Filing and b) Returns Filing for
any changes in an entity.
 Entities submit returns for filing at RJSC.
 Entities pay filing fee and late filing fee (if applicable) to RJSC counter.
 RJSC scrutinizes returns.
 In case of any incomplete / incorrect submission, RJSC notifies the entity for remedial
measures.
 RJSC archives approved returns.

Returns to be Submitted:

PRIVATE COMPANY (companies Act; 1994)

Private companies are to submit following returns of filing:

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 Annual Returns
 Schedule X – Annual summary of share capital and list of shareholders, Directors: to
be filed within 21 days of AGM [Section 28].
 Balance Sheets: to be filed within 30 days of AGM.
 Profit and loss account: to be filed within 30 days of AGM.
 Form 23B- Notice by Auditor: to be filed within 30 days of receiving appointment
information from the company [ Section 210 (2)]
2. Return of Change:
 Filled in form III – Notice of Consolidation, Division, subdivision, or conversion into
stock of shares: to be filled within 15 days of consolidation and division etc. [Section
53 and 54].
 Filled in form IV- Notice of increase share capital: to be filed within 15 days of increase
of share capital/ member [ Section 56].
 Filed in form VI- Notice of situation of Registered Office and of any change therein:
to be filed within 28 days of establishment or change [ Section 77].
 Filed in form VIII- Special Resolution/ Extraordinary Resolution including name
change, conversion into public company, alternation of the memorandum of
association, alternation of articles of association etc: to be filed within 15 days of the
meeting [ Section 88( 1)].
 Filed in form IX- Consent of Director to act: to be filed within 30 days of appointment
[ Section 92].
 Filed in form XII- Particulars of the Directors, Manager and Managing agents and of
any change therein: to be filed within 14 days from the date of appointment or change
[Section 115].
 Filed in form XV- Return of allotment: to be filed within 60 days of allotment [Section
151].
 Filed in form XVIII- Particulars of mortgages or changes: to be filed within 21 days of
creation of the mortgage or charge [Section 159 and 391].
 Filed in form XIX- Particulars of Modification of Mortgage or Charge: to be filed}
within 21 days of the date modification [Section 167(3) and 319].

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Winding Up:

1. Mode of Winding Up
The Winding up of a company may be either i. By the court; or ii. Voluntary a.
Sub-Divisions of Voluntary Winding Up
i. Members Voluntary Winding Up: wherein a declaration of solvency to pay debts
is made
ii. Creditors Voluntary Winding Up: wherein a declaration of solvency is not made
iii. Subject to supervision of court: wherein a company has resolved to wind up
voluntarily and the court makes an order on consideration of a petition by the
member (s) or the creditor (s) that the Voluntary Winding up shall continue but
subject to supervision of the court

2. Winding Up by the Court

i. The Company or any creditor or creditors or the Registrar submits petition to

the court for Winding up of the company by the court.
ii. Winding up of a company by the court is deemed to commence at the time of
presentation of the petition for the Winding Up.
iii. The petitioner/the company files with the Registrar a copy of the Court order
within thirty (30) days of the court order.
iv. The Registrar notifies in the official gazette that such a court order has been
made. v. The court may, at any time after an order for Winding up, in
consideration of an application of any creditor or contributor, make an order
staying the Winding up proceedings either altogether or for limited time.
v. The court may appoint other than the official receiver a person or persons as
official liquidator or liquidators for the purpose of conducting the proceedings
of winding up.
vi. The official liquidator files with the Registrar audited accounts.
vii. When the affairs of the company is completely wound up the official liquidator
files with the Registrar court order of dissolution within fifteen (15) days of such
an order.

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3. Voluntary Winding Up

i. A company may adopt resolution, special resolution or extraordinary resolution

for Voluntary Winding up.
ii. A Voluntary Winding up is deemed to commence at the time of passing of the
resolution.
iii. The company within ten (10) days of resolution notifies in the official gazette
and in newspaper that such a resolution has been taken.
iv. Members Voluntary Winding up: In this case, prior to passing of the resolution
of Voluntary Winding up, the directors at a meeting make a declaration of
solvency that the company is capable to pay its debts within a period not
exceeding three (3) years. The declaration is filed with the Registrar.
v. Creditors Voluntary Winding up: In this case, a declaration to pay debts is not
made.
vi. The company shall appoint one or more liquidators.
vii. As soon as the affairs of the company are fully wound up and final meeting
held, the liquidator within one (1) week of the meeting files with the Registrar
final accounts and returns of the final meeting.
iv. The company shall be deemed to be dissolved on expiration of three (3) months
of registration of returns of the final meeting.
v. The dissolution period may however be extended by the court on consideration
of any petition.
vi. Winding up subject to supervision of court: At any stage of the Voluntary
Winding up process, the court may make an order, on consideration of a petition
by the member (s) or the creditor (s), that the Voluntary Winding up shall
continue but subject to supervision of the cour

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Issuance of Certified Copies:

a) RJSC is the sole authority that keeps records of all registered entities
(companies, trade organizations, societies and partnership firms).

b) Anyone can apply for certified copy of any of such records of an entity

c) However, the profit & loss account of a company is not open to all. Only
authorized personnel of the respective company can apply for it.

d) On receipt of an application and requisite fee, RJSC issues certified copy of

the records applied for.

Documents Constituting an Issuance of Certified Copies Application

i. One applies for certified copy of record (s) through website

Documents are issued PRIVATE COMPANY for which certified copies

(Companies Act, 1994)

a) Identified by unique nature

i. Articles of Association or part thereof

ii. Memorandum of Association or part thereof
iii. Certificate of incorporation
iv. Declaration on registration of company
v. List of persons consenting to be directors (1st Directors)

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b) Identified by the applicable year

i. Annual summary of share capital and list of

shareholders, Directors
ii. Balance Sheet
iii. Profit & Loss Account (only to the authorized person of
the respective company)
iv. Notice by Auditor

c) Identified by the effective date

i. Notice of consolidation, division, subdivision or

conversion into stock of shares
ii. Notice of increase of share capital
iii. Notice of situation of registered office and of any change
therein
iv. Special Resolution/Extraordinary Resolution
v. Consent of director to act
vi. Particulars of the Directors, Manager and Managing
Agents and of any change therein vii. Return of
allotment
vii. Particulars of mortgage or charges
viii. Particulars of modification of mortgage or charge
ix. Memorandum of satisfaction of mortgage charge
x. Instrument of Transfer of Share
xi. Alteration of Memorandum of Association xiii.
Alteration of Articles of Association
xii. Name change
xiii. Conversion of private company into public company
xiv. Certificate of Registration of mortgage or charge
xv. Certificate of Registration of modification of mortgage
or charge

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 xvi. Certificate of Registration of satisfaction of mortgage or
charge
xvii. Struck off certificate
xviii. Wound up certificate

Struck Off:

i. Where the Registrar has reasonable cause (like annual returns are not submitted
for a long period etc.) to believe that a company is not carrying on business or
in operation, sends to the company a notice (1st notice) inquiring whether the
company is carrying on business or in operation.
ii. If the Registrar does not within thirty (30) days of sending the notice receive
any answer thereto, shall within fourteen (14) days, after the expiration of the
said thirty (30) days send to the company a 2nd notice stating that if an answer
is not received to the 2nd notice within thirty (30) days from the date thereof, a
notice will be published in the official Gazette with a view to striking the name
of the company off the register.
iii. If the Registrar either receives an answer from the company to the effect that it
is not carrying on business or in operation, or does not within thirty (30) days
after sending the 2nd notice receive any answer, he may publish in the Official
Gazette, and send to the company a notice that, at the expiration of ninety (90)
days from the date of that notice, the name of the company mentioned therein
will, unless cause is shown to the contrary, be struck off the register and the
company will be dissolved, and iv. In such a case the Registrar may send a copy
of the notice to the company while sending it to the concerned authority for its
publication in official Gazette.

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Conclusion

The report is designed as a diagnostic tool from which an agreement will emerge
regarding the way forward for Bangladesh. As recorded in this report, legal
enforcement, government agencies and market behavior have followed in weak
corporate governance in Bangladesh. At this stage only broad recommendations are
provided. Specific recommendations will be formulated in following stages of this
project. Corporate Governance is a term that describes the interaction of government
regulators, shareholders to provide quality Information to shareholders and the market
at large. Stakeholders plays an important role to creating an environment and
transparency and accountability are highly encouraged.

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