Presentation Topic :

Company Act(1994)
Group Name : Sunshine

Submitted To:
Rumana Parveen
Assistant Professor
Department Of Business Administration,
NUBT, Khulna
Course Name : Business Law
Course Code : MBA 0602

Group Members :
1.Khandakar Ahammad Jubayer
Id : 21190210117

2. Md. Abu Hurayra

Id : 21190210120

3. Sheikh Sajjad Hossain

Id : 21190210126
COMPANY
Normally a company is a legal entity which is formed
by different individuals to generate profits through
their commercial activities.

Under section 2(C) of the Act,

‘Company’ means a company formed and registered
under this act or an existing company.
According to section 2(h) of the Act,
‘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.
Types of companies
A company can be classified into various types
depending upon the following requirements:

Classification Of Companies Based On The

Number Of Members :
• Public Company (Or Public Limited Company) :
A public company is a corporation whose ownership
is open to the public. In other words, anyone can buy
the shares of a public company. There are no
restrictions to the number of members of a public
company or to the transferability of shares.
Characteristics of a Public company

(a)Member – 07 to limited by the no. of shares.

(b)Shares can be easily transferable.
(c)Can invite to the public to subscribe for its shares
or debentures.
(d) At least 03 directors are required.
(e) At least 1/3rd of the members of the directors are
must retired.
(f) A public company can not start its business until it
obtains a ‘certificate of commencement.’
A public limited company may be converted into a
private limited company and vice versa.
Private Company (Or Private
Limited Company)
A private company cannot be owned by the public; it
restricts the number of members, the right to transfer
its shares and prohibits any invitation to the public to
subscribe for any shares or debentures of the
company.
Characteristics of a Private
company
(a) Can not transfer its shares or debentures.
(b) Does not require ‘minimum subscription’.
(c) At least 2 directors in the management.
(d) Can commencement business immediately on
incorporation.
(e) Statutory meeting and statutory report is not mandatory
with in 1-6 month of the start of the company.
(f) Members are between 02-50.
(g) Maintenance of member index is not mandatory.
(h) No compulsory retirement of the directors.
(i) Can not invite the public to purchase its shares or
debentures.
Classification Of Companies Based
On The Liability Of The Members
The registered companies can be classified into the
following categories based on the liabilities of
members:

Companies Limited By Shares :

These companies have a defined share capital and the
liability of each member is limited by the
memorandum to the extent of the face value of shares
subscribed by him.
Companies Limited By Guarantee :
These companies may or may not have a share capital
and the liability of each member is limited by the
memorandum to the extent of the sum of money s/he
had promised to pay in the event of liquidation of the
company for payments of debts and liabilities of the
company.

Unlimited Companies :
There is no formal restriction to the amount of money
that the shareholder/member of the company has to
pay in the event of the liquidation of an unlimited
company.
Conversion of Private Limited Company
into Public Limited Company :
• A private limited company faces some major
problems because of a number of legal restrictions
imposed upon it. The number of member of
private company is limited. The private limited
company can not invite the public to subscribe for
its shares. For all these reasons the amount of
capital of a private limited company is
comparatively less.

• To overcome all the problems, a private limited

company can be converted into public limited
company by maintaining the following rules:
• According to the provisions of section 154(1) of
the Companies Act, in some special procedures a
private limited company can be converted into a
public limited company.
1. First of all, the private limited company must
have passed a special Resolution and with that
changes must have to be brought- in under the
following sections of Articles of Association:
I. Limitation of the maximum number of members.
II. Rule about restrictions on the transfer of shares.
III. Rules on prohibition of invitation to the public to
buy shares and debentures.
2. Secondly, after the above alterations the New
Articles of Association shall have to be
delivered to the Registrar of companies along
with the following documents-
I. Prospects or a statement in lieu of prospectus.
II. A list of the names of the Board of Directors.

It is mentioned that only after compliance of the

above statutory rules and regulations the
minimum number of members must be seven for a
private limited company if it is to be converted
into a public limited company.
• When the above documents become acceptable by
the Registrar of companies, then he will write the
new name of the company in the register of
registration in place of the company’s old or
previous name. And also the Registrar will provide
an altered certificate of incorporation to the
company.
Government Companies. :
Government Company is a company or an
organization in which at least 51% of the paid up
share capital is held by the central government or the
state government or partly by both central and state
government.
Foreign company :
Companies falling under the following two classes are
called Foreign Companies-591.
Companies incorporated outside Bangladesh which,
after the commencement of the Act of 1956,
established a place of business within Bangladesh.
Companies incorporated outside Bangladesh which
have, before the commencement of the Act of 1956,
established a place of business within Bangladesh and
continue to have the same at the commencement of
the Act.
Memorandum of Association :
The Memorandum of Association is a document
which contains the fundamental rules regarding the
constitution and activities of a company. It is the basic
document which lays down how the company is to be
constituted and what work it shall undertake.
The purpose of the memorandum is to enable the
members of the company, its creditors, and the public
to know what its powers are and what is the range of
its activities. It can not be changed.
Articles of Association :
Articles of Association is a document which contains
rules, regulations and bye-laws regarding the internal
management of the company. Articles must not
violate any provision of the memorandum or any
provision of Companies Act. The rules laid down in
the memorandum. It can be changed later as
necessary.