Rules regarding Investment,

Financing, Dividend, Stock

Exchange & capital structure
mentioned in the Companies Act
1994
Presented to Presented by
Mohammad Abdul Jabber Yesin Arafat
Associate Professor, Roll: 126-136, 27th batch,
Department of Management, Department of Management,
University of Dhaka University of Dhaka
Investment
The Company Act Bangladesh, 1994 (the Act) regulates investment in companies in
Bangladesh.​
 The Act defines "investment" as the acquisition of any security of a company.​

 The Act sets out the following restrictions on investment in companies:

 No person shall hold more than 10% of the total issued shares of a
company, unless the company is a listed company or the person is a qualified
investor.​
 No person shall hold more than 25% of the total issued shares of a
listed company.​
 No person shall acquire more than 5% of the total issued shares of a
listed company in any financial year without the prior approval of the Securities
and Exchange Commission (SEC).​
Investment

 The Act sets out the following requirements for investment in

companies:
 All investments in companies must be made in cash or by way of
transfer of assets at their fair market value.
 All companies must maintain a register of shareholders.
 All companies must disclose information about their shareholders to the
SEC.
 STOCK EXCHANGE
 The Act establishes the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE)
as the two stock exchanges in Bangladesh.
 The SEC is responsible for regulating the stock exchanges in Bangladesh.
 The following types of securities are traded on the stock exchanges in Bangladesh:
 Equity shares
 Debentures
 Mutual funds
 Corporate bonds
 To list on a stock exchange, a company must meet certain requirements, including:
 The company must have a minimum paid-up capital of BDT 300 million.
 The company must have a minimum number of shareholders of 1,000.
 The company must have a good track record of profitability
DIVIDEND

The Act sets out the following requirements for the declaration of dividends:.

 The decision to declare a dividend is made by the board of directors of

the company.
 The company must have a distributable profit.
 The company must have paid all of its outstanding debts.
 The dividend must be declared in accordance with the company's articles
of association.
 Once a dividend has been declared, it must be paid to the shareholders
within 30 days.
Capital Financing
The Act sets out the following requirements for financing capital:

 Companies can finance their operations through a variety of sources,

including equity, debt, and retained earnings.
 Equity finance is raised through the sale of shares in the company.
 Debt finance is raised through borrowing from banks or other financial
institutions.
 Retained earnings are the profits that the company has accumulated over
time.
 Companies must maintain minimum capital adequacy ratio.
 Companies must disclose information about their financing to the SEC.
Summery

The Companies Act 1994 of Bangladesh outlines rules on prudent

investment, diverse financing sources, dividend declaration, stock
exchange listing, and capital structure. It governs how companies
manage funds, raise capital, distribute dividends, comply with stock
exchange regulations, and structure their capital, promoting transparency
and safeguarding shareholder interests.