Business Law Class: Companies Act 1994

Types of Companies in Bangladesh

• Private Company
• Public Limited Company
• One Person Company (OPC)
  • Introduced after the second amendment on 26 November 2020.

Private Limited Company

Definition

1. Restriction on Share Transfer
   • Shares cannot be transferred freely.
2. Prohibition
   • Cannot invite the general public to buy shares.
3. Maximum Number of Shareholders
   • Limited to 50, excluding employee-shareholders.
4. Minimum Shareholders
   • At least two members.

Employee-Shareholder

• Employees who are also shareholders do not count towards the 50-member limit.

Public Limited Company

• Requires at least 7 members.
• Unlimited maximum number of shareholders.

One Person Company (OPC)

Characteristics

• Consists of a single natural person.
• No corporate body can be a shareholder.

Company Registration

Process

• Name Clearance
  • Must be obtained from RJSC.
  • Valid for 30 days after approval.
• Required Documents
  • Memorandum of Association (constitution)
  • Articles of Association (day-to-day operations)

Authorized vs. Paid-Up Capital

• Authorized Capital
  • Maximum amount registered with the government.
• Paid-Up Capital
  • Amount actually paid by shareholders.

Privileges of Private Limited Companies

1. Minimum Members
   • Only two members required for registration.
2. No Statutory Meeting Required
3. Directors
   • No rotation required.
4. No Prospectus Needed

Memorandum and Articles of Association

Key Points

• Memorandum
  • Name, address, objectives, liabilities of the company.
• Articles
  • Regulations for daily management.

Registration Requirements

• Must be registered with RJSC.
• Articles must accompany the memorandum.

Compliance and Reporting

Annual General Meeting (AGM)

• Must be held within 9 months of the financial year-end.
• Notice of at least 14 days is required.

Financial Statements

• Must be authenticated and submitted within 180 days of year-end.

Amendments and Restrictions

• Section 11
  • Indicates company types using suffixes like LTD, PLC, OPC.
• Share Transfer
  • Instrument of transfer required for share transfer.
• Prohibition on Buying Own Shares
  • Restricted by Section 58.

Auditing and Director Requirements

• Auditor Appointment
  • Regulated under Section 210.
• Directors
  • Must hold a minimum of one share.

Conclusion

• Companies in Bangladesh are regulated under the Companies Act 1994.
• Different types of companies have specific requirements and privileges.