Assignment On

Process or Steps in the formation of a private limited company OR

How to register a private limited company in Bangladesh

Course Title: Introduction to Business Law

Course Code: BUS 360, Sec: 04
Semester: Summer 2019
Date of submission: July 29, 2019

Submitted to:

Mr. Iftekhar Mahfuz

Lecturer of Management
School of Business
Submitted by:

Name ID
Mohammad Junaid 1610990
Nazrul Islam Rony 1611082
Rahmant Ullah Abir 1611168
Al Imran 1610918
Fahim Ul Alam Sifat 1721928
 Letter of Transmittal
25 March, 2019
Mr. Iftekhar Mahfuz
Lecturer of Management
School of Business
Independent University, Bangladesh

Subject: Report on steps in the formation of a private company.

Dear Sir,
We, the members from our team would like to thank you for giving us the opportunity to work
together and carry out this report through our own ideas, thoughts and knowledge. This assigned
task gave us the opportunity to explore and know more about the process or steps of forming a
private limited company in depth.

Almost all the instructions given in class have been followed by us. Concepts and theories that
we have learn in our course have also been applied.

We will be glad to clarify the variations that may arise and will be more than happy to accept
suggestion related to the survey and the report. Finally, we thank you for all the support that
made our report effective and managed in accordance with our common hope.

Sincerely yours,
Mohammad Junaid
Nazrul Islam Rony
Rahmant Ullah Abir
Al Imran
Fahim Ul Alam Sifat

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 Acknowledgement
The success of this report depends on the contribution of a number of people, especially those
who take the time to share their thoughtful guidance and suggestion to improve this report.
First of all, we would like to pay our gratitude to almighty Allah, who has given us patience to
complete this report. Because working on this report for a month and then preparing a report
regarding our experience is quite tedious job.

We would like to thank Independent University, Bangladesh (IUB) for planning such a course
that gave us the chance to gather practical knowledge about what we learnt in 03 months. The
knowledge we gathered throughout the course would help us to develop our future career.

We are also grateful to our honorable faculty of Business School Mr. Iftekhar Mahfuz for his
cordial and continuous support during the report.

We are also grateful to our parents for being our mental support. Lastly, we must be thankful to
our friends for their endless inspiration not to be hopeless and keep working harder.

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 Table of Contents

Executive Summary....................................................................................................................................... 1
Introduction .................................................................................................................................................. 2
Private Company ........................................................................................................................................... 3
Payment of equity: .................................................................................................................................... 3
Register of independent contractors and VAT number: ........................................................................... 3
Corporate governance: ............................................................................................................................. 4
Liability ...................................................................................................................................................... 4
Required Documents: ............................................................................................................................... 5
Return Meaning Requirements: ............................................................................................................... 5
Required Documents for Trade License:................................................................................................... 6
The Registrar of Joint Stock Companies and Firms (RJSC) ............................................................................ 7
Private Company Registration in Bangladesh ............................................................................................... 9
Required documents:................................................................................................................................ 9
Steps of forming a private company in Bangladesh ................................................................................... 11
1. Name clearance: ................................................................................................................................. 11
2. Register company: .............................................................................................................................. 13
3. Return filing:........................................................................................................................................ 14
4. Winding up: ......................................................................................................................................... 16
5. Issuance of Certified Copies: ............................................................................................................... 16
6. Stuck Off: ............................................................................................................................................. 17
Documents for private company ................................................................................................................ 17
Memorandum Association.......................................................................................................................... 18
Articles of Memorandum Association ........................................................................................................ 18
Key Elements of Memorandum Association ............................................................................................... 19
Information are Included in this Document: .............................................................................................. 23
Conclusion ................................................................................................................................................... 26
Reference .................................................................................................................................................... 27

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Executive Summary
Company is registered under the Companies Act 1994. The Regulatory body for incorporating a
company is the Registrar of Joint Stock Companies and Firms (RJSC) which facilitates
formation of companies and firms. The body is also responsible for keeping track of all
ownership related issues as prescribed by the laws in Bangladesh. Bangladesh is considered a
key investment destination due to its geo location, cheap labor and competitive production costs.
Incorporating a business in Bangladesh has been simplified over the years due to interventions
by the Government. This Article is designed to guide and assist the Promoters by providing an
easy step by step guideline on incorporation of a Company in Bangladesh. Promoters should
keep in mind that except some very exceptional cases, Bangladesh allows incorporation of
company with 100% foreign shareholding and no local joint venture is required. The promoters
should fix a desired name for the Company and apply for name clearance in the RJSC server.
Upon application, the promoter will receive a Computer Generated Receipt. Investors are
required to make payment of the requisite fees to RJSC for name clearance and upon verification;
RJSC provide a name clearance certificate to the prospective promoters. This name clearance
documents serve as the base for all further processes for company registration. It is to be noted
that the promoters can remotely incorporate a company in Bangladesh through their authorized
lawyers/agents in Bangladesh. Companies have to obtain a trade license from the local
governmental authorities in Bangladesh. For example, in case of Dhaka, a trade license has to be
obtained from respective City Corporation. The cost of obtaining a trade license is approximately
USD 100 and it can be renewed on yearly basis. Typical time frame is three-four working days.
It is of vital importance to draft a solid and consolidated constitution document of the company.
The Memorandum of the Company should state the primary business objectives, the amount of
paid up capital & authorized capital and state the list of the shareholders along with their
respective shareholdings. It is to be noted here Bangladesh does not allow One Person Company
(OPC) and minimum two (2) shareholders are required to set up a private limited company.

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Introduction
A company may be determined as incorporation combination which is an unnatural person,
having an independent legal entity, with a perpetual succession, a common seal, A common
stock capital comprised of transferable shares an carrying limited liability in relation to its
members. There are mainly two types of company a private limited company (ltd) is often a
small business such as an independent retailer in a market town. Shares do not trade on the stock
exchange. A public limited company (PLC) is usually a large, well-known.

Before coming in our focus points I would like to share some information, why investors like to
invest in Bangladesh! As it is unstable economic country, political instability, corruption,
government people’s artificial system and many more problems are live. Yes, problems are there
but plenty of opportunities attract investors to invest in preferred business sectors in Bangladesh.
Anything can possible in Bangladesh if you know the way!! Anyway, labor cost, transport cost,
raw materials & land lease are cheaper that will help out to generate revenue. Our key point is
how to register a company in Bangladesh? No legal identity bear of enterprise without
registering a company. You can NOT inject money without legal business. So, business
registration is the primary job of investment.

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Companies Act:

1994 (Act XVIII of 1994) governs company law in Bangladesh. It received the assent of the
President of the People's Republic of Bangladesh on 11 September 1994.

Private Company
A private company is one which, by its articles, a) restricts the right of the members to transfer
their shares, if any; b) limits the number of its members 2 to 50; and c) prohibits any invitation to
the public to subscribe for any shares in, or debentures of, the company. (Companies Act, 1994)

Contents for starting a private company-

Directors: A private company must have at least 2 directors.

Shareholders: Not less than 2 nor more than 50 members.
Capital: A private company must collect minimum capital which is essential for its purpose,
all of, share and business is mandatory.

Payment of equity:
Equity can be paid in other ways than in money. Such cases must be explained in a report from a suitably
qualified person, after an accountant or lawyer has evaluated the financial worth of the payment. The
nature of the report must be a description of the payment, information about the methodology used in the
evaluation, and the premise of and information about the return. Payment of equity by way of a work
contribution is forbidden, but payment may be made by demands to settlers.

Taxes and obligations:

Income tax is 20% for public liability companies. Dividends are subject to capital gains tax.

Register of independent contractors and VAT number:

Businesses that pay salaries must be registered on the register of independent contractors at the tax office.
If the business is subject to value-added tax, this must also be reported to the relevant Tax Director no

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more than 8 days before the business formally begins. The business must also be assigned a VAT number
before the operation formally begins.

Calculated remuneration –Salary

According to the Act on Income Tax, individuals must calculate a certain minimum income for
themselves for work in their own business. This is called calculated remuneration. Guideline
figures on what self-employed individuals shall calculate as salaries can be found on the Internal
Revenue website.

Corporate governance:
The management structure of the public limited company consists of three layers, the shareholders’
general meeting, the supervisory board and the management board, whereas the management structure of
the private limited company usually lacks the layer of the supervisory board, unless it is prescribed by the
articles of association of the private limited company.
For the management board, consent of the supervisory board is required for conclusion of transactions
which are beyond the scope of everyday economic activities. Where the company lacks a supervisory
board, these rights and obligations are exercised by the meeting of the shareholders. The shareholders’
general meeting is the highest management body of a public limited company whereas the respective
body of a private limited company is called the meeting of shareholders. These management bodies are
vested with powers to take the most crucial decisions from the perspective of the company’s development
– distribution of dividends, approval of financial statements, election and recalling of the members of the
supervisory board, etc.

Liability:

A member of the management board is expected to perform his or her duties with due diligence.
Management board members shall be jointly and severally liable for damage wrongfully caused to the
company, unless they prove that they have acted with due diligence. The same applies with respect to the
supervisory board members.

Generally, the liability of shareholders for the limited company’s obligations is limited to their payments
into the company’s share capital.

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However, shareholders are held liable for any damage wrongfully caused to a public limited company,
another shareholder or third persons.

Required Documents:

Some of the items you will almost certainly need upon registration of your Bangladeshi company
includes:

Share certificates for each of the shareholders

Register for shareholders, shares, directors etc.
Company seal for the company
A rubber stamp for the company

Applying for Trade License, Tax Identification Number and other licenses

After the incorporation, you should buy a commercial space or rent some space in any
commercial area.

Then you need to apply for Trade License and Tax Identification Number. Depending on your
company’s business activities, you may need to obtain more business licenses.

Return Meaning Requirements:

Annual Return: Each calendar year, an Annual General Meeting must be held. The AGM must
be conducted within 18 months of company incorporation, after which no more than 15 months
can elapse between one AGM and the next.

Regular Return: In case of any change in the board of directors or in the shareholding structure
or any other change, a relevant return must be filed with the RJSC within a certain period of time.

Getting trade license in Bangladesh is not complicated but due to lack of transparency and
corruption it is almost impossible to get a trade license without bribe. So, if you know that, the

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cost of getting a trade license is BDT 2000 and you are going with a light mind to get your
license then I’ll tell you to stop and check your money bag for extra lubrication money.

Process: The process is managed by the City Corporation or city council where the business
exists. A license is issued exclusively in the name of the licensee and such license is not
transferable. The licensee shall not use the license for any other purposes, except for the purpose
and nature of profession, trade or calling it was issued. A renewed Trade License is provided by
the concerned staff of the zonal taxation office. A fee for trade license has to be deposited at any
Bank as indicated on the Trade License form.

Required Documents for Trade License:

1. In case of general Trade License – Attested Copy of Rent Receipt or Rental Agreement and
also the copy of the Holding Tax payment receipt.

2. In case of Trade license for industries – Everything mentioned in serial no. 1 plus:

No objection declaration on the surrounding

Location Map,
Copy of fire certificate
Declaration on non-judicial stamp of TK 150/- to abide by the rules & regulation of DCC,
One copy of passport size photograph

3. In case of Clinic/Private Hospital: permission from the Director General of Health.

4. In case of Limited Company:

Memorandum of Article
Certificate of In-Corporation

5. In case of Printing Press & Residential Hotel – Permission from Deputy Commissioner (DC).

6. In case of Recruitment Agency – License from Manpower Man-power export Bureau.

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7. In case of Arms and Ammunition – Copy of Arms License.

8. In case of Drug and Narcotics – Copy of Drug/Narcotics License.

9. In case of Travailing Agency – Approval from civil aviation authority.

Over to you:

Getting trade license should be hassle free to make doing business easy. Like many other things
in this country it does not work that way. But to promote business we need to make the process
simple and easy. The Registrar of Joint Stock Companies and Firms (RJSC) is the sole authority
which facilitates formation of companies etc.; and keeps track of all ownership related issues as
prescribed by the laws in Bangladesh.

The Registrar of Joint Stock Companies and Firms (RJSC)

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The Registrar of Joint Stock Companies and Firms (RJSC) is the sole authority which facilitates
formation of companies etc.; and keeps track of all ownership related issues as prescribed by the
laws in Bangladesh.

RJSC deals with the following types of entities are -

1. Private Company

2. Public Company

3. Foreign Company

4. Trade Organization

5. Societies and

6. Partnership firms.

In order to register a company, one has to visit primarily the website of the office of the Registrar
of Joint Stock Companies and Firms (RJSC). The web address is www.roc.gov.bd

RJSC has its head office in Dhaka office location:

Head Office, Dhaka:

TCB Bhaban (6th Floor),

Kawran Bazar, Dhaka - 1215.

Tel: 88028189401, 88 02 8189403, Fax: 88 02 8189402, Email: rjsc@roc.gov.bd

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Private Company Registration in Bangladesh

When entrepreneur hoping to start own business in Bangladesh, need to register the firm under
the Companies Act, 1994.

Required documents:

For the purpose of incorporation of Bangladesh, the following information is required by the
company register-

Company name
Memorandum of Association and Articles of Association
Shareholder particulars
Registered address
Singed form IX and subscriber page

To register a company manually, one has to go to RJSC office and fill the application form. One
can also register through website of the office of the Registrar of Joint Stock Companies and
Firms (RJSC). The web address is www.roc.gov.bd.

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IFC's project aimed at automating and simplifying business registration has helped reduce time
required to register a business with the Registrar of Joint Stock Companies (RJSC) from 57 days
in 2008 to 3 days in 2010.

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Steps of forming a private company in Bangladesh

1. Name clearance:

RJSC name clearance is the first stapes for a company formation or registration to start business
in Bangladesh. RJSC (The Registrar of Joint stock Companies and Firms) is the only legal
authority to issue Name Clearance Certificate.

There are some rules in choosing company name-

The same name is not applicable for Company / formation in Bangladesh, (Which is certified
by RJSC). Its hearing sound, written style and sight will not be same all the way.
Name could not be similar with international company, organization, social & Cultural
organization.
Name cannot be permissible any existing company, business, Social, Cultural, Entertainment
& Sporting organization’s name.
Company’s name will not be similar Govt. Organization or Company.
Nationally fame person’s name or famous family’s name need to permission from particular
person and take permission to Government.
If interested to take freedom fighter related name for company must be essential approval
of Freedom Fighter Ministry of Bangladesh.
Company’s name could not be similar of Govt. development program or development
organization.
No name will applicable of political party’s slogan, political party’s name and program
which are existing now.
Slang word, Rebuke not possible for company formation in Bangladesh.
Cannot select any name which is broken Social, Religious and national harmony.
Earlier established (at least 10 years old) Social organization’s real name, to attend
personally with organizing Committee resolution for registration of social organization’s
real name.

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Social, cultural & sporting organizations can be limited company by taking Ministry
permission otherwise not possible to do.

Violating any name clearance terms & conditions R, RJSC can change providing name
and if name is unchanged a certain time, Registration number will be acquainted of the
company.

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2. Register company:

In this step have to submit all the required information in the RJSC’s website. Also required to
upload Form XI and subscriber page. After finish all the process will receive a bank payment slip
for paying the registration fees along with stamp duty.

After making the payment in the bank, will have to follow up with the RJSC for obtaining the
incorporation certificate. RJSC officials will check the documents and information if they are
satisfied, they will issue the digitally signed Certificate of Incorporation, Memorandum of
Association and Articles of Association, Form XII.

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3. Return filing:

Registered entities are to file returns in prescribed forms & schedules, and RJSC upon
satisfaction approves and archives such records. There are two types of return filing-

Annual return - Each calendar year, an Annual General Meeting (AGM) will held. The AGM
must be conducted within 18 months of company incorporation, after which no more than 15
months can be elapse between one AGM and the next.

Regular return – In case of any change of the board of directors or in the shareholding structure
or any other change, a relevant return must be filed with the RJSC within a certain period of time.

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(Here also have to pay fees for return filing. The amount(s) for return filing is also mentioned in
RJSC website)

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4. Winding up:

A company having resolved to or the court makes an order or Memorandum & Articles of
Association provide so for winding up of the company, submits to RJSC documents of winding
up procedures and dissolution.

Mode of Winding Up -The Winding up of a company may be either by the court, Voluntary,
Sub-Divisions of Voluntary Winding Up.

(Here also have to pay fees for return filing. The amount(s) for return filing is alsomentioned in
RJSC website).

5. Issuance of Certified Copies:

Anyone can apply for certified copy of records of an entity. In response to any such application
and after getting requisite payment, RJSC issues certified copy of the historical records of an

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entity. Profit & loss account is however open to only authorized personnel of the respective
entity.

6. Stuck Off:

RJSC strikes off the Register a company’s name if it is not in operation any more.

So, these are all about the forming processes of a private company in Bangladesh, through RJSC
website. If there is any queries to contact with them. Their contract number, fax, e-mail address
and office address is available on their website.

Documents for private company

1. Schedule X – Annual summary of share capital and list of shareholders and Directors: to be
filled within 21 days of AGM [Section 36].

2. Balance Sheet: to be filed within 30 days of AGM.

3. Profit and loss account: to be filed within 30 days of AGM.

4. Form 23 B: Notice by Auditor: to be filed within 30 days of receiving appointment

information from the company are section 2010 (2)

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Memorandum Association
A Memorandum of Association (MOA) is a legal document prepared in the formation and
registration process of a limited liability company to define its relationship with shareholders.
The MOA is accessible to the public and describes the company's name, physical address of
registered office, names of shareholders and the distribution of shares. The MOA and the
Articles of Association serve as the constitution of the company. The MOA is not applied in the
U.S. but is a legal requirement for limited liability companies in European countries including
the United Kingdom, France and Netherlands, as well as some Commonwealth nations.

Articles of Memorandum Association

A company's articles of association is a document which, along with the memorandum of
association form the company's constitution, defines the responsibilities of the directors, the kind
of business to be undertaken, and the means by which the shareholders exert control over the
board of directors.

The articles of association set out how the company is run, governed and owned. The articles can put
restrictions on the company’s powers – which may be useful if shareholders want comfort that the
directors will not pursue certain courses of action, at least without shareholder approval. By default,
however, the Companies Act 2006 gives a company unlimited powers.

In addition to the articles, which is a public document, the shareholders may enter into a shareholders’
agreement to augment the articles in relation to the running, governance and ownership of the company
that they want to keep out of the public domain.

The following is largely based on British Company Law, references which are made at the end of this
Article.

The Articles can cover a medley of topics, not all of which is required in a country's law. Although all
terms are not discussed, they may cover:

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 The issuing of shares (also called stock), different voting rights attached to different classes
of shares
Valuation of intellectual rights, say, the valuations of the IPR of one partner and, in a similar
way as how we value real estate of another partner
The appointments of directors - which shows whether a shareholder dominates or shares
equality with all of the contributors
Directors meetings - the quorum and percentage of vote
Management decisions - whether the board manages or a founder
Transferability of shares - assignment rights of the founders or other members of the
company do
Special voting rights of a Chairman, and his/her mode of election
The dividend policy - a percentage of profits to be declared when there is profit or otherwise
Winding up - the conditions, notice to members
Confidentiality of know-how and the founders' agreement and penalties for disclosure
First right of refusal - purchase rights and counter-bid by a founder.

Key Elements of Memorandum Association

1. Name Clause:
A company is a legal entity. So, it must have a name to establish its identity. Name Clause in the
Memorandum of Association confers protection against subsequent company registration in the same or
closely similar name. It secures to the company de facto monopoly of corporate trading under a particular
name. A company may have any name except:

ADVERTISEMENTS:

The name of the company including the registered office must also be mentioned in all letters, negotiable
instruments, orders, receipts and other documents written or executed by the company.

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Every company must have its name together with the address of its Registered Office engraved on its seal
and have it mentioned on all official papers and publications.

In case a company fails to observe the provisions of Section 147, it may have very serious consequences
for its officers. For example, an officer signing, on behalf of the company, any bill of exchange,
promissory note or cheque on which name of the company does not appear as per the above provisions,
shall be personally responsible to the holder of such an instrument in case the company fails to make
payment. Besides that, he can also be subject to a fine which may extend up to RS. 5,000.

2. Situation Clause:
Memorandum of Association must state the name of the State in which the registered office of the
company is to be situated. It will fix up the domicile of the company. Address of the registered office of
the company need not be mentioned in the Memorandum of Association.

ADVERTISEMENTS:

But, every company must have a registered office either from the day it begins to carry on business or
within 30 days of its incorporation, whichever is earlier.

Registered office of a company is the place of its residence for the purposes of delivering or addressing
any communication, service of any notice or process of Court of Law and for determining the question of
jurisdiction in any action against the company. It is the place where all the statutory books, records and
registers of the company shall be maintained.

3. Objects Clause:
It is the most important clause in the Memorandum of Association. It defines and limits the scope of
operations of the company. It explains to the members the scope of activity of the company where their
capital will be employed. It gives protection to the shareholders by ensuring that the funds raised for
specified businesses are not going to be risked in another.

The outside public dealing with the company is informed of the extent of the powers of the company. A
company can exercise only such powers as are either expressly stated therein or as May fairly be implied
there from, including matters incidental or consequential to the powers so conferred.

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The words “incidental or consequential to the powers so conferred” do not add any more to the objects of
the company, but covers operations of a similar nature to the business specified. The objects clause must
be constructed independently of each other so as to give full effect to each one of them.

A transaction which cannot reasonably be regarded as arising from the main objects of the company will
not become valid and binding upon the company only because it is for the benefit of the company.

Several decided cases have clearly established that if the main purpose of the company has either been
achieved or cannot be achieved because of impossibility, the company may be wound up.

The company shall not be allowed to continue in existence merely because the secondary objects are still
possible, unless the Memorandum provides that the several objects are to be constructed as independent
objects. The objects of the company must be lawful and well defined. The objects must not be against the
provisions of the Companies Act. The memorandum should state the objects of the company and not its
powers.

According to Section 13(1) the Memorandum of Association of a company must state the following:

1. In case of a company in existence immediately before the commencement of the Companies

(Amendment) Act, 1956 the objects of the company;

2. In the case of a company formed after such commencement –

(i) Main objects of the company to be pursued by the company on its incorporation and objects incidental
or ancillary to the attainment of the main objects;

(ii) Other objects of the company not included in sub-clause (i).

The Act also requires non-trading companies, with objects not confined to one State, to mention the
names of those States to whose territories the objects of the company will extend.

4. Liability Clauses:
Liability clause mentions the liability of members of the company- In case of a company limited
by shares, Memorandum of Association must have a clause to the effect that the liability of the
members is limited to the extent of the amount of the unpaid portion of the shares held by him.

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The Memorandum of Association a company limited by guarantee must state the amount which
each member undertakes to contribute to the assets of the company in the event of its being
wound up.

In a limited company, however, the liability of the directors or any director or manager may be
unlimited, if so provided by the memorandum.

5. Capital Clause:
Memorandum of Association of a limited company having share capital (i.e. company limited by
shares or company limited by guarantee having share capital) must also state the amount of share
capital with which the company is to be registered which is usually called authorized or nominal
capital.

Further, division of registered share capital into shares of a fixed amount is also required to be
given in the memorandum. Each subscriber must take at least one share and write opposite his
name the number of shares he takes.

6. Association Clause:
This clause states that the persons subscribing their signatures at the end of the Memorandum are desirous
of forming themselves into an association in pursuance of the Memorandum.

Memorandum of Association must be signed by seven or more persons in the case of a public company
and by two or more persons in the case of a private company. Signatures shall be attested by witnesses.

There may be one witness for all signatures but one subscriber cannot be a witness to the signatures of
another. Full description, address, occupation, etc. of the subscribers and witnesses must be written.

In the case of a company having share capital, each subscriber is also required to take at least one share
and to write opposite his name the number of shares he agrees to take. Subscribers are required to pay for
these shares after the company is incorporated. They must also sign articles of association of the company.

It is not necessary that all signatories should have any personal beneficial interest in the shares subscribed
for by them. They need not be independent or unconnected.

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All of them may be nominees of a single person and their subscribing names may be merely a formality.
Subscribers to the Memorandum should, however, be competent to contract.

A minor or a partnership firm cannot be a subscriber to the Memorandum. A company may be a

subscriber of another company. No subscriber can withdraw his name on any ground whatsoever once a
company has been incorporated even on the ground that he/she was induced to sign the memorandum by
misrepresentation.

Information are Included in this Document:

Directors:

A Company is essentially run by the shareholders, but for convenience, and day-to-day working,
by the elected Directors. Usually, the shareholders elect a Board of Directors (BOD) at the
Annual General Meeting (AGM), which may be statutory (e.g. India).

The number of Directors depends on the size of the Company and statutory requirements. The
Chairperson is generally a well-known outsider but he /she may be a working Executive of the
company, typically of an American Company. The Directors may, or may not, be employees of
the Company.

Shareholders:

In the emerging countries there are usually some major shareholders who come together to form
the company. Each usually has the right to nominate, without objection of the other, a certain
number of Directors who become nominees for the election by the shareholder body at the AGM.
The Treasurer and Chairperson is usually the privilege of one of the JV partners (which
nomination can be shared). Shareholders may also elect Independent Directors (from the public).
The Chair would be a person not associated with the promoters of the company, a person is
generally a well-known outsider. Once elected, the BOD manages the Company. The
shareholders play no part till the next AGM/EGM.

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Objective and Purpose:

The Objectives and the purpose of the Company are determined in advance by the shareholders
and the Memorandum of Association (MOA), if separate, which denotes the name of the
Company, its Head- Office, street address, and (founding) Directors and the main purposes of the
Company - for public access. It cannot be changed except at an AGM or Extraordinary General
Meeting (EGM) and statutory allowance. The MOA is generally filed with a Registrar of
Companies who is an appointee of the Government of the country. For their assurance, the
shareholders are permitted to elect an Auditor at each AGM. There can be Internal Auditors
(employees) as well as an External Auditor. The Articles of Association of the Company should
be within the scope of the Memorandum of Association. Any matter in the Articles of
Association not within the scope of the Memorandum of Association of the company is void.

Board meetings:

The Board meets several times each year. At each meeting there is an '((agenda' before it. A
minimum number of Directors (a quorum) is required to meet. This is either determined by the
'by-laws' or is a statutory requirement. It is presided over by the Chairperson, or in his absence,
by the Vice-Chair. The Directors survey their area of responsibility. They may determine to
make a 'Resolution' at the next AGM or if it is an urgent matter, at an EGM. The Directors who
are the electives of one major shareholder, may present his/her view but this is not necessarily so
- they may have to view the Objectives of the Company and competitive position. The Chair may
have to break the vote if there is a tie. At the AGM, the various Resolutions are put to vote.

Annual general meeting:

The AGM is called with a notice sent to all shareholders with a clear interval. A certain quorum
of shareholders is required to meet. If the quorum requirement is not met, it is canceled and
another Meeting called. If it at that too a quorum is not met, a Third Meeting may be called and
the members present, unlimited by the quorum, take all decisions. There are variations to this
among companies and countries. Decisions are taken by a show of hands; the Chair is always
present. Where decisions are made by a show of hands is challenged, it is met by a count of votes.
Voting can be taken in person or by marking the paper sent by the Company. A person who is
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not a shareholder of the Company can vote if he/she has the 'proxy', an authorization from the
shareholder. Each share carries the number of votes attached to it. Some votes maybe for the
decision, others not.

Resolutions:

There are two types of resolutions, known as an (Ordinary Resolution and a (Special Resolution.

A Special Resolution can be tabled at a Director's Meeting. The Ordinary Resolution requires the
endorsement by a majority vote, sometimes easily met by partners' vote. The Special Resolution
requires a 60, 70 or 80% of the vote as stipulated by the constitution of the Company.
Shareholders other than partners may vote. The matters which require the Ordinary and Special
Resolution to be passed are enumerated in Company or Corporate Law. Special Resolutions
covering some topics may be a statutory requirement

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Conclusion
Private limited companies and public limited companies have a share capital divided into private
limited company shares and public limited company shares, and the shareholders are not
personally liable forth obligations of the companies – the companies are liable for the
performance of their obligations with all of their assets. Limited companies are established by
concluding notarized certified foundation agreements and adopting articles of association.

Private limited companies may also be established with an expedited procedure. In such cases all
the necessary documents are presented to the Commercial Register electronically and
authenticated with digital signatures. Even though the number of shareholders is unlimited by
law in both cases, the private limited company is suited for a more closed circle of contributors.

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Reference
1.Commercial Law Including Company Law And Industrial Law :Arun Kumar Sen , Jitendra
Kumar Mitra

2. Registrar of Joint Stock Companies and Firms [RJSC] :Certificate of Incorporation pdf. A
Study on Partnership Business

3. Registering a new company in Bnagladesh, DCCI Entreprenuership Innvation Expo.pdf 2014

4. Society Incorporation: Overview and Instructions Societies Act: Registry of Joint Stock
Companies Page 1 of 3.

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