Welcome to my Presentation

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Presentation on :Director's Duties and liabilities under
Bangladesh company law

Submitted by- Submitted to-

Sakhawat Hossain Ms. Farzana Akhter
Reg No: 21211020 (Lecturer)
Roll: 20 University Of Asia Pacific
Batch No: 33
Semester: 05
Law & Human Right

Date of submission:30th April,2024

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Director's Duties and liabilities under
Bangladesh company law

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 Introduction

Directors of a company have a significant role to play in

the smooth operation and growth of the company. They are
responsible for managing the affairs of the company and
taking decisions that benefit the company and its
stakeholders. In Bangladesh, directors are bound by various
legal obligations, and failure to comply with these
obligations may result in legal liabilities and risks.

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 What powers do directors have?

The directors are generally responsible for the management of

the company and may exercise all the powers of the company.
Articles might include restrictions on borrowings by the
company, matters relating to the issue of new shares and
transfers of existing shares. Generally, the directors must act
collectively as a board to bind the company.

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 Duties of director’s in Bangladesh
1. Duty to act in good faith and in the best interests of the
company: Directors have a fiduciary duty to act in good faith and
in the best interests of the company. They must always act
honestly, with due care and diligence, and in a way that promotes
the long-term success of the company.

2. Duty to exercise due care, skill, and diligence: Directors are

expected to exercise due care, skill, and diligence while performing
their duties.
3. Duty to avoid conflicts of interest: Directors must avoid
situations where their personal interests conflict with those of the
company. If such a conflict arises, they must disclose it to the board
and abstain from voting on the matter.
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4. Duty to maintain confidentiality: Directors must maintain the
confidentiality of the company's information, including trade
secrets, customer lists, and financial information.

5. Duty to comply with laws and regulations: Directors must ensure

that the company complies with all applicable laws and regulations.
They must stay up to date with the changing laws and regulations
and take necessary steps to ensure compliance.

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 Director’s liabilities
1. Civil liability: Directors can be held civilly liable for breaching their
legal responsibilities. This may result in the payment of damages to
the company or its stakeholders.
Example: A director of a company approves a project that causes
environmental damage. The company faces a lawsuit from the
affected parties, and the court orders the director to pay damages to
the plaintiffs.

2. Criminal liability: Directors may face criminal liability for

committing offenses such as fraud, embezzlement, or bribery. They
may face imprisonment, fines, or both for such offenses.

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 3. Disqualification as a director: Directors who breach their
legal responsibilities may be disqualified from serving as a
director in the future. The court or the regulatory authority may
disqualify a director for a specified period or permanently.

4. Reputation damage: Breaching legal responsibilities can

damage the reputation of a director. It may affect their ability to
secure future employment or business opportunities.

5. Personal financial loss: Directors may face personal financial

loss if they are held liable for breaching their legal
responsibilities. They may have to pay damages out of their
personal assets or face a loss of income if disqualified as a
director. 10
Al Amin Brothers vs. Commissioner of Taxes

In this case, the High Court Division of the Supreme Court

of Bangladesh held that directors could be held personally
liable for tax liabilities of the company if they were found
to have acted negligently or fraudulently in the
management of the company's affairs. This case
underscored the importance of directors' duties and
liabilities under Bangladeshi company law.

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 Recommendation
1.The Companies Act should provide specific age limit(both
minimum and maximum) for directors.

2.Like Uk,the Company law of Bangladesh should provide a

provision for removing the directors by ordinary resolusition.

3.The Company law of Bangladesh should provide a specific

provision on the directors right on termination.

4.The Company law of Bangladesh should provide a specific

provision regarding resignation of directors.
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 Conclusion
Directors of a company in Bangladesh have legal
responsibilities to fulfill, and failure to do so can result in
significant liabilities and risks. It is crucial for directors to act
in good faith, exercise due care and diligence, avoid conflicts
of interest, maintain confidentiality, and ensure compliance
with laws and regulations. It is essential for directors to
understand their legal obligations and take necessary steps to
fulfill them to avoid legal liabilities and risks.

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