ICAB PL Corporate Laws and Practices cheat sheet

Companies Act 1994 (Bangladesh) governs incorporation, management and winding up; the Bangladesh Securities and Exchange Commission Act 1993 and the Securities and Exchange Ordinance 1969 regulate listed companies and public issues.

Incorporation mechanics: promoter subscription, name clearance from the Registrar, memorandum and articles of association, Form I (declaration), Form VI (notice of registered office), Form IX (particulars of directors), then certificate of incorporation; the company becomes a body corporate on the certificate date.

Share capital types: authorised (maximum stated in the memorandum), issued (allotted to subscribers and others), paid-up (called and paid), and reserve capital; shares may be ordinary or preference, and no par-value concept applies under the Companies Act 1994.

Board governance: private companies need at least two directors and public companies at least three; directors hold office subject to rotational retirement for public companies; a director must obtain a director identification number and file consent (Form XII) with the Registrar.

Company meetings: statutory meeting within six months of commencement of business for public companies; annual general meeting within six months of the close of the financial year and not more than fifteen months after the previous AGM; first AGM within eighteen months of incorporation.

Dividend and accounts: audited financial statements laid before the AGM; dividend declared only out of profits or reserves, never out of capital; unpaid or unclaimed dividends are transferred to the Capital Market Stabilisation Fund after the statutory holding period.

Winding up routes: members' voluntary winding up (solvency declaration required), creditors' voluntary winding up, and compulsory winding up by the court on grounds such as inability to pay debts, default in filing statutory reports, or just and equitable grounds.

Capital market disclosure: listed companies must publish price-sensitive information promptly, comply with periodic reporting (annual, half-yearly, quarterly), and follow the BSEC corporate governance code on independent directors and audit committees.

Insider dealing prohibition: a person connected with a company who trades on unpublished price-sensitive information commits an offence under securities law; disclosure duties and blackout periods attach to directors and key officers.

Board meeting rule of thumb: notice to every director at the registered address, quorum as set in the articles (commonly one-third of directors or two, whichever is higher), and minutes entered in the minutes book within the statutory time and signed by the chair.

Resolution choice: ordinary resolution needs a simple majority of votes cast at a general meeting; special resolution needs at least three-fourths of votes cast and must be filed with the Registrar (typically within fifteen days) with the explanatory statement.

Related-party transactions: interested directors must disclose their interest, abstain from voting on the item, and the transaction must be on arm's-length terms; audit committee approval is a standard practice for listed entities.

Annual compliance calendar: AGM, filing of annual return, audited accounts and director reports, tax returns, and regulatory returns; missing a filing date triggers late fees and possible prosecution of the defaulting officer.

Director duties: act in good faith in the company's best interest, exercise care and independent judgement, avoid conflicts of interest, refrain from secret profits, and disclose shareholdings; breach exposes the director to personal liability.

Audit committee practice: at least three members, majority independent, chaired by an independent director, meeting at least quarterly; it reviews financial reporting, internal controls and auditor independence.

Share transfer mechanics: instrument of transfer with stamp duty, board approval and registration, entry in the register of members; refusal must be communicated with reasons within the statutory period.

Minute book and statutory registers: register of members, directors and secretaries, charges, and minutes of board and general meetings must be kept at the registered office or prescribed place and open to inspection on payment of the prescribed fee.

Dividend process: recommend by the board, declare by members, record date fixed, payment within the statutory period, tax deducted at source, and unpaid amounts transferred to the designated fund after the holding period.