Definition of Corporation:
The term Company is used to describe an association of a number of persons, formed for some common purpose and registered according to the law relating to companies.
Lord Justice Lindley defines: “By a company is meant associations of many persons who contribute money or money’s worth to a common stock and employ it for a common purpose. The common stock so contributed is denoted in money and is the capital of the company. The persons who contribute it or to whom it belongs are members.
The most important feature of a corporation is that it exists entirely separate and apart from its owners. Virtually all the legal and tax advantages associated with corporations flow from this essential element.
Corporations must have at least one owner, but there is no upper limit. The owners are called shareholders or stockholders. The ownership interests of the shareholders in a corporation are divided into units called stock, shares, or shares of stock. The rules governing corporations along with the advantages and disadvantages apply equally to corporations owned by one or more than one shareholder.
A corporation comes into existence when the prospective shareholders file a paper with the Illinois Secretary of State known as Articles of Incorporation. Among other things, the Articles of Incorporation require the prospective shareholders to determine the number of shares the corporation will be authorized to issue.
The total number of shares a corporation may issue is arbitrary, and there is no upper limit. However, the corporation must issue at least one share of stock for each shareholder. If the corporation will have more than one shareholder, the corporation should issue shares to each stockholder in proportion to their ownership interests. The proportion of the shareholders’ ownership interests may vary from a fraction of one percent to a fraction over ninety-nine percent, depending on the deal the shareholders make when they decide to go into business together.
How corporation conduct Business
A corporation conducts business through a chain of authorized representatives. The shareholders are at the top of the chain. The shareholders, however, do not directly manage the corporation’s daily affairs. Instead, the shareholders meet at least once each year to elect a Board of Directors.
Corporations must have at least one director, but there is no upper limit. The directors’ job is to make general business decisions for the corporation. Their decisions are then implemented by the corporation’s officers, who are appointed by the directors each year at a directors’ meeting.
The officers consist of at least the following: president, treasurer, and secretary. The president is responsible for managing the corporation’s daily operations. The treasurer manages the corporation’s money, while the secretary maintains the corporation’s nonfinancial books and records. Corporations may also have one or more vice presidents. A vice president’s duties may vary, depending on the corporation’s needs. For example, the corporation may have vice presidents for sales, marketing, operations, personnel, and so on.
The shareholders may elect themselves as the directors. In their capacity as directors, they may then appoint themselves as one or more of the officers. If you are a sole shareholder, you may elect yourself as the sole director and, as the sole director, you may appoint yourself as president, treasurer, and secretary. This arrangement is not considered a conflict of interest, and it is permitted by the BCA. Indeed, who else would you want to run your business?
Type of corporation exist
Corporations can be private, nonprofit, municipal, or quasi-public. Private corporations are in business to make money, whereas nonprofit corporations generally are designed to benefit the general public. Municipal corporations are typically cities and towns that help the state to function at the local level. Quasi-public corporations would be considered private, but their business serves the public’s needs, such as by offering utilities or telephone service.
There are two types of private corporations. One is the public corporation, which has a large number of investors, called shareholders. Corporations that trade their shares, or investment stakes, on securities exchanges or that regularly publish share prices are typical publicly held corporations.
The other type of Private Corporation is the closely held corporation. Closely held corporations have relatively few shareholders (usually 15 to 35 or fewer), often all in a single family; little or no outside market exists for sale of the shares; all or most of the shareholders help run the business; and the sale or transfer of shares is restricted. The vast majority of corporations are closely held.
Types of companies:
There are two types of companies-Public and Private.
a) Private Company:
A private company is one which, by its articles,
- restrict the right of the members to transfer their shares, if any ;
- limit the number of its members (not counting its employees) to 50 and
- Prohibits any invitation to the public to subscribe for any shares in, or debentures of, the Company.
Private companies may be limited by shares or limited by guarantee. There cannot be a private company with unlimited liability.
b) Public Company:
All companies other than private companies are called public companies .Public companies may be classified into three types:
- companies limited by shares,
- companies limited by guarantee, and
- Unlimited companies.
Statutory Public Company:
the Central Government may by license, permit the omission of the words Limited or Private Limited in the case of companies which are formed for promoting commerce, art, science, religion, or any other useful object, and which are non-profit and non dividend paying organizations (e.g., Chambers of Commerce). The license given may be withdrawn, if the company ceases to fulfill the conditions mentioned in Sec. 25.
Differences between a private & a public company:
Number of members; Restrictions on transfer of shares; Restriction on invitation to public; Restriction on name; Prospectus; Issue of rights shares; Commencement of business; Statutory meeting and statutory report; Managerial remuneration; Number of directors; Rules regarding directors; Company’s own shares; Procedure of meeting; Memo of contract:
Jurisdiction of court:
Suits relating to the constitution of a company and its winding up ‘are ordinarily dealt with in the High Court of the area in which the registered office of the company is situated. Suits of other types (e.g., money suits) by or against the company, where would try is determined by the rules regarding jurisdiction of courts as laid down in the Civil Procedure Code.
Each Corporation and their attributes
Public limited company
A public liability company is a limited liability company; that sell shares to the public in Bangladesh. It should be listed company on the stock exchanges. In the Bangladesh, a public limited company usually must include the words “public limited company’. 
A. Public Company limited by shares
A public company limited by shares is a locally incorporated company where the number of shareholders can be more than 50. The company may raise capital by offering shares and debentures to the public. A public company must register a prospectus with the Monetary Authority of Singapore before making any public offer of shares and debentures.
B. Public Company limited by guarantee
The liability of members is limited to such amount as they undertake to contribute to the assets on winding-up. That amount is specified in its memorandum of association, which forms part of a company’s constitution. If the company is wound-up, each person who is a member at that time or has been a member within one year of winding up may be required to contribute up to the amount of his guarantee towards payment of the debts incurred while he was a member. Past members are liable only if the present members default. Such companies are invariably non-profit-making concerns. They include professional bodies, trade societies, clubs etc.
When a new company incorporates in Bangladesh must be registered by the company act in Bangladesh. It also needs to notify in Bangladesh Bank. While it is not compulsory for a public limited company to offer its shares to the public.
Formation of a public limited company requires a minimum five – seven directors are required. In general terms anyone can be a company director, provided they are not disqualified on one of the following grounds:
- The person is an undercharged bankrupt, or disqualified by a Court from holding a directorship, unless given leave to act in respect of a particular company or companies.
- In Bangladesh Company act is followed from 1994 company constitution. 
The secretary of a public limited company must also be a person who appears to the directors to have the necessary knowledge and ability to fulfill the functions and who has the goodwill and renown in the entire market or in country.
The members must agree to take some, or all, of the shares when the company is registered. The memorandum of association must show the names of the people who have agreed to take shares and the number of shares each will take. These people are called the subscribers.
There is a minimum share capital for public limited companies: Before it can start business, it must have allotted shares. A company can increase its authorized share capital by passing an ordinary resolution (unless its articles of association require a special or extraordinary resolution).
A company can decrease its authorized share capital by passing an ordinary resolution to cancel shares which have not been taken or agreed to be taken by any person.
A company may have as many different types of shares as it wishes, all with different conditions attached to them. Generally share types are divided into the following categories:
- Primary Share: Primary share are the shares which are released in the first phase to the general public. Banks are liable to distribute the share to the general people.
- Secondary Share: When the primary share is sold to the second person from the market, that share is called secondary share.
- Ordinary – As the name suggests these are the ordinary shares of the company with no special rights or restrictions. They may be divided into classes of different value.
- Redeemable – These shares are issued with an agreement that the company will buy them back at the option of the company or the shareholder after a certain period, or on a fixed date. A company cannot have redeemable shares only.
Formation of company:
In Bangladesh Most of the companies are Formed based on:
v Memorandum of Association – this sets out the company name, the registered office address and the company objects. The object of a company may simply be to carry on business as a general commercial company. The company’s memorandum delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature. It is often referred to as the ‘charter of a company’ or ‘constitution of the company’. The signatories to the Memorandum of Association are deemed to be the first Directors of the company. The Memorandum defines the relation of members with the rest of the world.
- Articles of Association – this is the document which sets out the rules for the running of the company’s internal affairs. The company’s articles delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature. The Articles define the inter-management, inter-member and inter-employee relationship.
Every company must deliver an annual return to Bangladesh Bank at least once every twelve months. It has 28 days from the date to which the return is made up to do this.
To help companies meet this filing requirement, Stock Exchange send a pre-printed ‘shuttle’ form to their registered office a few weeks before the anniversary of incorporation.
All the company has to do is:
- check that the details are still correct,
- amend any that are not, and,
- Send the form back, signed and dated, within 28 days of the date of the return which is shown on the front of the form.
There is an annual document-processing which must be paid to the Bangladesh Bank.
Private limited company
An incorporated Private Limited Company the most popular form of company in Bangladesh. A type of company that offers limited liability to its shareholders but that places certain restrictions on its ownership. These restrictions are spelled out in the company’s articles of association or bylaws and are meant to prevent any hostile takeover attempt.??The major ownership restriction are:
A private limited company is a distinct legal form of business organization, the shares in the company are owned by its shareholders.
A company is a separate and distinct legal entity and, therefore, is separate and distinct from the individuals who own and operate that company
A limited company is owned by the shareholders who in the event of the business failing are protected by the limited liability bestowed upon them
Limited liability means that the shareholders potential exposure to the debts and liabilities of the company are limited to the amount that they have agreed to contribute to the company (the issued share capital)
If the company fails, the shareholders liability is limited to the amount of share capital contributed by them
Personal assets of directors and shareholders cannot be used to pay off the company debts
A limited company continues to trade irrespective of changes in directors, secretary, management and or ownership
A limited company is entitled to take legal actions in its own name, as opposed to the name of its owners.
- A legal entity separate and distinct from its shareholders and directors
- Partners have limited liability
- It can sue or be sued in its own name
- It can own property
- A minimum of 1 and a maximum of 50 shareholders
- A newly startup Private Limited Company is eligible for local tax exemptions and incentives
- Shareholders not personally liable for debts and losses of company
- Profits taxed at corporate tax rates
- Newly incorporated companies are entitled to tax incentives and exemptions
- The company, as a separate legal entity, does not cease to exist if one or more of its shareholders die
- A company’s life is usually perpetual
- Ownership of a company can be transferred and additional shareholders can be appointed
- It is governed by rules and regulations stipulated in the Bangladesh Private Ltd company Act.
- Annual returns filing and Directors’ Report are required; must have at least one director and one company secretary.
- Greater disclosure and administration requirements, and therefore operation costs are generally higher.
- Directors must disclose to the company information about their interests in the company’s shares, contracts and debentures.
Summary of Setup Requirements for Private limited company in Bangladesh
- Minimum 2 and Maximum 20 shareholder
- Maximum contributed capital is 3 crore, need a permission from Bangladesh Bank to contribute more than 3 crore.
The constitution of corporation
WHEN SHOULD YOU USE A CONSTITUTION?
A Constitution forms the basis of the internal governance rules of a corporation. A company’s internal governance rules operate as a contract between the company and each member, the company and each director and company secretary and between a member and each other member. This contract is created by statute and not the typical way by all parties who intend to be bound by the contract signing it. A company’s internal governance rules will generally deal with the following, among other things:
- appointment, removal and powers of the directors and company secretary;
- procedures for arranging and conducting directors’ meetings;
- special rights attaching to shares; and
- Rules relating to the transfer of shares and payment of dividends.
Instead of adopting a Constitution, a company’s internal governance rules may consist of the replaceable rules set out in the Corporations Act 1994. Also see
The Constitution should not be used and will require amendments if, by way of example:
- a rule which is to apply to how the company is governed is not included in this Constitution;
- the replaceable rules are to govern the Company’s internal operations instead of adopting a Constitution;
- There is a single director/shareholder. Special arrangements apply to the internal functioning of single director/shareholder companies;
- the company is a public company or a proprietary limited company that intends to list on the Australian stock exchange or a company limited by guarantee;
- the company has, or proposes to have, different classes of shares on issue;
- a shareholder is entitled to appoint a director;
- the chairman of the Board is not intended to have a casting vote;
- Pre-emptive rights are required so that existing shareholders have an option to buy the shares of other shareholders wishing to sell.
|In Bangladesh, normally businesses are run through proprietorship concerns, partnership concerns and public and private limited companies.
Private limited company is the commonly used form of the business where the operations are relatively higher and involves risk. A private limited company can be formed by a minimum of two persons and the maximum of 50 persons. Each member shall have the liability limited to their holding in the company. The profit in the form of dividend will be distributed commensurate with the capital invested in the form of equity.
Public limited company is formed when the operations are quite large and involve substantial risk. A public limited company can be formed with a minimum of 7 persons. The maximum number in this case is unlimited. Here again each member will have the liability limited to the extent of their holding in the company. The profit is also shared in the form of dividend in accordance with the investment made in the equity of the company.
Corporate law (also “company” or “corporations” law) is the law of the most dominant kind of business enterprise in the modern world. Corporate law is the study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community and the environment interact with one another under the internal rules of the firm.
Corporate law is a part of a broader company’s law (or law of business associations). Other types of business associations can include partnerships or trusts companies limited by. Corporate law is about big business, which has separate legal personality, with limited liability or unlimited liability for its members or shareholders, who buy and sell their stocks depending on the performance of the board of directors. It deals with the firms that are incorporated or registered under the corporate or company law of a sovereign state or their sub national states. The four defining characteristics of the modern corporation are:
101. Incorporators; how corporation formed; purposes
102. Contents of certificate of incorporation.
103. Execution, acknowledgment, filing, recording and effective date of original certificate of incorporation and other instruments; exceptions
Commencement of corporate existence
107. Powers of incorporators.
108. Organization meeting of incorporators or directors named in certificate of incorporation
110. Emergency bylaws and other powers in emergency.
111. Jurisdiction to interpret, applies, enforce or determine the validity of corporate instruments and provisions of this title
112. Access to proxy solicitation materials.
113. Proxy expense reimbursement.
114. Application of chapter to nonstick corporations.
Content of The Companies (Bangladesh) Act, 1994 
(Linked are given directly from the website)
Implementation of Corporate Law
In Bangladesh all the company law has been followed. Mainly public and private limited company need to enroll themselves to government. After completing of all the procedure they get their license.
Advantage and disadvantage of corporation
What Are the Advantages of Corporations?
It may recall that the essential element of corporations is their existence entirely separate and apart from the shareholders. This feature gives rise to the principal advantage of corporations–limited liability protection.
Because a corporation exists apart from the shareholders, the corporation alone is liable for its debts. Even though they own and manage the corporation, the shareholders are not personally liable for its debts.
In addition to limited liability protection, corporations offer two tax advantages. First, under the present tax code, a corporation may claim a one hundred percent deduction for health insurance the corporation purchases for the shareholders’ benefit. Second, a corporation may deduct the cost of life insurance, up to a $50,000 policy, the corporation purchases for the shareholders.
What Are the Disadvantages of Corporations?
Doing business through a corporation carries several tax disadvantages. Because a corporation has its own existence, it pays taxes on its own income. However, if a corporation has losses, only the corporation, and not the shareholders, can claim those losses as a tax deduction.
Most businesses lose money at some time or other. This often occurs during their start-up phase, when cash is tightest. If you are conducting your business through a corporation, you will be unable to deduct business losses until the corporation makes a profit, even if you have personal income from other sources. This delay can be particularly painful for new business owners with limited resources.
For country the corporation is very important to form for the economical advantage. The economical backbone of any country is the corporation. Two types of corporation are the most popular. One is Public Limited Corporation and another is Private Limited Corporation. The formation of this corporation is different and their operation is also different. This entire corporation in Bangladesh is following the company act 1994. They also follow the company law in their business. So both public and Private Corporation is the center of the economical activity in any country includes Bangladesh.
v Samuel Martin; “Corporate and its Advantage disadvantage”
v 2 Collected from the RSS Corporation in BD, consultation Firm and the consultant of TATELY tea.
v 3. Company and its Regulation by JC Mittra.
v 4 Application of Bangladesh constitution Act by Khaled Mahmud in Daily Jugantor on 12th Nov 2010
v Company & Regulation by Yelling yermun
 Company and its Regulation by JC Mittra.
 Corporations – Types Of Corporations – Private, Public, Held, Business – Richard Miller
 Formation of company by Anup Dutta from Ananda printers Calcutta.
 Application of Bangladesh constitution Act by Khaled Mahmud in Daily Jugantor on 12th Nov 2010
 Company & Regulation by Yelling yermun
 Bangladesh Corporate act 1994
 Bangladesh Corporate act 1994
 Bangladesh Corporate act 1994
Bangladesh Corporate act