THE COMPANIES ACT ( BANGLADESH ), 1994, ( PART 4 )

PART IV

MANAGEMENT AND ADMINISTRATION

Office and Name

1. Registered office of company – (1) A company shall as from the  day  on which it begins to carry on business  or  as  from the twenty-eight day after the date of its incorporation, whichever is earlier, have a registered office to which all communications and notices may be

• Notice of the situation of the registered office and of any change therein shall be given within twenty-eight days after the date of the incorporation of the company or of the change, as the case may be, to the Registrar who shall record the
• The inclusion in the annual return of a company of the statement as to the address of its registered office shall not be taken to satisfy the obligation imposed by this
• If a company carries on business without complying with the requirements of this section, it shall be liable to a fine not exceeding two hundred taka for every day during which it so carries on

2. Publication of name by a limited company – Every limited company-

• Shall paint or affix, and keep painted or affixed, in letters easily legible and in Bengali or English characters, its name in a conspicuous position on the frontside of every office or place in which its business is carried on:
• shall have its name engrave in legible characters on its seal;
• shall have its name mentioned in legible Bangali or English characters in all bill-heads, letter papers and in notices, advertisements and other official publications of the company, and in all bills of exchange, hundis, promissory notes, endorsements, cheques and orders for money or goods purporting to be singed by or on behalf of the company, and in all bills of parcels; invoices, receipts and letters credit of the

3. Penalties for non-publication of name – (1) If a limited company maines default in complying with the provisions of section 78 (a), it shall be liable to a fine not exceeding five hundred taka for everyday during which the default continues and every officer of the company, who knowingly and willfully authorises or permits the default, shall be liable to a like penalty.

• If any officer of a limited company, or any person on its behalf–
  • uses or authorises the use of any seal purporting to be a seal of the company whereon its name is not engraven as required by section 78 (b); or
  • issues or authorises the issue or any bill-head, letter paper, notice, advertisement or other official publication of the company, or signs or authorises on be signed on behalf of the company any bill of exchange hundi, promissory note, endorsement, cheque or order for money or goods, or issues or authorises to be issued any bill of parcels, invoice, receipt or letter of credit of the company, wherein its name is not mentioned as required by section 78 (b);

he shall be liable to a fine not exceeding one thousand taka, and shall further be personally liable to the holder of any such bill, hundi, promissory note, cheque or order for the amount thereof, unless the same is duly paid by the company.

4. Publication of authorised as well as  subscribed  and  paid-up  capital—(1)  Where  any  notice,  advertisement  or  other official publication of a company contains a statement of the amount of the authorised capital of the company, such notice, advertisement or other official publication shall also contain a statement in an equally prominent position and in equally conspicuous characters of the amount of the capital which has been subscribed and the amount paid-up.

(2) Any company which makes default in complying with the requirements of this section and every officer of the company who is knowingly a party to the default shall liable to a fine not exceeding five thousand taka.

Meeting and Proceeding

5. Annual general meeting–(1) Every company shall in each year of the Grogorian calendar hold in addition to any other meetings a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next:

Provided that a company may hold its first annual general meeting within a period of not more than eighteen months from  the date of its incorporation; and if such general meeting is held within that period, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation or in the following year;

Provided further that the Registrar may, on an application made by a company within thirty days from the date of expiry of the period specified for holding the annual general meeting as aforesaid, extend the time within which any annual general meeting, not being the first annual general meeting shall be held, by a period not exceeding ninety days or not exceeding the 31st December of the calendar year in relation to which the annual general meeting is required to be held, whichever is earlier.

(2) If a company defaults in complying with the provisions of sub-section (1), the Court may, on the application of any member of the company, call or direct the calling of a general meeting of the company and give such ancillary or consequential direction as the Court thinks expedient in relation to the calling holding and conducting of the meeting.

6. Penalty for default in complying with section 81–If default is made in holding a meeting  of  the  company  in  accordance with sub- section (1) of section 81,  or in complying with any directions of the Court under sub-section (2)  thereof, the company and every officer of the company who is in default, shall be punishable with fine which may extend to ten thousand taka and in case of a continuing default, with a further fine which may extend to two hundred fifty taka for  every day after the first day during which such default
7. Statutory meeting and statutory report of company–(1) Every company limited  by  shares  and  every  company  limited by guarantee and having a share capital shall, within a period of not less than one month and not more than six months from the date at which the company is entitled to commence business, hold a general meeting of the members of the company; in this Act such meeting is referred to as “the statuary meeting”.

• The Board of Directors shall, in accordance with the other provision of this Act, prepare a report, in this Act referred to as ‘statutory report” and shall at least 21 days before the day on which the statutory meeting is not be held, forward the report to very member of the company:

Provided that if the report is forwarded later than the time as is required above, it  shall  notwithstanding that  fact, be deemed to have been duly forwarded if any member entitled to attend and vote at the meeting does not object to such forwarding.

• The statutory reports shall set out the following namely–
  • the total number of shares allotted, distinguishing the shares allotted as fully or partly paid-up, otherwise than in cash, and stating in the case of shares partly paid-up, the extent to which they are so paid up, and in either case, the consideration for which they have been allotted;
  • the total amount of cash received by the company in respect of all the shares allotted, distinguished as aforesaid;
  • showing under separate proper headings–
    • an abstract of receipts of the company and of the payments made thereout up to a date within seven days prior to the date of the report;
    • the receipts of the company from the shares and debentures and other sources, the payments made thereout and particulars of the concerning balance remaining in hand;
    • any commission or discount paid or to be paid on the issue or sale of shares or debentures; and
    • an account or estimate of the preliminary expenses of the company;
  • the names, addresses and occupations of the directors of the company and of its auditors; and also, if there be any, of its managing agent, manager and secretary. and the change, if any which have occurred in such names addresses in and occupations since the date of the incorporation of the company;
  • the particulars of any contract which, or the modification or the proposed modification of which is to be submitted to the meeting for its approval, together with the particulars of the modification or proposed modification of such contract;
  • the extent, if any, due on calls from every director, from managing agent, every partner of the managing agent, every firm in which the managing agent is a partner, and where the managing agent is a private company, every director thereof;

(h) the particulars of any commission or brokerage paid or to be paid in connection with the issue or sale of shares or sale of shares or debentures to any director, or to the managing agent, any partner of the managing agent, any firm in which the managing agent is a partner and, where the managing agent is a private company, to any director thereof.

• The statutory report shall be certified as correct by not less than two directors of the company, one of whom shall be the managing director where there is
• After the statutory report has been certified as required by sub-section (4), the Board of Directors the company shall, in so far as the report relates to the shares allotted by the company, the cash received in respect of such shares  and the receipts and payments of the company, get it certified as correct by the auditors of the
• The Board of Director shall cause a copy of the statutory report certified as if required by this section to be delivered to the Registrar for registration forthwith, after copies thereof have been sent to the members of the
• The Board of Directors shall prepare a list showing the names, addresses and occupation of the members of the company, and the number of shares held by them respectively, to be produced at the commencement of the statutory meeting and to remain open and accessible to any member of the company during the continuance of the
• The members of the company present at the meeting shall be at liberty to discuss any matter relating to the formation of the company or arising out of the statutory report, whether previous notice has been given or not; but no resolution may be passed of which notice has not been given in accordance with the provisions of this
• The meeting may adjourn from time to time and at any adjourned meeting, any resolution of which notice has been given in accordance with the provisions of this Act, Whether before or after the former meeting, may be passed; and the adjourned meeting shall have the same powers as an original
• If a petition is presented to the Court in the manner provided by Part V for winding up of the company on the ground of default in filing the statutory report or in holding the statutory meeting the court may, instead of directing that the company be wound up, give directions for the presentation of the report or for holding the meeting or make such other order as may be just.
• If default is made in complying with the provisions of this section, every director or other officer of the company who is in default shall be punishable with fine which may extend to five thousand taka.
• Nothing in this section shall apply to a private company.

8. Calling of extraordinary general meeting  on  requisitions–(1)  Notwithstanding  anything  contained  in  the  articles,  the directors of a company which has a share capital, shall on the requisition of the holders of not less than one tenth on the issued share capital of the company upon which all calls or other sums then due have been paid, forthwith proceed to call an extraordinary general meeting of the company, and in the case of a company not having a share capital the directors  thereof shall call such meeting on the requisition of such members as have, on the date of submitting the requisition, not less than one tenth of the total voting power in relation to the issues on which the meeting is called.

• The requisition must state the objects of the meeting and must be signed by the requisitioned and deposited at the registered office of the company, and may consist of several documents in like form, each signed by one or more requisitioned.
• If the directors do not, within twenty one days from the date of deposit of the requisition, proceed duly to call a meeting on a day not later than forty-five days from the date of the deposit of the requisition, then the requisitioned, or a majority of them in value, may themselves call the meeting, but any meeting so called shall be held before the expiration of three months from the date of the deposit of the
• Any meeting called under this section by the requisitionnists shall be called in the same manner, as nearly as possible, as that in which meetings are to be called by directors.
• Any reasonable expenses incurred by the requisitioned by reason of the failure of the directors duly to call a meeting shall be repaid to the requisitionists by the company, and any sum so repaid shall be retained by the company, out of any sums due or to become due from the company by way of fees or other remuneration for their services to such of the directors as were in

9. Provision as to meeting and votes—(1) The following provisions shall have effect with respect to  meeting  of  a company notwithstanding any provisions made in the articles of association of the company in this behalf:

• an annual general meeting may be called by fourteen days notice in writing, and a meeting other than an annual general meeting or a meeting for the passing of a special resolution may be called by twenty one day’s notice in writing: Provided that a meeting may be called by shorter notice than aforesaid, if it is so agreed in writing–
  • in the case of an annual general meeting, by all the members entitled to attend and vote thereat; and
  • in the case of any other meeting by the members of the company holding, if the company has a share capital not less than 95 percent of such part of the paid-up share capital of the company as gives a right to vote at the meeting, or having if the company has no share capital, not less than 95 percent of the total voting power exerciseable at the meeting;
• notice of the meeting of a company with the statement of the business to be transacted at the meeting shall be served on every member in the manner in which notices are required to be served by Schedule 1; but accidental omission to give notice to, or the non-receipt of notice by, any members shall not invalidate the proceedings at any meeting;
• five members present in person or by proxy, or the chairman of the meeting, or any member or members holding not less than one-tenth of the issued capital which carries voting rights shall be entitled to demand a poll: Provided that in the case of a private company, if not more than seven members are personally present, one member, and if more than seven members are personally present, two members, shall be entitled to demand a poll:
• an instrument appointing a proxy, if * the form set out i regulation 68 of Schedule I, shall not be questioned on the ground that if fails to comply with any special requirements specified for such instruments by the articles; and
• any shareholder whose name is entered in the register of shareholders of the company shall enjoy the same rights and be subject to the same liabilities as all other shareholders of the same
• The following provisions shall have effect if so far as the articles of the company do not make other provision in this behalf:–
  • two or more members holding not less than one-tenth or the total share capital paid-up or, if the company has not a share, capital, not less than five percent in number of the members of the company may call a
  • in the case of a private company whose number of members does not exceed six, two members and if such number exceeds six, three members, and in the case of any other company, five members personally present shall be a quorum;
  • any member elected by the members present at a meeting may be chairman
  • in the case of company originally having a share, capital, every member shall have one vote in respect of each, share or each hundred taka of stock held by him, and in any other cases very member shall have one vote;
  • on a poll, votes may be given either personally or by proxy;
  • the instrument appointing a proxy shall be in writing under the hand or the appoint or of his attorney duly authorised in writing or if the appointer is a corporation or a company, either under seal or under the hands of an officer or an attorney duly authorised: Provided that the appointment of proxy shall not be allowed in case of companies formed under section 28 and a proxy may or may not be a member of the company.
• If for any reason it is impracticable to call a meeting of a company in any manner in which meeting of that company may be called or to conduct the meeting of the company in manner prescribed by the articles or this Act the Court may either of its own motio or on the application of any director of the company or of any member of the company who would be entitled  to vote at the meeting, order a meeting of the company to be called, held and conducted in such manner as the Court thinks fit, and where any such order shall for all purposes be deemed to be a meeting of the company duly called, held and conducted.

10. Representation of  companies  at  meetings  of  other  companies  of  which they  are  members–  A company which is   a member of another company may, by resolution of the directors, authorise any of its official or any other person to act as  its representative at any meeting of that other company, and the person so authorised shall be entitled to exercise the same powers on behalf of the company which he represents as if he were an individual shareholder of that other
11. Extraordinary and  special  resolution–(1) A resolution shall be a extraordinary resolution when it has been passed by    a majority of not less than three fourths of such members entitled to vote as are present in person or by proxy, where  proxies are allowed, at a general meeting of which notice specifying the intention to propose the resolution as an extraordinary resolution has been duly

• A resolution shall be a special resolution when it has been passed by such a majority as is required for the passing of an extraordinary resolution and at a general meeting of which not less than twenty-one day’s notice specifying the intention to propose the resolution as a special resolution has been duly given;

Provided that, if all the members entitled to attend and vote at any such meeting so agree, a resolution may be proposed and passed as a special resolution at a meeting of which less than twenty-one day’s notice has been given.

• At any meeting at which an extraordinary resolution or a special resolution is submitted to be passed a declaration of the chairman on a show of hands that the resolution is carried shall, unless a poll is demanded, be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the
• At any meeting at which an extraordinary resolution or a special resolution is submitted to be passed a poll may be demanded.
• Where a poll is demanded, the poll may in accordance with the articles, be taken in such manner as the chairman may direct; and if the chairman so directs it be taken at the meeting at which it is
• Where a poll is demanded in accordance with this section, in computing the majority on the poll, reference shall be had to the number of votes top which each member is entitled by the articles of the company or under this
• For the purposes of this section, notice of a meeting shall be deemed to be duly given and the meeting to be duly held when the notice is given and the meeting held in manner prescribed by the articles or under this

12. Registration and copies of special and extraordinary resolution:–(1) A copy of every special and extraordinary resolution shall, within fifteen days from the passing thereof, be printed or typewritten and duly certified under the signature of an officer of the company and filed with the Registrar who shall record the

• Where articles have been registered, a copy of every special resolution for the time being in force shall be embodied in or annexed to every copy of the articles issued after the date of the
• Where articles have not been registered, a copy of every special resolution shall be forwarded in print to any member at his requiest on payment of fifty taka or such less sum as the company may
• If a company makes defalt in so filing with the registar copy of a special or extraordinary resolution it shall be liable to a fine not exceeding one hundred taka for every day during which the default
• If a company makes default in embodying in complying with the provisions of sub-section (2) or (3) it shall be liable to a fine not exceeding fifty taka for each copy in respect of which default is
• Every officer of a company, who knowingly and wilfully authorise or permits any default by the company in complying with the requirement its of this section, shall be liable to the like penalty as is imposed by this section on the company for  that

13. Minutes of proceedings of general meeting and of its directors–(1) Every company shall cause minutes of all proceedings of general meeting and meetings of its directors to be entered in books kept for that

• Any such minute, if purporting to be signed by the chairman of the meeting at which the proceedings were had. or by the chairman of the next succeeding meeting shall be evidence of the
• Until the contrary is proved–
  • A general meeting of the company or a meeting of its directors, in respect of the proceedings of which minutes have been made, shall be deemed to have been duly called and held: and
  • the proceedings of such meeting shall be deemed to have been held as described in the minutes and the appointments of directors or liquidators at such meeting shall be deemed to be valid:
• The books containing the minutes of proceedings of any general meeting of a company shall be kept at the registered office of the company and shall during business hours a subject to such reasonable restrictions as the company may by its article or in general meeting impose so that no less than two hours in each day be allowed for inspection be open to the inspection of any member without
• Any member shall at any time after fourteen days from the meeting, be entitled to be furnished within seven days after he has made a request in that behalf to the company with a copy of any minutes referred to in subsection (4) at a change   not exceeding ten taka for every hundred
• If any inspection required under sub-section (4) is refused, on if any copy required under sub-section (5), is not furnished within the time specified in sub-section (5), the company and every officer of the company who is knowingly and wilfully in default or who authorises or permits default shall be liable in respect of each offence to a fine not exceeding taka one  hundred and to a further fine not exceeding one hundred taka for every day during which the default
• In the case of any such refusal or default the Registrar may by order compel an immediate inspection of the books in respect of all proceedings of general meeting or direct that the copies required shall be sent to the person requiring Directors

14. Directors obligatory – (1) Every public company and a private company which is a subsidiary of a public company shall have at least three

• Every private company other than a private company mentioned in sub-section (1) shall have at least two directors;
• Only a natural person may be appointed a

15. Appointment of directors: – (1) Notwithstanding anything contained in the articles of a company–
    • the subscribers of the memorandum shall be deemed to be the directors of the company until the first director are
    • the directors of the company shall be elected by the members from among their number in general meeting; and
    • any casual vacancy occurring among the directors may be filled in by the other directors but the person the appointed shall be a person qualified to be elected a director under clause (b) and shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose place he is appointed was last appointed a director.

(2) Notwithstanding anything contained in the articles of a company other than a private company not less than one third of the whole number of directors shall be persons whose period of office is liable to determination at any time by retirement of directors rotation.

16. Restrictions on appointment or advertisement of director – (1) A person shall  not be capable  of  being appointed  director of a company by the articles and shall not be named as a director or proposed director of a company in any prospectus issued by or on behalf of the company or in relation to any intended company or in any statement in lieu of prospectus filed by or on behalf of a company unless before the registration of the articles or the publication of the  prospectus, or the filing of he statement in lieu of prospectus, as the case may be, he has by himself or by his agent authorised in writing –

• signed and filed with the Registrar a consent in writing to act as such director; and
• in the case of companies having a share capital –
  • signed the memorandum for a number of shares not less than his qualification shares; or
  • taken from the company and paid or agreed to pay for his qualification shares; or
  • signed and filed with the registrar a contract in writing to take form the company and pay for his qualification shares; or
  • made and filed with the Registrar any affidavit to the effect that a numbert of shares not less than his qualifications share are registered in his

(2) On the application for registration of the memorandum and article, if any, of a company, the applicant shall file with the Registrar a list of the persons who have consented to be directors of the company, and, if this list contains the name of any person who has not so consented, the applicant shall be liable to fine not exceeding two thousand taka:

Provided that nothing in this section shall apply to the appointment of the chief executive, by whatever name called, of any insurance company or a banking company as a director of that company if the article; thereof provides for such appointment.

17. Consent of candidate for directorship – (1) Every person, proposed as a candidate for the office of a director shall sign, and file with the company, his consent in writing to act as a director, if

(2) A person shall not act as a director of the company unless he has, within thirty days of his appointment, signed and field with the Registrar his consent in writing to act as such director.

18. Disqualifications of directors – (1) A person shall not be capable of being appointed director of a company, if –
    • he has been found to be of unsound mind by a competent court and the finding is in force; or
    • he is an undischarged insolvent; or
    • he has applied to be adjudicated as an insolvent and his application is pending; or
    • he has not paid any call in repect of shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call; or
    • he is a

(2) A company may in its articles provide additional grounds for disqualification of a director.

19. Notice of meetings:–Notice of every meeting of the Board of Directors of a company shall be given in writing to every director for the time being in Bangladesh and at his address in
20. Meeting of  Board:–In the case of every company a meeting of its Board of Directors shall be held at least once in   every three and at least four such meetings shall be held in every
21. Qualification of  Director:–(1)   Without prejudice tot he restrictions imposed by section 92, it shall be the duty of   every director to hold qualification share to be specified in the articles and, if he is not already qualified, he shall obtain his qualification within sixty days after his appointment, or such shorter time as may be fixed by the

(2) If, after the expiration of the period mentioned in sub-section (1) any unqualified person acts as a director of the company, he shall be liable to a fine not exceeding two hundred taka for every day between the expiration of the said period and the last day on which it is proved that he acted as a director (both days inclusive).

22. Validity of act of director:–The acts of a director shall be valid notwithstanding any defect that may afterwards be discovered in his appointment of qualification:

Provided that nothing in this section shall be deemed to give validity to act done by a director after the appointments of such director has been shown to be invalid.

23. Ineligibility of brankrupt to act as director:–(1) If any person being an undischarged insolvent acts as director or managing agent or manager of any company, he shall be liable to imprisonment for a term not exceeding two years or to a fine not exceeding five thousand taka or to

(2) In this section the expression “company” includes a company incorportated outside Bangladesh which has an established place of business within Bangladesh.

24. Probitition on assignment of office by director:– Any assignment of his office made after the commencement of this Act by any director shall void and shall be of no
25. Appointment and terms and office of alternate directors– (1) The Board of Directors of a company may, if so  authorised by its articles or by a resolution passed by the company in general meeting, appoint an alternate director, to act  for a director hereinafter in this section called the original director during his absence for a continuous period of not less than three months from

• An alternate director appointed under sub-section (1) shall not hold office as such for a period longer than that permissible to the original director in whose place he has been appointed and shall vacate the office, immediately after he receives information that the original director has returned to
• If the term of office of the original director is determined before he so returns to Bangladesh any provision for automatic reappointment of retiring directors in default of another appointment shall apply to the original and not to the alternate director.

26. Avoidance of provisions relieving liability of directors:–Save as provided in this section, any provision, whether contained in the articles of a company or in any contract with a company or otherwise, hereafter in this section referred to as the said provision, for exempting any director, manager or officer of the company or any person, whether an officer of the company or not, employed by the company as auditor from, or for indemnifying him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the company shall be void;

Provided that–

• nothing in this section shall operate to deprive any person of any exemption or right to be indemnified in respect of anything done or omitted to be done by him while the said provision was in force before the commencement of this Act; and
• a company may, in pursuance of the said provision indemnify any such director, manager, officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgement is given in his favour or in which he is acquitted or in connection with any application under section 3 of this Act in which relief is granted to him by  the

27. Loan of  Director–(1) No company, hereinafter in this section referred top as the lending company, shall make any   loan or give any guarantee or provide any security in connection with a loan made by a third party to–
    • any director of the lending company
    • any firm in which any director of the lending company is a partner;
    • any private company of which any director of the lending company is a director or member; or
    • any public company, the managing agent manager or director where of is accustomed to act in accordance with the directions or instruction of any director of the lending company:

Provided that nothing in this section shall apply to the making of a loan or giving of any guarantee or providing any security by a lending company. if–

• such company is a banking company or a private company not being a subsidiary of a public company, or if such company as a holding company makes the loan or gives the guarantee or provide the security to its subsidiary; and
• the loan is sanctioned by the Board of Directors of any company and approved by the general meeting and, in the balance sheet, there is a specific mention of the loan, guarantee or security, as the case may be:

Provided further that, in no case the total amount of the loan shall exceed 50% of the paid up value of the shares held by  such director in his own name

• In the event of any contravention of sub-section (1) every person who is a party to such contravention including in particular any person to whom a loan is made or on whose behalf a guarantee is given to or security provided shall be punishable with the fine which extend to five thousand taka or simple imprisonment for six months in lieu of fine and shall be liable jointly and severally to the lending company for the repayment of such loan or for making good any sum which the lending company may be called up to pay under the guarantee given or security provided by the lending
• this section shall apply to any transaction represented by a book debt which was from its inception in the nature of a loan or an

28. Director not to hold office of profit–No director or firm of  which such  director is a partner of  private company  of which such director is a Director shall, without the consent of the company in general meeting, hold any office of profit under the company except that of a managing director or manager or a legal or technical adviser or a banker.

Explanation:–For the purpose of this section, the office of managing agent shall not be deemed to be an  office of profit  under the company.

29. Sanction of Directors necessary for certain contracts–Except with the consent of the directors, a director of the company, or the firm of which he is a partner or any partner of such firm or the private company of which he is a member or director, shall not erter into any contract for the sale, purchase or supply of goods and materials with the
30. Removal of directors–(1) The company may be extraordinary resolution remove any share-holder director before the expiration of his period of office and may by ordinary resolution appoint another person in his stead and the person so appointed shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose place he is appointed was last elected

(2) A director so removed shall not be re-appointed a director by the Board of Directors.

31. Restrictions on power of directors–The directors of a company or of a subsidiary company of a public company shall not, except with the consent of the company concerned in general meeting–

• sell or dispose of the undertaking of the company; and
• remit any debt due by a

32. Vacation of office of director–(1) The office of a director shall be vacant, if–
    • he fails to obtain within the time specified in section 97 (1) or at any time thereafter ceases to hold, the qualifications–hares, if any, necessary for his appointment; or
    • he is found to be of unsound mind by a competent court; or
    • he is adjudged an insolvent; or
    • he fails to pay calls made on him in respect of shares held by him within six months from the date of such calls being made; or

(e)he or any firm of which he is a partner or any private company of which he is a director, without the sanction of the company in general meeting accepts or holds any office of profit under the company other than that of a managing director or manager or a legal or technical adviser or a banker; or

• he absents himself from three consecutive meeting of the directors or from all meetings of the directors for a continuous period of three months, whichever is the longer, without leave of absent from the Board of Directors; or
• he or any firm of which he is a partner or any private company of which he is a director accepts a loan or guarantee from the company in contravention of section 103; or
• he acts in contravention of section

(2) A company may provide by its articles that the office of director shall be vacated on grounds additional to those specified in sub-section (1).

33. Restriction on Managing Director—(1) No public company and no private company which is a subsidiary of public company shall, after the commencement of this Act, appoint any person as managing director, if he is a managing director or manager of an other

Provided the no appointment under this section shall be made without the consent of the company in a general meeting.

(2) Notwithstanding anything contained in sub-section (1) the government may, by order, permit any  person to be  appointed as a managing director of more than two companies if the government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common managing director.

34. Managing director not to be appointed for more than five years at a time.–(1) No company shall, after the commencement of this Act, appoint or employ any individual as its managing director for a term exceeding five years at a time.

• Any individual holding, at the commencement of this Act, the office of the managing director in a company shall, unless his term expires earlier, be deemed to have vacated his office immediately on the expiry of five years from the commencement of this
• Nothing contained in sub-section (1) shall be deemed to prohibit the re-employment or the extension of the term of office of any person as managing director for a further period not exceeding five years on each

Provided that no such re-appointment, re-employment or extension of term of office shall be made without the consent of the company in general meeting.

Compensation for Loss of Office

35. Compensation for loss of office not permissible to managing or whole time directors or directors who are –(1) Payment may be made by a company, except in the cases specified in sub-section (3) and subject to the   limit specified in sub-section (4), to a managing director, or a director holding the office of manager or in the whole time employment of the company, by way of compensation for loss of office or as consideration for retirement from office, or in connection with such loss or retirement.

• No payment mentioned in sub-section (1) shall be made by the company to any other
• No payment shall be made to a managing or other director in pursuance of sub-section (1) in the following cases namely:–
  • where the director resigns his office in view of the reconstruction of the company, or of its amalgamation with any other body corporate or bodies corporate, and is appointed as the managing director, managing  agent,  manager or other officer of the reconstructed company or of the body corporate resulting from the amalgamation;
  • where the director regigns his office otherwise than on the reconstruction of the company or its amalgamation as aforesaid.
  • where the office of the director is vacated by virtue of any provision of this;

• where the company is being wound up, whether by or subject to the supervision of the Court or voluntarily., Provided the winding up was due to the negligence or default of the director;
• where the director has been guilty of fraud or breach of trust in relation to, or of gross negligence in, or gross mismanagement of, the conduct of the affairs of the company or any subsidiary or holding company thereof;
• where the director has instigated, or has taken part directly or indirectly in bringing about, the termination of his office.

• Any payment made to a managing or other director in pursuance of sub-section (1) shall not exceed the remuneration which he would have earned if he had been in office for the unexpired residue of his term or for three years, whichever is shorter, and such remuneration shall be calculate on the basis of–
  • the average remuneration received by him during the period of three years immediately preceding the date on which he acased to holdthat office; and
  • where he held that office for a period of less than three years, the overage remuneration received by him during the period for which he held the office:

Provided that no such payment shall be made to the director in the event of the commencement of the winding up of the company, whether before, or at any time within twelve months after, the date on which he ceused to hold office, if the assets of the company on the winding up after deducting the expenses thereof, are not sufficient to repay to the share holders the share capital including the premiums, if any, contributed by them.

• Nothing in this section shall be deemed to prohibit the payment to a managing director, or a director holding the office of manager, of any remuneration for service rendered by him to the company in any other

36. Payment to  director,    for  loss  of  office,  etc.  in  connection  with  transfer  of  undertaking  or  property.–(1)  No Director of a company shall, in connection with the transfer of the whole or any part of any undertaking or property of the company, receive any payment, by way of  compensation for  loss of office, or as consideration for retirement from office, or in connection with such loss or retirement from the transferee of such undertaking or property or from any other person, unless particulars with respect to the payment proposed to be made by such transferee or person, including the amount thereof, have been disclosed to the members of the company and the proposal has been approve by the company in general meeting.

• Where a director of a company receives payment of any amount in contravention of sub-section (1), the amount shall be deemed to have been received by him in trust for the
• Sub-sections (1) and (2) shall not affect in any manner the operation of section

37. Payment to director for loss of office etc. in connection with transfer of –(1) Where in connection with   the transfer to any persons of all or any of the shares in a company, being a transfer resulting from–

• an offer made to the general body of shareholders:
• an offer by or on behalf of some other body corporate with a view to the company becoming a subsidiary of such body corporate or a subsidiary of its holding company;
• an offer made by or on behalf of an individual with a view to his obtaining the right to exercise, or control the exercise, of not less than one-third of the total voting power at any general meeting of the company; or
• any other offer which is conditional on acceptance to a given extent; and as a result of such transfer a director of the company losses his office or retires therefrom he shall not receive any payment by way of compensation for loss of office, or as consideration for retirement from office or in connection with such loss of retirement from the company of the transferee or from any other

Provided that on fulfilment of the requirements of the other provisions of this section, such director may receive such  payment from the said transferee or other person.

• In the case referred to the proviso to sub-section (1) it shall be the duty of the director concerned to take all reasonable steps to secure that particulars with respect tot he payment proposed to be made by the transferee or other person including the amount thereof are included in or sent with the notice required to sent under section 112(2) to
• If –
  • any such director fails to take reasonable step in pursuance of sub section (2); or
  • any person who has been properly required by any such director to include the particulars referred to in sub- section (2), in such notice or to send them with such

he shall be punishable with fine which may extend to five hundred taka.

• For the purpose of approving any payment referred to in the proviso to sub-section (1), the company shall call a meeting of the shareholders who were such holders on the date of the offer referred to that sub-section and also of the holders of the shares of the same class, in this meeting the person making the said offer or his nominee, and if the offerer is a company the nominee of such company or of any of its subsidiary shall not be called; and if the payment is approved in the meeting the director shall be entitled to receive
• If, at a meeting called for the purpose of approving any payment as required by sub-section (4), a quorum is not present and, after the meeting has been adjourned to a later date, a quorum is again not present, the payment shall, for the purpose of that sub-section, be deemed to have been approved.
• If –
  • the concerned director fails to comply with the requirements of subsection (2); or

• the said director receives the payment referred to in the proviso to sub-section (1). before it is approved under sub-section (4).

the payment shall be deemed to have been received by him in trust for any persons who have sold their shares as a result of the aforesaid offer, and the expenses incurred by him in distributing that sum amongst those persons shall be borne by him.

38. Provisions supplementary to section 111, 112 and 113.–(1) Where in proceedings for the recovery of any payment as having, by virtue of sub-section (2) of section 112 or sub-section (4) of section 113 been received by any person in trust, it is proved that–
    • the payment was made in pursuance of any arrangement entered into as part of the agreement for the transfer in question. or within one year before, or within two years after, that agreement or the offer leading thereto; and
    • the company or any person to whom the transfer was made privy to that arrangement. The payment shall be deemed, except on so far as the contrary is shown, to be on one to which that provision

• If, in connection with any such transfer as is mentioned in section 112 or in section 113–
  • the price to be paid to a director of the company whose office is to be abolished or who is to retire from office, for any shares in the company held by him is in excess of the price which could, at the time, have been obtained by other holders of the like shares; or
  • any valuable consideration is given to any such director.

the excess or the money value of the consideration, as the case may be shall, for the purposes of that section, be deemed to have been a payment. made to him by way of compensation for loss of office, or as consideration for retirement from office, or in connection with such loss or retirement.

• References in sections 111, 112 and 113 to payments made to any director of a company by way of compensation for loss of office, or as consideration for retirement from office, or in connection with such loss or retirement do not include any bonafide payment by way of damages for breach of contract or by way of pension in respect of past services, and for the purposes of this sub-section, the expression “pension” includes any superannuation allowance, superannuation gratuity or similar payment.
• Nothing in section 112 and 113 shall be taken to prejudice the operation of any rule of law requiring disclosure to be made with respect to any such payments as are therein mentioned or with respect to any other like payments made or to be made to the directors of a

39. Register of directors, managers and managing agents–(1) Every company shall keep  at  its  registered  office  a register of its directors, manager and  managing agents containing with respect to each of them the following particulars,   that is to say–
    • in the case of an individual, his present name in full, any former name or surname in full, his usual residential address, his nationality and, if that nationality is not the nationality of origin, his nationality of origin and his business, occupation, if any, and if he holds any other directorship or directorships the particulars of such directorship or directorships;
    • in the case of a body corporate its corporate name and registered or principal office, and the full name address and nationality of each of its directors; and
    • in the case of a firm, the full name, address and nationality of each partner, and the date on which each became a

• The company shall within the periods specified below send to the Registrar a return in the prescribed form containing the particulars specified in the said register and a notification in the prescribed form of any change among its directors, managers or managing agents or in any of the particulars contained in the register–
  • in the case of the particulars specified in sub-section (1), within a period of fourteen days from the appointment of the first directors of the company;
  • in the case of any change in such particulars, within a period of fourteen days from the day change takes
• The register to be kept under this section shall, during business hours and subject to such reasonable restriction, as the company may by its articles or in general meeting impose so that not less than two hours in each day be allowed for inspection, be open to the inspection of any member of the company without charge and of any person on payment of ten taka or such less sum as the company may impose for each
• If any inspection required under this section is refused or if default is made in complying with sub-section (1) or (2) of this section, the company and every officer of the company who is knowingly and wilfully in default shall be liable to a fine of five hundred
• In the case of any such refusal, the Court, on application made by the person to whom inspection has been refused and upon notice to the company, may, by order, direct an immediate inspection of the

MANAGING AGENT

40. Duration of appointment  of  managing  –(1)  No  managing agent  shall, after, the commencement  of  this Act, be appointed to hold office for a term of more than ten years at a time and no managing agent shall hold office for more than twenty years.

(2). Notwithstanding anything to the contrary contained in the articles of a company or in any agreement with the company,  a managing agent of a company appointed before the commencement of this Act shall not continue to hold office after the expiry of ten years from such commencement unless than reappointed thereto.

• A managing agent whose office is terminated by virtue of the provisions of sub-section (2) shall, upon such termination, be entitled to a charge upon the assets of the company by way of indemnity for all liabilities or obligations property incurred by the managing agent on behalf of the company subject to existing charges and encumbrances, if
• The termination of the office of a managing agent by virtue of the provisions of sub-section (2) shall not take effect until all moneys payable to the managing agent for loans made to or remuneration due up to date of such termination from company are
• Nothing in this section shall apply to a private company which is not the subsidiary company of a public

41. Conditions applicable to managing agents.–Notwithstanding anything to the contrary contained in the articles of the company or in any agreement with the

• a company may, by resolution passed at a general meeting of which notice has been given to the managing agent in the same managers as to members of the company, remove a managing agent if he is convicted of an offence in relation to the affairs of the company and the offence is non-bailable within the meaning of the provisions of the code of Criminal Procedure, 1898 (Act V of 1898):

Provided that where the managing agent is a firm or company and offence committed by a member of such firm or a director or an officer holding a general power of attorney from such company shall be deemed to be an offence committed by such  firm or company:

Provided further that a managing agent shall not be liable to be removed under the provisions thereof if the offending member, director or officer as aforesaid is expelled or dismissed by the managing agent within thirty days from the date of  his conviction or if his conviction is set aside, on appea;

• the office of a Managing agent shall be deemed to be vacant if he is adjudged insolvent;
• a transfer of his office by a managing agent is a firm, a change in the partners thereof shall not be deemed to operate as a transfer of the office of managing agent, so long as one of the original partners shall continue to be a partner of the managing agent’s firm;
• a charge or assignment of his remuneration of any part thereof effected by a managing agent shall be void as against the company:
• if a company is wounded up either by the Court or voluntarily, any contract of management made with a managing agent shall be thereupon determined without prejudice, however, to the right of the managing agent to recover any moneys recoverable by the managing agent from the company:

Provided that where the Court finds that the winding up is due to the negligence or default of the managing agent himself,  the managing agent shall not be entitled to receive any compensation for the premature termination of his contract of management; and

• the appointment of a managing agent, the removal of managing agent and variation of a managing agent’s contract of management shall not be valied unless approved by the company by a resolution at a general meeting of the company notwithstanding anything to the contrary in section 104:

Provided that nothing contained shall apply to the appointment of a company’s firs agent made prior to the issue of the prospectus or statement in lieu of prospectus where the terms of the appointment of such managing agent are set forth therein.

42. Investigation of managing agents, etc.–(1) If the Government has reason to believe that the managing agent of a public company–

• has, in connection with the conduct or management of the affairs of the company, been guilty of fraud, misfeasance or breach of trust: or
• has been conduction the affairs of the company for a fraudulent or unlawful purpose; or
• has so conducted or managed the affairs of the company as to deprive the shareholders thereof of a reasonable return   on their investment;

the Government may, after giving the managing agent an opportunity of being heard, appoint and investigator to enquire   into the affairs of the company and to report on the conduct of the managing agent in such manner and within such period as the Government may direct.

Explanation.—The shareholders of a company shall be deemed to have been deprived of a reasonable return on their investment if, having regard to enterprises similarly placed for a continuous period of three years.

• The investigator appointed under sub-section (1)–
  • may, at any time, for the purpose of making any enquiry which he considers necessary, enter the premises of the company or the office of the managing agent and may call for and inspect the books of accounts or documents in the possession of the company or managing agent and may seal or take into custody any books of accounts or documents for so long as may be necessary;
  • shall have the same powers as are vested in a Court when trying a suit under the Code of  Civil Procedure, 1908 (Act V   of 1908), in respect of the following matters, namely:–
    • summoning and enforcing the attendance of any director or officer of the company or of the managing agent and examining him on oath or affirmation;
    • compelling the production of any books of accounts or documents; and
    • issuing commissions for the examination of witnesses;

• Any proceeding before the investigator shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 or the Penal Code (Act XLV of 1860).
• If the Government after considering the report submitted under subsection (1), is of opinion that it is necessary to do so in the interest of the efficient management of the affairs of the company, the Government may, without prejudice to any  other action that may be taken under this Act or any other law, by order in writing–
  • modify the terms of the managing agent’s agreement of management with the
  • require the managing agent to carry out such changes in the management or accounting procedures, within such time, as may be specified in the order; or
  • remove from office the managing agent or the director of the company nominated by the managing agent, or both the managing agent or the director so nominated:

Provided that before taking any action under this sub-section, the managing agent shall be given an opportunity of  presenting his case as to the proposed action.

• A managing agent or director removed from office under sub-section (4), shall not be entitled to or be paid any compensation or damages for loss or termination of office.
• A managing agent of a company who is removed from office under sub-section (4) shall not be appointed to such office of that company until after the expiration of a period of five years from the date of such
• Where the managing agent removed from office under sub-section (4) is firm or a company, no partner of such firm and no director or officer holding a general power of attorney from such company shall hold the office of a director or any other office connected with the conduct or management or the affairs of the company of which it was managing agent, until after the expiration of a period of five years from the date of such
• Where the managing agent of a company is removed from office under sub-section (4), the Government may by order in writing, appoint an Administrator, hereinafter referred to as the Administrator, to manage the affairs of the company subject to such terms and conditions as many be specified in the
• The Administrator shall  receive such remuneration as the Government may
• The management of the affairs of the company shall, on and from the date of appointment of the Administrator, vest in him.
• Where it appears to the Administrator that any purchase, sales or agency contract has been centered into, or any employment given to benefit the managing agent or his nominees and to the detriment of the interest of general shareholders, the Administrator may, with the previous approval writing of the Government, terminate such contract or employment.
• No person shall be entitled to or be paid any compensation or damages for the termination of any contract or employment under sub-section(11).
• If at any time it appears to the Government that the purpose of the order appointing the Administrator has been fulfilled, it may permit the company to appoint another person to the office of managing agent, and on the appointment of  new managing agent, the Administrator shall cease to hold
• Save as provided in sub-section (15), no suit, prosecution or other legal proceeding shall lie against the Administrator personally for anything which is in good faith done or intended to be done by him in pursuance of this section or of any rules made thereunder, and anything so done shall be deemed to have been done by the
• Any person aggrieved by any order of the Government under sub-section (4) or of the Administrator under  sub-section

(11) may, within sixty days from the date of the order, appeal against such order to the High Court Division.

• If any person fails, without reasonable cause, to furnish any books of accounts or documents called for under clause (a) of sub-section (2) or to comply with any order under clause (a) of clause (b) sub-section (4) or contravenes the provisions of sub-section (6) or sub-section (7) the Government may, by order in writing, direct that such person shall pay by way of penalty a sum which may extend to ten thousand taka, and in the case of continuing failure or contraception, a further sum which may extend to one thousand taka for every day after the first  day  during which the failure  or contraception
• The Government may, by notification in the official Gazette, direct that any power conferred upon it by this section shall, subject to such conditions, if any, as may be specified in the direction, be exercisable also by such person or authority as may be so
• The Government may, by notification in the official Gazette, make rules to carry out the purpose of this
• The provisions of this section shall have effect notwithstanding anything contained in any other provision of this Act or any other law, contract, or the memorandum or articles of a

43. Remuneration of managing agent.–(1) Where a company appoints a managing agent, it shall, in the documents of appointment specify the following—
    • the remuneration of the managing agent which shall be a sum based on fixed percentage of the net annual profits of the company; and
    • a minimum payment, in the case of absence or inadequacy of profits, together with office

• Any stipulation for remuneration additional to, or in any form other than, the remuneration specified in sub-section (1) shall not be binding on the company unless sanctioned by a special resolution of the
• For the purpose of this section net profits’ means the profits of the company calculated after allowing for all the usual working charges, interest on loans and advances, repairs and outgoing, depreciation, bounties, depreciation, bounties or subsidies received from Government or from a public statutory body profits by way of premium of the whole or part of the undertaking of the company, but without any deduction in respect of income-tax or super-tax, or any other tax or duty on income or for expenditure by way of intersection debentures or otherwise on capital account or on account of any sum which may be set aside in each year to of the profits for reserve of any other special
• This section shall not apply to a private company except a private company which is the subsidary company of a public company or to any company whose principal business is the business of

44. Loans to managing agents.–(1) No company shall make to managing agent of the company or to any partner of the firm if the managing agent is a firm or to any member of director of the private company if the managing agent is a private company any loan out of moneys of the company or guarantee any loan made to a managing

• Nothing contained in this section shall apply to any credit held by a managing agent in current account by the company with the managing agent for the purpose of the business of the company:

Provided that the Board of Directors may specify the limit of such credit.

• In the event of any contraception of sub-section (1) any director of the company who is a party to the making of the loan or giving of the guarantee shall be punishable with fine which may extend to five thousand taka and, if default is made in repayment of the loan or discharging the guarantee, shall be liable jointly and severally for the amount
• Nothing in this section shall apply to a private company except a private company which is the subsidiary of a public company.
• Except with the consent of three-fourths of the directors present and entitled to vote on the resolution, a managing agent of the company, or the firm of which he is a partner, or any partner of such firm or, if the managing agent is a private company a member or director thereof, shall not enter into any contract for the sale, purchase or supply for goods and materials with the

45. Loans to or by companies under the same management.–(1) No company incorporated under this Act which is under the management of a managing agent shall make any loan to or guarantee any loan made the any company under management of the same managing agent:

Provided that nothing herein contained shall apply to loans made or guarantees given by a company to or on behalf of a company under its own management or loans made by or to a company to or by a subsidiary thereof or to guarantees given by a company on behalf of a subsidiary thereof.

(2) In the event of any contraception of the provisions of this section, any director or officer of the company making the loan or giving the guarantee, who is knowingly and wilfully in default, shall be liable to a fine not exceeding five  thousand taka  and shall jointly and severally be liable for any loss incurred by the company in respect such of loan or guarantee.

46. Purchase by company of shares of  company  under  same  managing  —  A  company  other  than  an investment company, that is to say, a company whose principal business the acquisition and holding of shares, stocks, debentures or other securities, shall not purchase shares or debentures of any company under management by the same managing agent, unless the purchase as been previously approved by unanimous decision of the Board of Directors of the purchasing company.
47. Restriction on managing agent’s powers  of  —  A  managing  agent  shall  not  exercise,  in  respect  of any company of which he is a managing agent, a power to issue debentures or, except with the authority of the directors and within the limits fixed by them, a power to invest the funds of the company and any delegation of any such powers by a company to a managing agent shall be void.
48. Managing agent not to engage in business competing  with  the  business  of  managed    —  A  managing agent shall not on his own account an engage in any business which is of the same nature as and directly competes with the business carried on by a company under his management or by a subsidiary company of such company.
49. Limit on number  of  director  appointed  by  managing  —  Notwithstanding anything  contained in  the  articles of a company other than a private company, the directors appointed by the managing agent shall not exceed in number one- third of the whole number of directors.

CONTRACTS

50. Validity of written and unwritten contracts.–(1) Contracts on behalf of a company may be made as follows, that is to say–

(i) any written contract which, if made between individual, would be by law required to be in writing, signed by the parties to be charged therewith, may be made on behalf of the company in writing signed by any person acting under its authority, express or implied, and may in the same manner be varied or discharged; and

(2) All contract made according to this section shall be effectual in law and shall bind the company and its successors and all other parties thereto, their heirs, of legal representatives, as the case may be.

51. Bills of exchange and promissory –A bill of exchange, hundi or promissory note shall be deemed to have been made, drawn, accepted or endorsed on behalf of a company if made, drawn, accepted or endorsed in the name of, or on behalf or on account of, the company by any person acting under its authority express or implied.
52. Execution of deeds.– A company may, by writing under its common seal empower any person, either generally or in respect of any specified matters, as its attorney to execute deeds on its behalf in any place, either in or outside Bangladesh; and every deed signed by such attorney, on behalf of the company and under his seal, where sealing is required, shall bind the company and have the same effect as if it were under its common seal.
53. Power of company to have official seal for use abroad.–(1) A company whose objects require or comprise the transaction of business beyond the limits of Bangladesh may, if authorised buy its articles, have for use in any territory, district or place not situated in Bangladesh, an official seal which shall be a facsimile of the common seal of the company with the addition on its face of the name of every territory, district of place where it is to be

• A company having such an official seal may, by writing under its common seal, authorise any person appointed for the purpose in any territory, district or place not situated in Bangladesh to affix the same to any deed or other document to which the company is party in that territory, district or place and such person shall be the agent for purpose of using the said seal.
• The authority of any such agent shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or if no period is there mentioned, then until notice of the revocation or determination of the agent’s authority has been given to the person dealing with
• The person affixing any such official seal shall, by writing under his hand, on the deed or other document to which the seal is affixed, certify the date and also the territory, district or place or affixing the
• A deed or other document to which an official seal is duly affixed shall bind the company as if it had been sealed with the common seal of the company.

54. Disclosure of interest by director in respect of contract etc.– (1) Every director who is  directly  or  indirectly  concerned or interested in any contract or arrangement entered into by or on behalf of the company shall disclose the nature of his interest at the meeting of the directors at which the contract or arrangement is determined on, of his interest then exists, or, in any other case, at the first meeting of the directors after the acquisition of his interest or the making of the contract or arrangement:

Provided that general notice that a director is a director or a member of any specified company or of any specified firm, and  is to be regarded as interested in any subsequent transaction with such firm or company, shall as regards any such  transaction be sufficient disclosure within the meaning of there is sub-section and after such general notice, it shall not be necessary to give any special notice relating to any particular transaction with such firm or company.

• Every director who contravenes the provisions of sub-section (1) shall be liable to a fine not exceeding five thousand
• A register shall be kept by the company in which shall be entered particulars of all contracts or arrangements to which sub-section (1) applies, and which shall be open to inspection by any member of the company at the registered office off the company during business
• Eery officer of the company who knowingly and willfully acts in contravention of the provisions of sub-section (2) shall be liable to a fine not exceeding one thousand

55. Prohibition of voting by interested director.–(1) No director shall, as a director, vote  on  any  contract  or  arrangement in which he is either directly or indirectly concerned or interested, nor shall his presence count for the purpose   of forming a quorum at the time of any such vote, and if he does so vote, his vote shall not be counted:

Provided that the directors or them may vote on any contract of indemnity against any loss which they or any one or more of them may suffer by reason of becoming or being sureties or surety for the company.

• Every director who contravences the provision of sub-section (1) shall be liable to a fine not exceeding five thousand
• This section shall not apply to a private company:

Provided that where a private company is subsidiary company of a public company, this section shall apply to all contracts or arrangements made on behalf of the subsidiary company with any person other than the holding company.

56. Disclosure to members in  case  or  contract  appointing  a  –(1)  Where  a company  enters into a  contract for the appointment of a manager or managing agent or the company in which contract any director of the company is  directly of indirectly concerned or interested, or varies any such existing contract, the company shall, within twenty-one days from the date or entering into the contract or the verying of the contract, send an abstract of the terms of such contract or variation, as the case may be together with a memorandum clearly indicating the nature of the interest of the director in   such contract, or in such variation, to every member; and the contract shall be open to inspection of any member at the registered office of the company.

(2) If a company makes default in complying with the requirements of sub-section (1), it shall be liable to a fine not  exceeding five thousand taka; and every officer of the company, who is knowingly and willfully in default, shall be liable to  the like penalty.

57. Contracts by agents of company in which company is undisclosed principal.—(1) Every manger or other agent of a company other than a private company, not being the subsidiary company of a public company, who centers into a contract for or on behalf of the company in which contract the company is an undisclosed principal shall, at the time of entering into the contract, make, a memorandum in writing of the contract, and specify therein the person with whom it has been

• Every such manager or other agent shall forthwith deliver the memorandum aforesaid to the registered office of company and send copies to the directors, and such memorandum shall be filed in the office of the company and laid before the directors at the next directors
• If any such manager or other agent makes default in complying with the requirements of this section–
  • the contract shall, at the option of the company, be void as against the company; and
  • such manager or other agent shall be liable to a fine not exceeding five hundred

Prospectus

58. Dating of prospectus.—A prospectus issued by or on behalf of a company or in relation to an intended company shall be dated, and that date shall, unless the contrary is proved, be taken as the date of publication of the
59. Matters to be stated and reports to be set out in prospectus.–(1) Every prospectus issued by or on behalf of a company, or by on behalf of any person who is or has been engaged or interested in the formation of a company shall state the matters and set out the reports specified in parts I and II respectively of schedule III; and the said Parts I and II shall have effect subject to the provisions contained in Part III of the said

• Where an applicant for shares or debentures of a company it required to accept a condition which has the effect of waiving the compliance with any of the requirements of this section, or which purports to effect him with notice of any contract document of matter not specifically  referred to in the prospectus, such condition shall be
• No person shall issue any form of application for shares in or debentures of a company, unless the form is accompanied by a prospectus which complies with the requirements of this section:

Provided that this sub-section shall not apply if it is shown that the form of application was issued either–

• in connection with a bonafide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures; or
• in relation to shares or debentures which were not offered to the public.

• If any person acts in contravention of the provision of sub-section (3) he shall be punishable with fine which may extend to five thousand
• A director or other person responsible for the prospectus shall not incur any libaility by reason of any non compliance with, or contravention of, any of the requirements of this section if–
  • as regards any matter not disclosed, he proves that he had no knowledge thereof; or
  • he proves that the non-compliance or contravention arose form an honest mistake of the fact on his part; or
  • the non-compliance or contravention in respect or matters which in the opinion of the court dealing with the case, were inmaterial or was otherwise such as ought, in the opinion of that court, having regard to all the circumstances of the case, reasonably to be excused :

Provided that no director or other person shall incur any liability in respect of the failure to include in a prospectus a  statement with respect to the matters specified in clause 18 of Part I of Schedule III, unless it is proved that he had knowledge of the matters not disclosed.

• This section section not apply–
  • to the issue to existing members or debentures holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or beberture will or will not have the right to renounce in favour of other persons :
  • to the issue of a prospectus or form of application relating to shares or debentures which are, or are to be, in all respects uniform with shares or debentures previously issued and for the time being dealt in of quoted on a recognised stock exchange;

but subject as aforesaid, this section shall apply to a prospectus or a form of application, whether issued on or with reference to the formation of a company or subsequently.

• Nothing in this section shall limit or diminish any liability which any person may incur under any other law or under this Act apart from this

60. Expert to be unconnected with formation or management or  —  A  prospectus  inviting  persons  to  subscribe for shares in or debentures of a company shall not include a statement purporting to be made by and expert,  unless the expert is a person who is not, and has not been, engaged or interested in the formation or promotion or management of the company.

137 Expert’s consent to issue of prospectus containing statement by him.–A prospectus inviting persons to subscribe  for shares in or debentures of a company and including a statement purporting to be made by and expert may be issued, if—

• he has given his written consent to the issue thereof , with the statement included in the form and context in which it is included, and has not withdrawn such consent before the delivery of a copy of the prospectus for registration; and
• another statement that he has given and has not withdrawn his consent as aforesaid appear’s in the

138. Registration of prospectus.—(1) No prospectus shall be issued by or on behalf of a company or in relation to an intended company unless, on or before the date of its publication, there has been delivered to the Registrar for registration a copy thereof signed by every person who is named there in as a director or proposed director of the company, or by his agent authorised in

• The copy of the prospectus delivered to the Registrar for registration under sub-section (1) shall have endorsed thereon or attached thereto–
  • any consent of the issue of the prospectus required by section 137 from any person as an expert; and
  • in the case of a prospectus issued generally, also–

• a copy of every contract specified in clause 16 of part of a Schedule III or in the case of a contract not reduced into writing a memorandum giving full particulars thereof; and
• where the persons making any report required by Part II of that Schedule Have made therein, or have, without giving the reasons, indicated therein, any such adjustments as are mentioned in clause persons setting out the adjustments and giving the reasons

• Every prospectus to which sub-section (1) applies shall, on the face of it–
  • state that a copy has been delivered for registration as required by this section;
  • specify any document required by this section to be endorsed on or attached to the copy so delivered; and
  • a list of statements included in the
• The Registrar shall not register a prospectus unless the requirements of section 134, 135, 136 and 137 and sub-section (1), (2) and (3) of this section have been complied with and the prospectus is accompanied by the consent in writing of the person, if any , named therein as the auditor, legal adviser, attorney, solicitor, banker or broker of the company or intended company, to act in that
• No Prospectus shall be issued more than ninety days after the date on which a copy there of is delivered for registration, and if a prospectus is so issued, it shall be deemed to be a prospectus a copy of which has not been delivered under this section to the
• If a prospectus is issued without a copy thereof being delivered under this section to the Registrar or without the copy so delivered having been endorsed thereon or attached thereto the required consent or documents, the company, and every person who is knowingly and willingly a party to the issue of the prospectus, shall be punishable with the fine which may extend to five thousand

139. Penalty for contravention  of  section  136  and  –(1)  If any prospectus is issued in contravention of sections 136 or 137, the company and every person. who is knowingly a party to the issue thereof, shall be punishable with fine which  may extend to five thousand taka.

(2) For the purposes of this section and section 136 and 137, the expression “expert” includes an engineer, a valuer, an accountant and any other person whose profession gives authority to a statement made by him.

140. Allotment of shares and debentures to be dealt in on stock exchange—Where  a  prospectus,  whether  issued  generally or not, states that an application has been or will be made for permission for the shares or debentures offered thereby to be dealt in one or more recognised stock exchanges, such prospectus shall state the name of the stock exchange or , as the case may be, each such stock exchange.  and any allotment  made on an application in pursuance of the  prospectus shall be void, if the permission has not been applied for before the tenth day after the first issue of the  prospectus, or where such permission has been applied for before issue of prospectus, if the permission has not been granted by the first issue of the prospectus, or where such permission has been applied for before issue of prospectus, if the permission has not been granted by the stock exchange or each such stock exchange, as the case may by, within six weeks after the date of the closing of the subscription.

• Where the permission referred to in sub-section (1) has not been applied for or, such permission having been applied for, has not been granted as specified in that sub-section, the company shall repay without interest all moneys received from applicants in pursuance of the prospectus, and if any such money is not repaid within thirty days after the tenth day or as the case may be, the six weeks as specified in that sub-section, the directors of the company shall be jointly and severally liable to repay that money with interest at the rate of five percent above the bank rate :

Provided that a director shall not be liable if be proves that the default in he payment of the money was not due to any misconduct or negligence on his part.

• All moneys received as subscription for the allotment of shares or debentrures shall be kept in a separate bank account and shall be repaid within the time and the manner specified in sub-section (2) and if default is made in complying with this sub-section the company and every officer of the company who is knowingly and willfully in default shall be punishable with fine not exceeding five thousand taka,
• Where an applicant for shares or debentures is required to accept a condition has the which has the effect of waiving compliance with any requirement of this section shall be
• For the purposes of this section, permission shall not be deemed to be refused if it is intimated that the application for it will be given further
• The other provisions of this section shall have effect—
  • in relation to any shares or debentures agreed to be taken by a person underwriting an offer thereof by a prospectus, as if he had applied thereof in purpsuance of the prospectus;

(b)74 in relation to prospectus offering shares for sale, with the following modifications, namely :—

• references in the said other provisions to sale shall be substituted for references to allotment;
• the persons by whom the offer is made, and not the company, shall be liable under sub-section (2), to repay money received from applicants, and references to the company’s liability under that sub-section shall be construed accordingly; and
• for the reference in sub-section (3) to “the company” and “every officer of the company who is knowingly and willfully in default,” there shall be substituted a reference to “any person by or through whom the offer is made” and who is knowingly and willfully guilty or, willfully, authorises or permits, the defaults”
• No prospectus shall state that application has been made for permission for the shares or debentures offered there by for being dealt an stock exchange, unless it is a recognised stock

141. Obligations of companies where o prospectus issued.—(1) A  company  having  a  share  capital  which  does  not issue a prospectus on or with reference to its formation, on which has issued such a prospectus but has not proceeded to   allot any of its shares or debentures offered to the public for subscription shall not allot any of its shares or debentures unless within three days after the first allotment of either shares or debentures, there has been delivered to the Registrar for registration a statement in lieu of prospectus, signed by every person who is named therein as director or proposed director  of the company or his agent authorised in writing in the form and containing the particulars set out in part I of Schedule IV and, in the cases mentioned in Part II of that Schedule, setting out the reports specified therein, and the said Part I and II shall have effect subject to the provisions contained in Part III of that

• Every statement in lieu of prospectus delivered under sub-section (1) shall, where the persons making many such report as specified that sub-section have made therein, or have without giving the reasons indicated therein, any such adjustments as are mentioned in Part III of the Schedule IV have endorsed thereon or attached thereto a written statement signed by those person, setting out the adjustment and giving the reasons
• This section shall not apply to a private
• If a company acts in contravention of sub-section (1) or (2) the company and every director of the company and every director of the company who knowingly and willfully authorise; or permits the contravention, shall be punishable with fine which may extend to two thousand taka.
• Where a statement in lieu of prosperous delivered to the Registrar under sub-section (1) includes any untrue statement, any person who authorised or permitted the delivery of the statement in lieu of prospectus for registration shall be  punishable with imprisonment for a ten years or with fine which may extend to two years or with fine which may extend five thousand taka or with both, unless he proves either that the statement was immaterial or that he had reasonable ground to believe, and did up to the time of the delivery for registration of the statement lieu of prospectus believe, that the statement was true
• for the purposes of this section—
  • a statement included in a statement in lieu of prospectus shall be deemed to be untrue, if it is misleading in the form and context in which it is included; and
  • where the omission from a statement in lieu of prospectus of any matter is calculated to mislead, the statement in lieu of prospectus shall be deemed, in respect to such omission, to be a statement in lieu of prospectus containing an untrue statement.
• For the purposes of sub-section (5) and clause (a) of sub-section (6) the expression “included”, when used with reference to a statement in lieu of prospectus, means included in the statement in lieu of prospectus itself of contained in any report or memorandum appearing on the face thereof or by reference incorporated therein, or issued

142. Document containing offer  of  shares  or  debentures  for  sale  to  be  deemed  a  prospectus—(1)  where  a  company allots or agrees to allot any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public, any document by which the offer for sale to the public is made shall, for all purposes be deemed to be a prospectus issued by the company, and all enactment’s and rules of law as to the contents of prospectus and as to liability in respect of statements in and omissions from prospectus, or otherwise relating to prospectus, shall apply and have effect accordingly, if the shares or debentures had been offered to the public for subscription and as if the persons accepting the offer in respect of any shares or debentures were subscribers for those shares or debentures but without prejudice to the liability, if any, of the persons by whom the offer is made in respect of misstatements contained in  the document or otherwise in respect

• For the purposes of this Act, it shall, unless the contrary is proved, be evidence that an allotment or an agreement to allot shares or debentures was made with a view to the shares or debentures being offered for sale to the public if it is shown—
  • that an offer of the shares or debentures or of any of them for sale to the public was made within one hundred and eighty days, after the allotment or agreement to allot; or
  • that at the date when the offer was made, the whole consideration to be received by the company in respect of the shares or debentures had not been so
• In case of the document, mentioned in sub-section (1), section 135 shall have effect as if it required a prospectus to state, in addition to the matters required by that section to be stated, in a prospectus—
  • the net amount of the consideration received or to be received by the company in respect of the shares or debentures to which the offer relates; and
  • the place and time at which the contract under which the said shares or debentures have been or are to be allotted may be
• Section 138 shall apply to the person of persons making the offer mentioned in sub-section (1) as though they were person named in a prospectus as directors or proposed directors of a
• Where the persons making an offer mentioned in sub-section (1) is a company or firm, it shall be sufficient if the document referred in sub-section(1) is signed on behalf of the company or firm by two directors of the company or by not less than one-half of the partners in the firm, as the case may be, and any such director or partner may sigh by his agent authorised in

143. Interpretation of provisions relation to prospectus.—(1) For the purposes of the provisions relating to prospectus—

• a statement included in a prospectus shall be deemed to be unture, if the statement is misleading in the form and context in which it is included; and
• where the omission from a prospectus of any matter is calculated to mislead, the prospectus shall be deemed in respect of such omission to be a prospectus containing untrue statement.

• For the purposes of section 145, 146 and clause (a) of sub-section (1) of this section, the expression “included” when used with reference to a prospectus, means included in the prospectus itself or contained in any report of memorandum appearing on the face thereof or by reference incorporated therein or issued

144. Restriction on alteration of terms of prospectus or statement in lieu of prospectus.— A company shall not, at   nay time, very the terms of a contract referred to in the prospectus or statement in lieu of prospectus, except with the approval of, or except under an authority given by, the company in general
145. Civil liability for misstatement in prospectus.—(1) Subject to the provisions of this  section, where  a  prospectus invites members of the public to subscribe for shares in or debentures of a company, the following persons shall be liable to pay compensation to every person who subscribes for any shares or debentures on the faith of the prospectus for any loss or damage he may have sustained by reason of any untrue statement included therein, that is to say—
     • every person who is a director of the company at the time of the issue of prospectus;
     • every person who has authorised himself to be named and is named in the prospectus either as a director, or as having agreed to become a director, either immediately or after an interval of some time;
     • every person who is a promoter of the company; and
     • every person who has authorised the issue of the prospectus :

Provided that where, under section 138, the consent of a person is required to the issue of a prospectus and he has given   that consent, or where the  consent of a person named in a prospectus is required and he has given that consent, he shall  not, by reason of having given such consent, be liable under this sub-section as a person who has, as referred to in claused (d), authorised the issue of the prospectus, except in respect of an untrue statement, if any, which is included in accordance with section 137 with the consent or under the authority of a person purporting to be an expert. (2) No person shall be liable under sub-section (1), if he proves—

• that having consented to become a director of the company, he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent; or
• that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
• that, after the issue of the prospectus and before allotment thereunder, he, on becoming aware of any untrue statement therein, withdrew his consent to the prospectus and gave reasonable public notice of the withdrawal and of the reason therefor; or
• that—
  • as regards every untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures, as the case may be, believe that the statement was true; and
  • as regards every untrue statement purporting to be a statement by an expert or contained in what purports to be a copy of or an extract from a report or valuation of an expert, it was a correct and fair presentation of the statement, or a correct copy of or a correct and fair extract from, the report and valuation; and he had reasonable ground to believe, and did up to the time of the issue of the prospectus believe, that the person making the statement was competent to make it and that person had given the consent required by section 137 to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration or, to the defendant’s knowledge, before allotment thereunder: and
  • as regards every untrue statement purporting to be a statement made purporting to be a statement made by  an official person or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of that statement, or correct copy of or a correct and fair extract from, the document

Provided that this sub-section shall not apply in the case of a person liable by reason of his having given a consent required of him by section 137 as a person who has authorised the issue of the prospectus in respect of an untrue statement purporting to be made by him as an expert.

• A person who, would, under sub-section (1) be liable by reason of his having given a consent required of him by section 137 as a person who has authorised the issue of a prospectus in respect of an untrue statement purporting to be made by him as an expert, shall not be so liable, if he proves—
  • that having given his consent under section 137 to the issue of the prospectus, he withdrew it in writing before delivery of a copy of the prospectus for registration; or
  • that, after delivery of a copy of the prospectus for registration and before allotment thereunder, he, on becoming aware of the untrue statement, withdrew his consent in writing and gave reasonable public notice of the withdrawal and of the reason therefor; of
  • that he was competent make the statement and that he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures, believe, that the statement was
• Where–
• the prospectus specifies the name of a person as a director of the company, or as having agreed to become a director thereof, and he has not consented to become a director, or has withdrawn has consent before the issue of the prospectus, and has not authorised or consented to the issued thereof; or
• the consent of a person is required under section 137 to the issue of the prospectus and be either has not given that consent or has withdrawn it before issue of the

the directors of the company excluding those without whose knowledge or consent the  prospectus was issued and every  other person who authorised the issue thereof, shall be liable to indemnify the person referred to in clause (a) or clause (b), as the case may be,, against all damages, costs and expenses to which be may be made liable by reason of his name having been interested in the prospectus or of the inclusion therein of a statement purporting to be made by him as an expert, as  the case may be, or in defending himself in any suit or legal proceeding brought against him in respect thereof:

Provided that a person shall not for the purposes of this sub-section be deemed to have authorised the issue pf a prospectus by reason only of his having given the consent required by section 137.

• Every person who, becomes liable to make any payment by virtue of this section may recover contribution, as in cases of contract, from any other person who, if issued separately, would have been liable to make the same payment, unless the former person was, and the later person was not, guilty of fraudulent
• For the purposes of this section—
  • the expression “promoter” means a promoter who was a party to the preparation of the prospectus or of the portion thereof containing the untrue statement, but does not include any person by reason of his acting a professional capacity for persons engaged in procuring the formation of the company; and
  • the expression “expert” has the same meaning as in section

146. Penalty for unture statement in prospectus.— (1) Where a prospectus issued after the commencement of this Act includes any untrue-statement every person who authorised the issue of the prospectus shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to five thousand taka or with both, unless he proves either that the statement was immaterial or that he had reasonable ground to believe, and did, up to the time of the issue of the prospectus, believe the statement was

• A person shall not be deemed for the purposes of this section to have authorised the issue of a prospectus by reason only of his having given—
  • the consent required by section 137 to the inclusion therein of statement purporting to be made by him as an expert ; or
  • the consent required by sub-section (4) of section

147. Penalty for fraudulently inducing persons to invest money : Any person who either by knowingly or recklessly making any statement, promise or forecast which is false, deceptive of misleading, or by induce another person to enter into, or to offer into—

• any agreement for, or with a view to acquiring, disposing of, subscribing for, or underwriting shares or debentures; or
• any agreement, the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of shares or debentures, or by reference to fluctuation in the value of shares or

shall be punishable with imprisonment for a term which may extend to five years or with fine which my extend to fifteen thousand taka or with both.

148. Restriction as to allotment.— (1) No allotment shall be made of any share capital of a company offered to the public for subscription, unless the following amount and at least 5% of that amount have been paid in cash to the company, namely—
     • the amount stated in prospectus as the minimum amount which in the opinion of the directors, must be raised by the issue of share capital in order to provide for the matters specified in sub-section (2);
     • if any part of the minimum amount is to be defrayed in any other manner, the balance of the minimum amount after deduction the amount required to be so defrayed.

• The matters for which provision for the raising of a minimum amount of share capital must be made by the directors are the following namely—
  • the purchase price of any property purchased or to be purchased which is to be defrayed in whole or in part out of the proceeds of the issue ;
  • any preliminary expenses payable by the company and any commission so payable to any person in consideration of his agreeing to subscribe for or of his procuring or agreeing to procure subscriptions for any shares in the company;
  • the repayment of any moneys borrowed by the company in respect of the foregoing matters ; and
  • working
• The amount referred to in sub-section (1) as the amount stated in the prospectus shall be reckoned exclusively of any payable otherwise than in cash and is in this Act referred to as the minimum
• All moneys received from applicants for shares shall be deposited and kept in a scheduled bank as defined in the Bangladesh bank Order, 1972 (PO No. 127 of 1972 ), until returned in accordance with the provisions of sub-section (7) or until the certificate to commence business is obtained under section 150(2).
• In the event of any contravention of the provisions of sub-section (4) every promoter, director or other person knowingly responsible for such contravention shall be liable to a fine not exceeding five thousand
• The amount payable on application on each share shall not be less than five percent of the nominal amount of the
• If the conditions aforesaid have not been complied with within a period not exceeding one hundred and eighty days the first issue of the prospectus, or within forty days from the closing date of subscription-list as specified in the prospectus, whichever is earlier, all moneys received form applicants of shares or debentures shall be forthwith repaid to them without interest, and if any which money is not so repaid within the aforesaid period, the directors of the company, shall be jointly and severally liable to repay that money with interest at the rate of five percent above the bank after expiry of the aforesaid period.
• No allotment shall be made of any shares in, or debentures of, a company in pursuance of a prospectus issued and no proceedings shall be taken on applications made in pursuance of a prospectus so issued, until the beginning of the eight day after that on which the prospectus is first so issued or such later time, if any as may be specified in the

Provided that where, after a prospectus is first issued, a public notice is given by some person responsible under section 145 for the prospectus which has the effect of excluding, limiting or diminishing his responsibility, no allotment shall be made  until the beginning of the eighth day after that on which such public notice is first given.

• An application for shares in, or debentures of, a company, which is made in pursuance of a prospectus issued shall not be revocable until after the expiration of the eighth day after the time of the opening of the subscription list, or the giving, before the expiry of the said eighth day by some person responsible under section 145 for the prospectus, of a public notice having  the effect under that section of excluding, limiting or diminishing the responsibility of the person giving
• Where an applicant for shares or debentures is required to accept condition which has the effect of waiving compliance with any requirement of this section shall be void.
• This section, except sub-section (6) thereof, shall not apply to any allotment of shares subsequent to the first allotment of shares offered to the public for
• In the case of the first allotment of share capital payable in cash of any company which does not issue any invitation to the public to subscribe for its shares, on allotment shall be made unless the minimum subscription, that is to say—
  • the amount, if any fixed by the memorandum or articles and named in the prospectus or in the statement in lieu of prospectus as the minimum subscription upon which the director may proceed to allotment; or
  • if no amount is so fixed and named, the whole amount of the share capital other than that issued or agreed to be issued as fully or partly paid up otherwise than in cash;

has been subscribed and an amount not less than five percent of the nominal amount of each share payable in cash has been paid to and received by the company.

• Sub-section (12) shall not apply to a private company or to a company which has allotted any shares or debentures before the commencement of this

149. Effect of irregular allotment. — (1) An allotment made by a company to an applicant in contravention  of  the  provision of section 141 or section 148 shall be voidable at the instance of the applicant within one month after the holding of the statutory meeting of the company and not later or, in any case where the company is not required to hold a statutory meeting or where the allotment is made after the holding of the statutory meeting, within one month after the date of the allotment and not later, and shall be so voidable notwithstanding that the company is in the course of being wound

(2) If any director of a company knowingly contravenes or permits or authorises the contravention of any of the provisions of section 141 or section 148 with respect to allotment, he shall be liable to compensate the company and the allottee for any loss, damages or costs which the company or the allottee may have sustained or incurred thereby :

Provided that Proceedings to recover any such loss, damages or costs shall not be commenced after the expiration of two years from the date of the allotment.

150. Restrictions or commencement of — (1) A company shall not commence any business or exercise any borrowing powers unless—

• shares held subject to the payment of the whole amount thereof in cash have been allotted to an amount not less in the whole than the minimum subscription; and
• every director of the company has, out of the shares taken or contracted to be taken by him, paid in cash on each of the shares.
  • where the shares are offered for public subscription, an amount equal to the amount to be paid on application for shares by the members of the public; or
  • where the shares are not offered, and amount payable in cash by the director on such share :
• there has been field with the Registrar a duly verified declaration by the secretary or one of the directors in the  prescribed from, that the aforesaid conditions have been complied with; and
• in the case of a company which does not issue a prospectus inviting the public to subscribe for its shares, there has been filed with the Registrar a statement in lieu of
• The Registrar shall, on the filing of a duly verified declaration, in accordance with the provisions of sub-section (1) certify that the company is entitled to commence business, and that certificate shall be conclusive evidence that the company is so entitled :

Provided that in the case of a company which does not issue a prospectus inviting the public to subscribe for its shares, the Registrar shall not give such a certificate unless a statement in lieu of prospectus has been filed with him.

• Any contract made by a company before the date at which it is entitled to commence business shall be provisional only, and shall not be binding on the company until that date and on that date it shall become
• Nothing in this section shall prevent the simultaneous offer for subscription or allotment of any shares, and debentures or the receipt of any money payable on application for shares or
• If any company commences business or exercises borrowing powers in contravention of this section, every person who is responsible for the contravention shall, without prejudice to any other liability, be liable to a fine not exceeding one thousand taka for every day during which the contravention
• Nothing in this section shall apply to a private company, or to a company which does not issue a prospectus inviting the public to subscribe for its shares, and the provisions of this section in so far as they relate to shares, shall not apply to a company limited by guarantee and not having a share