6.

The Companies Act (Bangladesh), 1994

(See section 404)

(Published by Notification No. SRO 177-law dated 1-10-95. of Ministry of Commerce)

Act No. 18 of 1994

An Act

to consolidate and amend the law relating to companies and certain other associations.

WHEREAS it is expedient to consolidate and amend the law relating to companies and
certain other Associations;

It is hereby enacted as follows:

PART-I
PRELIMINARY

1.Short title and commencement

(1) This Act may be called the Companies Act, 1994.

(2) It shall come into force on such rate as the Government may, by notification in the
Official, Gazette, appoint.

2. Definitions
(1) In this Act, unless there is anything repugnant in the subject or context,-

(a) "articles" means the articles of association of a company including, so far as they apply to
the company, the regulations contained in Schedule I to this Act:

Provided that the article of association of a company framed under any law relating to
companies at any time in force before the commencement of this Act shall, so far as they are
not inconsistent with the provisions of this Act, be deemed to be the articles of association of
that company framed in accordance with the provisions of the Act:

(b) "banking company" means a bank company as defined in section 5(9) of the Act, 1991
(Act No. 14 of 1991).

(c) "company" means a company formed and registered under this Act or an existing
company;
(d) "The Court" means the Court having jurisdiction under this Act;

(e) "debenture" includes debenture stock, bonds and any other securities of a company,
whether constituting a charge on the assets of company or not;

(f) "director" includes any person occupying the position of director by whatever name
called;

(g) "District Court" means the principle Civil Court of original jurisdiction in a district, but
does not include the High Court Division, in the exercise of its ordinary civil jurisdiction;

(h) "existing company" means a company formed and registered under any law relating to
companies in force at any time before the commencement of this Act, and is in operation
after commencement of this Act,

(i) "financial year" means, in relation to any body corporate, the period in respect of which
any profit and loss account of the body corporate laid before it in annual general meeting is
made up, whether that period is a year or not;

Provided that in relation to an insurance company, "financial year" shall mean the calendar
year;

(j) "insurance company" means a company that carries on the business of insurance either
solely or in common. with any other business or businesses;

(k) "manager" means an individual who, subject to the superintendence, control and direction
of the Board of Directors, has the management of the whole, or substantially the whole, of the
affairs and business of a company , and includes a director or any other person occupying the
position of a manager, by whatever name called, and whether under a contract of service or
not;

(l) "managing agent' means a person, firm or company by whatever name called, who or
which is entitled to the management of the whole affairs and business of a company by virtue
of an agreement with the company, and under the control and direction of the directors except
to the extent, if any, otherwise provided for in the agreement;

(m) "managing director" means a director who, by virtue of an agreement with the company
or of a resolution passed by the company in its general meeting or by its directors or by virtue
of its memorandum or articles of association, is entrusted with the substantial powers of
management which would not otherwise be exercisable by him and includes a director
occupying the position of a managing director by whatever name called;

Provided that the powers to do administrative acts of a routine nature when so authorised by
the directors such as the power to affix common seal of the company to any document or to
draw and endorse any cheque on the account of the company in any bank or to draw and
endorsed negotiable instrument or to sign any certificate of share or to direct registration of
transfer of any shares shall not be deemed to be included within the substantial powers of
management:

Provided further that a managing director of a company shall exercise his powers subject to
the superintendent control and direction of the directors.

(n) "memorandum" means the memorandum of association of a company as originally

framed or as altered in pursuance of the provisions of this Act;

(o) "officer" means a director, managing agent, manager secretary or any other officer of a
company and also includes--

(i) where the managing agent is a firm any partner in the firm;

(ii) where the managing agent is a body corporate, any director or manager of the
body corporate;

(iii) where the secretary is a body corporate;

Provided that. except for the purpose of sections 331, 332, and 333, the form "officer" shall
not include an auditor.;

(p) "prescribed" means as respects the provisions of this Act relating to the winding up of
companies, prescribed by rules made by the Supreme Court and, as respect the other
provisions of this Act, prescribed by the Government;

(q) "private company" means a company which by its articles--

(i) restricts the right to transfer its shares, if any;

(ii) prohibits any invitation to the public to subscribe for its shares or debenture, if
any;

(iii) limits the number of its members to fifty not including persons who are in its
employment;

Provided that where two or more persons hold one or more shares in a company jointly, the
shall, for the purposes of this definitation be treated as a single member;

(r) "public company" means a company incorporated under this Act or under any law at any
time in force before the commencement of this Act and which is not a private company;
(s) "Registrar" means a Registrar or any other officer, by whatever designation, performing
under this Act the duty of registration of companies;

(f) "Schedule" means a schedule to this act;

(u) "secretary" means any individual possessing the prescribed qualifications appointed to
perform the duties which may be performed by a secretary under this Act and any other
ministerial or administrative duties, and

(v) "share" means a share in the capital of the company, and includes stock except when a
distinction between stock and shares is expressed or implied.

(2) For the purposes of this Act, a company shall subject to the provisions sub-section (4), be
deemed to be a subsidiary of another, if--

(a) that other contrats the composition of Board of Directors of the first mentioned company.

(b) the first mentioned company, being an existing company, has before the commencement
of this Act, issued preference shares the holders of which have the same voting right in all
respects as the holders of equity shares and that other company exercises or controls more
than half of the total voting power of the first mentioned company; or

(c) the first mentioned company is not a subsidiary within the meaning of clause (b), but that
other company holds more than half in nominal value of its equity share_capital; or

(d) the first mentioned company is a subsidiary of a third company with is that other's
subsidiary.

(3) For the purposes of sub-section (2), the composition of a company's Board of Directors
shall be deemed to be controlled by another company if, that other company, by the exercise
of some power exercisable by it at its discretion without the consent or concurrence of any
other person, can appoint or remove the holders of all or a majority of the directors, and for
the purposes of this sub-section that other company shall be deemed to have power to appoint
to a directorship with respect to which any of the following conditions is satisfied, that is to
say--

(a) that power of appointment cannot be exercised except in favour of an individual,

(b)) that an individuals appointment thereto follows necessarily from his appointment as
director, managing agent, secretary
or manager of or to any other office of employment in, that other company; or

(c) that the directorship is held by an individual nominated by that other company or a
subsidiary thereof.
(4) In determining whether one company is a subsidiary of another the following conditions
shall be applicable namely:--

(a) any shares held or power exercisable by that other company in a fiduciary capacity shall
be treated as not held or exercisable by it.

(b) subject to the provisions of clauses (c) and (d) any shares held or power exercisable shall
be deemed to be the shares held or power exercisable by that other company, if--

(i) the shares are held or the power is exercisable by a person as a nominee and on
behalf of that other company, but this clause shall not apply to the holding of such
shares or to the exercise of such powers by such person where that other company is
concerned in a fiduciary capacity.

(ii) the shares are held or the power is exercisable by a subsidiary of that other
company or by a nominee of such subsidiary, but this clause shall not apply to the
holding of such shares or to the exercise of such powers by the subsidiary or by its
nominee where the subsidiary is concerned in a fiduciary capacity;

(c) any shares held or power exercisable by any person by virtue of the provisions of any
debentures of the first-mentioned company or of a trust deed for securing any issue of such
debentures shall disregarded;

(d) if any shares are held or power is exercisable, not being held of exercisable as mentioned
in clause (c),--

(i) by that other company or by its subsidiary or by a nominee of that other or its
subsidiary as the case may be, and

(ii) the ordinary business of that other company or as the case may be of its subsidiary
includes the lending of money and such shares are held or the power is exercisable by
way of security of the loan [then such power shall not be treated as being held or
exercisable by such company or its nominee.]

(5) For the purposes of this Act' a company shall be deemed to be the holding company of
another if, and only if, that other is its subsidiary.

3. Jurisdiction of the Court.

(1) The Court having jurisdiction under this Act shall be High Court Division;

Provided that the Government may be notification in the Official Gazette and subject to such
restrictions and conditions as it thinks fit, empower any District Court to exercise all or any
of the jurisdiction by this Act conferred upon the Court, and in that case such District Court
shall as regards the jurisdiction so conferred, be the Court in respect of all companies having
their registered office in the district.

Explanation.--For the purposes to wind up companies the expression "registered office"

means the place where the registered office of the company, during the six months
immediately preceding the presentation of the petition of winding up was situated.
(2) Nothing in this section shall invalidate a proceeding by reason of its being taken in a
wrong Court

PART-II
CONSTITUTION AND INCORPORATION

4. Prohibition of partnership exceeding certain number:

(1) Nor company, association or partnership consisting of more than ten persons shall be
formed or a the purpose of carrying on the business of banking unless it is registered as a
company under this Act or is formed by or under any other Act of Parliament.

(2) No company association or partnership consisting of more than twenty persons shall be
formed for the purpose ofcarrying on any other business that has for its objects the
acquisition of gain by the company, association or partnership, or by the individual members
thereof unless it is registered as a company under this Act or is formed by or under any other
Act of Parliament.

(3) This section shall not apply to joint family carrying on joint family business or trade.
Provided that for the purposes of this section, in computing the number of persons of a
partnership, association or company comprising two or more joint families, minor members
of such families shall be excluded.

(4) Every member of a company, association or partnership carrying on business in

contravention of this section shall be personally liable for all liabilities incurred in such
business.

(5) Any person who is a member of a company, association or partnership formed in

contravention of this section shall be punishable with fine not exceeding five thousand taka.

Memorandum of Association

5. Mode of forming incorporated company.

Any seven or more persons or, where the company to be formed will be a private company,
any two or more persons associated for any lawful purpose may, be subscribing their names
to a memorandum of association and otherwise with the requirements of this Act in respect or
registration form an incorporated company, with or without limited liability, that is to say,
either--

(a) a company limited by shares, that is to say, a company having the liability of its member
limited by the memorandum to the amount, if any, unpaid on the shares respectively held by
them; or

(b) a company limited by guarantee, that is to say, a company having the liability of its
members limited by the memorandum to such amount as the members may respectively
thereby undertake to contribute to the assets of the assets of the company on the event of its
being wound up; or

(c) an unlimited company, that is to say, a company having no limit on the liability of its
members.

6. Memorandum of company limited by sharees.

In the case of a company limited by shares.-

(a) the memorandum shall state.--

(i) the name of the company, with "limited" as the last word in its name;

(ii) The address of the registered office;

(iii) the objects of the company, and, except in the case of trading companies, the
territories to which they extend;

(iv) that the liability of the members is limited;

(v) the amount of share capital with which the company proposes to be registered, and
the divisions thereof into shares of a fixed amount;

(b) each subscriber of the memorandum shall take at least one share;

(c) each subscriber shall write opposite to his name the number of shares he takes.

7. Memorandum of company limited by guarantee.

In the case of a company limited by guarantee--

(a) the memorandum shall state--

(i) the name of the company, with "limited" as the last word in its name.

(ii) the address of the registered office;

(iii) the objects of the company, and, except in the case of trading companies, the
territories to which they extend;

(iv) that the liability of the members is limited;

(v) that each member undertakes to contribute to the assets of the company in the
event of its being wound up while he is a member or within one year afterwards, for
payment of the debts and liabilities of the company contracted before he ceases to be
a member, ad of the charges and expenses of winding up, and for adjustment of the
right of the contributories among themselves, such amount as may be required, not
exceeding a specified amount;

(b) if the company has a share capital--

(i) the memorandum shall also state the amount of share capital with which the
company proposes to be registered and the division thereof into shares of a fixed
amount;

(ii) each subscriber of the memorandum shall take at least one share;

(iii) each subscriber shall write opposite to his name the number of shares he takes.
8. Memorandum of unlimited company.

In the case of an unlimited company

(a) the memorandum shall state-

(i) the name of the company;

(ii) the address of the registered office of the company;

(iii) the objects of the company and, except in the case of trading companies, the
territories to which they extend.

(b) if the company has a share capital-

 (i) each subscriber of the memorandum shall take at least one share;

(ii) each subscriber shall write opposite to his name the number of shares he takes.

9. Printing and signature of memorandum.

The memorandum of every company shall--

(a) be printed;

(b) be divided into paragraphs numbered consecutively; and

(c) be signed by each subscriber, who shall add his address and description in the presence of
at least two witnesses who shall attest the signature.

10. Restriction on alteration of memorandum.

(1) A company shall not alter the conditions on continued in its memorandum except
provisions is made in the Act.

(2) Only those provisions which by any other specific provision contained in this Act, are
required to be stated in the memorandum of the company concerned shall be deemed to be
the conditions contained in its memorandum.

(3) Other provisions contained in the memorandum, including those relating to the
appointment of director, managing agent or manager may be altered in the same manner as
the articles of the company, but if there is any express provision in this Act permitting the
alteration of such provisions in any other manner, they may also be altered in such other
manner.

(4) All reference to the articles of a company in this Act shall be construed as including
references to the other provisions contained in its memorandum as referred to in sub-section
(3).

11. Name of company and change of name.

(1) A company shall not be registered by a name identical with that by which a company in
existence is already registered, or so nearly resembling the name that there is likelihood of
using the name to deceive, except where the company in existence is in the course of being
dissolved and signifies its written consent in such manner as the Registrar requires.

(2) If a company, through inadvertence or otherwise, is, without the consent referred to in
sub-section (1), registered by a name identical with that by which a company in existence is
previously is registered, or so nearly resembling the name that there is likelihood of using the
name to deceive, the first mentioned company shall, on he direction of the Registrar, change
its name within a period of one hundred and twenty days.

(3) If a company makes a default in complying with the direction made under sub-section (2),
the company shall be punishable with fine of five hundred take for every day during which
the default continues and every officer who is in default shall be punishable with fine of one
hundred taka for every day during which the default continues.

(4) Except with the previous consent in writing of the Government, no company shall be
registered by a name which is declared by the Government by notification in the official
Gazette, as undesirable:

Provided that nothing in this sub-section shall apply to companies registered before the
commencement of this Act.

(5) No company shall be registered by a name containing in any form the name or any
abbreviation of the name of the United Nations or of any subsidiary body set up by the
United Nations or of the World Health Organisation unless the company has obtained the
previous authorisation in writing of the Secretary General in the case of the United Nations or
the subsidiary body as aforesaid or of the Director General of the World Health Organisation
in the case of that Organisation.

(6) Any company may, by special resolution and subject to the approval of the Registrar
signified in writing, change it name.

(7) Were a company changes its name, the Registrar shall enter the new name on the register
in place of the former name, and shall issued a certificate of incorporation in its new name to
meet the circumstances of the case and on the issue of such a certificate, the change of name
shall be complete.

(8) The change of name shall not change any rights or obligations of the company, or render
defective any legal proceedings by or against the company; and any legal proceedings that
might have been continued or commenced against it by its former name may be continued or
commenced against it by its new name.

(9) A company may, on payment of such fee as may be prescribed, apply to the Registrar for
information whether any company is registered or proposed to be registered by a name
specified in the application and the Registrar shall furnish the required information within a
period of thirty days from the date of receipt of the application.

12. Alternation of memorandum.

(1) Subject to the provisions of this Act, a company may, by special resolution, alter the
provisions of its memorandum with respect to the objects of the company, so far as may be
required to enable it--

(a) to carry on its business more economically or more efficiently; or

(b) to attain its main purpose by new or improved means; or

(c) to enlarge or change the local area of its operations; or

(d) to carry on some business which, under the existing circumstances. may
conveniently or advantageously be combined with the business of the company; or

(e) to restrict or abandon any of the objects specified in the memorandum; or

(f) to sell or dispose of the whole or any part of the undertaking of the company; or

(g) to amalgamate with any other company or body of persons.

(2) The alteration shall not take effect until and except in so far it is confirmed by the Court
on petition.

(3) Before confirming the alteration, the Court must be satisfied--

(a) that sufficient notice has been given to every holder of debentures of the company,
and to any person or class of person whose interest will, in the option of the Court, be
affected by the alteration; and

(b) that, with respect to every creditor who in the opinion of the Court is entitled to
object, and who signifies his objections in manner directed by the Court, either his
consent to the alteration has been obtained or his debt or claim has been discharged or
has been determined, or has been secured to the satisfaction of the Court;

Provided that the Court may, in the cases of any person or class, for special reasons, dispense
with the notice required by this section.

13. Power of Court when confirming alteration.

The Court may make an order confirming the alteration either wholly or in part, and on such
terms and conditions as it thinks fit, and may make such order as to costs as it thinks proper.

14. Exercises of discretion by Court.

The Court shall, in exercising its discretion under sections 12 and 13, have regard to the class
of them, as well as to the rights and interests of the creditors, and may if it thinks fit, adjourn
the proceedings in order that an arrangement may be made to the satisfaction of the Court for
the purchase of the interests of dissenting members; and may give such directions and make
such orders as it may think expedient for facilitating or carrying into effect any such
arrangement;

Provided that no part of the share capital of the company may be expended in any such
purchase.

15. Procedure on confirmation of the alternation.

A certified copy of the order confirming the alternation, together with a printed copy of the
memorandum as altered, shall be filed by the company with the Registrar within ninety days
from the date of the order or within such time as may be extended by the court, and he
Registrar shall register the same. and shall certify the registration under his hand, and the
certificate shall be conclusive evidence that all the requirements of this Act, with respect to
the alteration and the confirmation thereof, have been complied with, and hence forth the
memorandum so altered shall be the memorandum of the company.

16. Effect of failure to register within extended time.--No such alteration shall have any
operation until registration thereof has been duly effected in accordance with the provisions
of section 15, and if such registration is not effected within the period specified in that section
such alteration and the order of the Court confirming the alteration, and all proceedings
connected there with shall, at the expiration of the period specified under that section become
absolutely null and void :

Provided that the Court may, on sufficient cause shown, revive the order on application made
within a further period of thirty days after the said period.

Articles of Association,

17. Registration of articles.

(1) A company limited by guarantee and an unlimited company shall, and a company limited
by shares may. have an articles of association herein provision shall be made for regulating
the affairs of the company; and the article shall be signed by the subscribers of the
memorandum and be registered together with the memorandum.

(2) Articles of association may adopt all or any of the regulations contained in Schedule I,
and shall in any event be deemed to contain regulations identical with or to the same effect as
regulation 56, 66, 71, 78, 79, 80, 81, 82, 95, 97, 105, 108, 112, 113, 114, 115, and 116
contained in that Schedule :
Provided that regulations 78, 79, 82, 81, and 82 shall not be deemed to be included in the
articles of any private company except a private company which is the subsidiary company of
a public company :

Provided further that regulation, 108 shall be deemed to require that a statement of the
reasons why of the whole amount of any item of expenditure which may in fairness be
distributed over several years, only a portion thereof is charged against the income of the
year, shall be shown in the profit and, loss account, unless the company in general meeting
shall determine
otherwise.

(3) In the case of an unlimited company or a company limited by guarantee, the articles, if the
company has a share capital, shall state the amount of share capital with which the company
proposes to be registered.

(4) In the case of an unlimited company or a company limited by guarantee, if the company
has not a share capital, the articles shall state the number of members with which the
company proposes to the registered; and on the basis of such number the Registrar shall
determine the fees payable on registration.

18. Application of Schedule I.

In the case of a company limited by shares and registered after the commencement of this
Act, if articles not registered, or, if articles are registered, in so far as the articles do not
exclude or modify the regulations in Schedule I, those regulations shall, so far as applicable
be the regulations of the company in the same manner and to the same extent as if they were
contained in the duly registered articles.

19. Form and signature of articles.

Articles shall

(a) be printed;

(b) be divided into paragraphs numbered consecutively;

(c) be signed by each subscriber of the memorandum, who shall add his address and
description in the presence of at least two witness who shall attest the signature.

20. Alteration of articles by special resolution.

Subject to the provisions of this Act and to the conditions contained in its memorandum, a
company may by special resolution alter, exclude from or add to its articles: and any
alteration, exclusion or addition so made shall be as valid as if originally contained in the
articles, and be subject in like manner to alteration, exclusion or addition by special
resolution.

21. Effect of alteration in memorandum or articles.

Notwithstanding any thing in the memorandum or articles of a company,, no member of the

company shall be bound by an alteration made in the memorandum or articles after the due
on which he becomes, member, if and so far as the alteration requires him to take or
subscribe for more shares than the number held by him at the date on which the alteration is
made, or in any way increases his liability is at that date to contribute to the share capital of,
or otherwise to pay money to the company.

General Provisions

22. Effect of memorandum and articles.

(1) The memorandum and articles shall when registered bind the company and the members
hereof to the same extent as if they respectively had been signed by each member and
contained a convenient on the part of each member his heirs and leal representatives to
observe all the provisions of the memorandum and of the articles subject to the provisions of
this Act.

(2) All money payable by any member to the company under the memorandum or articles
shall be a debt one from him to the company.

23. Registration of memorandum and articles.

(1) The memorandum and articles if any shall be field with the Registrar who if satisfied that
the requirements of this Act have been complied with shall retain and register them within
thirty days from the date of their receipt and in the event of refusal he shall communicate the
grounds within ten days after that period to the company.

(2) An person on being aggrieved by a refusal of the Registrar under sub-section (1) may
make an appeal to the Government within thirty days of the receipt of the refusal order.

(3) The petition of appeal shall be accompanied by a treasury challan showing of a fee of two
hundred fifty taka to be credited under the head of account specified in this behalf.
(4) The decision of the Government in an appeal under this section shall be final.

24. Effect of registration.

(1) On the registration of the memorandum of a company the Registrar shall certify under his
hand that the company is incorporated and in the case of a limited company that the company
is limited.

(2) From the date of incorporation mentioned in the certificate of incorporation the
subscribers of the memorandum together with such other persons as may from time to time
become members of the company shall be a body corporate by the name contained in the
memorandum capable forthwith of exercising all the functions of an incorporated company
and having perpetual succession and a common seal but with such liability on the part of the
members to contribute to the assets of the company in the event of its being wound up as is
mentioned in this Act.

25. Conclusiveness of certificate of incorporation.

(1) A certificate of incorporation given by the Registrar in respect of any association shall be
conclusive evidence that all the requirements of this Act in respect of registration and of
matters precedent and incidental thereto have been complied with and that the association is a
company authorised to the registered and duly registered under this Act.

(2) A declaration by an advocate entitled to appear before the High Court Division who is
engaged in the formation of a company or by a person named in the articles as a director
manager or secretary of the company of compliance with all or any of the said requirements
shall be filed with the Registrar and the Registrar may accept such a declaration as sufficient
evidence of compliance.

26. Copies of memorandam and articles to be given to members.

(1) Every member of a company may request for a copy of the memorandum, and also for a
copy of the articles, if any, and if such request is made in writing alongwith a fee of taka fifty
or such less fee as may fixed by the company, the company shall, within fourteen days from
the date of such request, send the copy to that member.

(2) If a company makes default in complying with the requirements of this section, it shall be
liable for each offence to a fine not exceeding two hundred taka and every officer of the
company who is knowingly and willfully in default shall be liable to like penalty.

27. Alteration of memorandum of articles to be noted in every copy.

(1) Where an alteration is made in the memorandum or articles of a company, every copy of
the memorandum or articles issued after the date of the date of the alteration shall be in
accordance with the alteration.

(2) If, where any such alteration has been made the company at any time after the date of the
alteration, issues any copies of the memorandum or article which are not in accordance with
the alteration, it shall be liable to a fine not exceeding one hundred taka for each copy so
issued, and every officer of the company who is knowingly and willfully in default shall also
bearable to a like penalty.

Association not for profit

28. Power to dispense with Limited In name of charitable and other companies.

(1) Where it is proved to the satisfaction of the Government that an association capable of
being formed as a limited company has been or in about to be formed for promoting
commerce, art, science, religion, charity, or any other useful object, and appllies or intends to
apply its profits, if any or other income in promoting its objects and to prohibit the payment
of any dividence to its membners the Government may, by licence with approval of one of its
Secretaries, direct that the association be registered as a company with limited liability,
without the addition of the word "Limited" to its name, and the association may be registered
accordingly.

(2) A licence by the Government under this section may be granted on such conditions and
subject to such restrictions as the Government thinks fit and those conditions and restrictions
shall be binding on the association and shallif the Government so directs be inserted in the
memorandum and articles or in one of those documents.

(3) The association shall on registration enjoy all the privuleges of limited companies and be
subject to all their obligations except those of using the word "Limited" as any part of its
name and of publishing its name or of sending lists of members to the Registrar.

(4) A licence under this section may at any time be cancelled by the Government and upon
cancellation the Registrar shall enter the word "Limited" at the end of the name of the
association upon the register and the association shall cease to enjoy the exemptions and
privileges granted by this section:

Provided that before a licence is sop cancelled the Government shall give to the association a
notice in writing of its intention and the grounds their of and shall afford the association an
opportunity of submitting a representation in opposition to the cancellation.

Companies Limited by Guarantee

29. Provision as to companies limited by guarantee.

(1) In the case of company limited by guarantee and not having a share capital and registered
after the commencement of this Act every provision in the memorandum or articles or in any
resolution of the company purporting to give any person a right to participate in the divisible
profits of the company otherwise than as a member shall be void.

(2) For the purpose of this section and the other provisions of this Act. relating to the
memorandum of a company limited by guarantee every provision in the memorandum or
articles, or in any resolution, of any company limited by guarantee and registered after the
commencement of this Act. purporting to divide the undertaking of thecompany into shares
or interests shall be treated as a provision for as share capital notwithstanding that the
nominal amount or number of the shares or interests is not specified thereby.

PART III

SHARE CAPITAL, REGISTRATION OF UNLIMITED COMPANY AS LIMITED

AND UNLIMITED LIABILITY OF DIRECTORS

Distribution of Share Capital

30. Nature of shares.

(1) The shares or other interests of any member a company shall be deemed to be movable
property and shall be transferable in manner provided by the articles of the company.

(2) Each share in a company having a share capital shall be distinguished by the appropriate
number.

31. Certificate of shares or stock.

A certificate under the common seal of the company specifying any shares or stock held by
any member shall be prima facie evidence of the title of the member to the shares or stock
therein specified.

32. Definition of Member.

(1) Every subscriber of the memorandum of company shall be deemed to have agreed to
become a member of the company and on its registration shall be entered as a member in its
register of members.

(2) Every other person who agrees to become a member of a company, and whose name is
entered in its register of members shall be a member of the company.
33. Membership of holding company

(1) Except in the cases mentioned in this section a body corporate cannot be a member of a
company which is its holding company and any allotment or transfer or shares in a company
to its subsidiary shall be void.

(2) Nothing in this section shall apply; namely--

(a) Where the subsidiary is the legal representative of a deceased member of the holding
company; or

(b) Where the subsidiary is concerned as trustee unless the holding company or a subsidiary
thereof is beneficially interested under the trust and is not so interested only by way of
security for the purposes of a transaction entered into by it in the ordinary course of business
which includes the lending of money.

(3) This section shall not prevent a subsidiary from continuing to be a member of its holding
company if it was a member thereof either at the commencement of this Act or before
becoming a subsidiary of the holding company; but except in the cases referred to in sub-
section (2), the subsidiary shall have no right to vote at meetings of the holding company or
of any class of members thereof.

(4) Subject of sub-section (2) sub-sections (1) and (3) shall apply in relation to a nominee for
a body corporate which is a subsidiary as if reference in the said sub-sections (1) and (3) to
such a body corporate and a subsidiary included reference to a nominee for it.

(5) In relation to a holding company which is either a company limited by guarantee or an

unlimited company the reference in this section to shares shall, whether or not the company
has a share capital be construed as including a reference to the interest of its members as such
whatever be the form of that interest.

34. Register of member

(1) Every company shall keep in one on or more books of register of its members, and enter
therein the following particulars:--

(i) the name and addresses, and the occupations, if any of the members;

(ii) in the case of a company having a share capital, a statement of the shares held by
each member, distinguishing each share by its number, and of the amount paid or
agreed to be considered as paid on the shares of each member;

(iii) the date at which each person was entered in the register as a member;
 (iv) the date at which any person ceased to be a member.

(2) If a company makes default in complying with the requirements of this section. It shall be
liable to as fine not exceeding one hundred taka for everyday during which the default
continues and every officer of the company who knowingly and willfully authorise or permits
the default shall also be liable to a like penalty.

35. Index of members of company

(1) Every company having more than fifty member shall, unless the register of members is in
such a form as to constitute in itself an index, keep an index of the names of the members of
the company and shall within fourteen days after the date on which any alteration is made in
the register members make any necessary alteration in the index.

(2) The index which may be in the form of a card index shall in respect of each member
contain a sufficient indication to enable the account of that member to be readily found.

(3) If default is made in complying with the section the company shall be liable to a fine not
exceeding five hundred taka and every officer of the company who is knowingly and
willfully in default shall be liable to a like penalty.

36. Annual list of members and summary

(1) Every company having a share capital shall within eighteen months from its incorporation
and thereafter once at least in every year make a list of all persons who on the day of the first
or only ordinary general meeting in the year are members of the company, and of all persons
who have ceased to be members since the date of the last return or in the case of the first
return of the incorporation of the company.

(2) The following shall be stated in the list namely:--

(a) the names, addresses, nationality and occupation of all past and [present members;

(b) the number of shares held by each of the existing members at the date of return specifying
the shares transferred since the date of last return or, in the case of first return, since the date
of incorporation, by persons who are still members and by persons who have ceased to be
members respectively and also the dates of registration of such transfer; and

(c) a summary distinguishing between shares issued for cash and shares issued as fully or
partly paid up otherwise than in cash and specifying the following:-

(1) the amount of the share capital of the company, and the number of the shares into
which it is divided;
 (2) the number of shares taken from the commencement of the company up to the date
of the return;

(3) the amount called up on each share;

(4) the total amount of calls received;

(5) the total amount of calls unpaid;

(6) the total amount of the sums, if any, paid by way of commission in respect of any
share or debentures, or allowed by way of discount, in respect of any shares or
debentures, since the date of the last return or so much thereof as has not been written
of at the date of the return.

(7) the total number of shares forfeited;

(8) the total amount of shares or stock for which share warrants are outstanding at the
date of the last return;

(9) the total amount of share-warrants issued and surrendered respectively since the
date of the last return;

(10) the latest date on which the general meeting should have been held and whether
it was actually so held;

(11) the number of shares or amount of stock comprised in each sharewarrant;

(12) the names and addresses of the persons who at the date of terurn are the directors
of the company and of the persons, if any, who at the said date are the managers
managing agents or auditors of the company, and the changes in the personnel of the
directors, managers managing agents since the last return together with the dates on
which the took place; and

(13) the total amount of debt due from the company in respect of all mortgages and
charges which are required to be registered with the Registrar under this Act.

(3) The above list and summary shall be contained in a separate part of the register of
members, and shall be completed within twenty-one days after the day of the first or only
ordinary general meeting in the year; and the company shall, within that period file with the
Registrar a copy signed by two directors, including the managing director, or where there is
no managing director, by a director, and manging agent or manager or secretary of the
company together with a certificate from such persons that the list and summary state the
facts as they stood on the day aforesaid.
(4) A private company shall send with the annual return required by subsection (1) a
certificate signed by a director or other officer of the company that the company has not,
since the date of the last return or in the case of a first return since the date of the
incorporation of the company, issued any invitation to the public to subscribe for any shares
or debentures of the company, and where the annual return discloses the fact that the number
of members of the company exceeds fifty, also a certificate so signed that the excess consists
wholly of persons who under sub-clause (ii) of clause (g) of sub-section (1) of section 2 are
not be included in reckoning the number o fifty.

(5) If a company makes default in complying with the requirements of this section, it shall be
liable to a fine not exceeding two hundred taka for every day during which the default
continues, and every officer of the company who knowingly and willfully authorises or
permits the default shall be liable to the like penalty.

37. Trust not to be entered on register

No notice of any trust, expressed, implied or constructive, shall be entered on the register, or
be receivable by the Registrar.

38. Transfer of shares

(1) An application for the registration of the transfer of shares in a company may be made
either by the transferer or the transfere, provided where such application is made by the
transferer no registration shall in case of party paid shares be effected unless the company
gives motive of the application to the transferee and subject to the provisions of sub-section
(7) the company shall, unless objection is made by the transferee two weeks from the date of
receipt of the notice, enter in its register of members the name of the transferee in the same
manner and subject to the same conditions as if the application for registration was made by
the transferee.

(2) For the purpose of sub-section (1), notice to the transferee shall be deemed to have been
duly given if despatched by prepaid post to the transferee at the address given in the
instrument of transfer and shall be deemed to ave been delivered in the ordinary course of
post.

(3) It shall not be lawful for the company to register a transfer of share in or debentures of the
company unless the proper instrument of transfer duly stamped and executed by the
transferor and the transferee has been delivered to the company along with script:

Provided that, where it is proved to the satisfaction of the directors of the company that an
instrument of transfer signed by the transferor and transferee has been lost, the company may,
if the directors think fit, on an application in writing made by the transferee and bearing the
stamp required by an instrument of transferor register the transfer on such terms as to
indemnity as the directors may think fit.
(4) If a company refuses to register the transfer of any shares or debentures the company,
shall, within one month from the date on which the instrument of transfer was lodged with
the company, send to the transferee and the transferor notice of the refusal.

(5) If default is made in complying with sub-section (4) of this section, the company shall be
liable to a fine not exceeding one hundred taka for everyday during which the default
continues and every director, manager secretary other officer who is knowing by a party to
the default shall, be liable to a like penalty.

(6) Nothing in sub-section (3) shall prejudice any power of the company to register as
shareholder or debenture holder any person to whom the right to any shares in or debentures
of the company has been transmitted by operation of law.

(7) Nothing in this section shall prejudice any power of the company under its articles to
refuse to register the transfer of any shares.

39. Certification of transfer.

(1) The certification by a company of any instrument of transfer of shares in, or debentures
of, the company, shall be taken as a representation by the company to any person acting on
the faith of the certification that there have been produced to the company such documents as
on the face of them show a prime facie title to the shares or debentures in the transfer named
in the instrument of transfer, but not as a representation that transferor has complete title to
the shares or debentures.

(2) Where any person acts on the faith of an erroneous certification made by a company
negligently, the company shall be under the same liability to him as if the certification has
been made fraudulently.

(3) For the purposes of this section-

(a) an instrument of transfer shall be deemed to have certificated if it bears the words
'certificate lodged" or words to the like effect;

(b) the certification of an instrument of transfer shall be deemed to be made by a company, if-

(i) the person issuing the certificated instrument is a person authorise to issue such
instruments of transfer on the company's behalf; and

(ii) the certification is signed by any officer or servant of the company or any other
person authorised to certificate transfers on the company's behalf, or if a body
corporate has been so authorised by any officer or servant of that body corporate;
(c) a certification shall be deemed to be signed by any person if it purports to be authenticated
by his signature, unless it is shown that the signature was placed there neither by himself nor
by any person authorised to use the signature for the purpose of certificating transfers on the
company's behalf.

40. Transfer by legal representative.

A transfer of the share or other interest of a decease member of a company made by his legal
representative shall, although the legal representative is not himself a member, be as valid, as
if he had been a member at the time of the execution of the instrument of transfer.

41. Inspection of register of members.

(1) The register of members commencing from the date of the registration of the company
and where section 35 applies also the index of members shall be kept at the registered office
of the company, and such register and index shall, except when closed under the provisions
of this Act shall during business hours subject to such reasonable restrictions as the company
in general meeting impose, so that not less than two hours in each day be allowed for
inspection, be kept open to the inspection of any member free of cost and to the inspection of
any other person on payment of one hundred taka or such less sum as the company may
prescribe for each inspection, and any such member or other person may make extract
therefore.

(2) Any member or other person may require a copy of the register or of any part thereof or
of the list and summary required by this Act or any part thereof, on payment of five taka for
every hundred words or fractional part thereof required to be copied and the company shall
cause any copy so required by any person to be sent to that person within a period of ten days
commencing on the day next after the day on which the requirement is received by the
company.

Explanation:

For the purpose of this sub-section in reckoning the ten working days, the non-working days
and days on which the transfer books of the company remain closed shall be excluded.

(3) If any inspection required under this section is refused or if any copy required under this
section is not sent within the proper period the company and every officer of the company
who is in default shall be liable in respect of each offence to a fine not exceeding one hundred
taka and to a further fine not exceeding one hundred taka for everyday during which the
refusal or default continues, and the Court may by an order compel an immediate inspection
of the register and index or direct that copies required shall be sent to the persons requiring
them.
42. Power to close register.

A company may on giving seven day's previous notice by advertisement in some newspaper
circulating in the district in which the registered office of the company is situated close the
register of members for any time or times not exceeding in the whole forty-five days in each
year but bot exceeding thirty days at a time.

43. Power of Court to rectify register

(1) If
(a) the name of any person is without sufficient cause entered in or omitted from the
register of members of a company; or

(b) default is made or unnecessary delay takes place in entering on the register the fact
of any person having become, or ceased to be, a member,
the person aggrieved, or any member of the company, or the company, may apply to the
Court for rectification of the register.

(2) The Court may either refuse the application, or may order rectification of the register and
payment by the company of any damages sustained by any party aggrieved and may also
make such order as costs as it may consider proper.

(3) On any application under this section the Court may decide any question relating to the
title of any person who is a party to the application to have his name entered in or omitted
from the register whether the question arises between members or alleged members or
between members or alleged members on the one hand and the company on the other hand
and generally may decide any question necessary or expedient to be decided for rectification
of the register and may also decide any issue involving any question of law.

44. Notice to Registerar for rectification of register.

In the case of a company required by this Act to file a list of its members with the Register,
the Court when making an order for rectification of the register shall by its order direct notice
of the rectification to be filed with the Registrar within from the date of completion of the
order.

45. Register to be evidence.

The register of members shall be primafacie evidence of any matter by this Act directed
authorised to be inserted therein.
46. Issue of share warrants to bearer

(1) A company limited by shares if so authorised by its articles may with respect to any fully
paid-up shares or to stock issue under its common seal a warrant stating that the bearer of the
warrant is entitled to the shares on stock therein specified and may provide by coupons or
otherwise for the payment of the future dividends on the shares or stock included in the
warrant in this Act termed as share-warrant.

(2) Nothing in this section shall apply to a private company.

47. Effect of sharewarrant.

A share warrant shall entitle the bearer thereof to the shares or stock therein specified and the
shares or stock may be transferred by delivery of the warrant.

48. Registration of name of bearer of share warrant.

The bearer of a sharewarrant shall subject to the articles of the company, be entitled, on
surrendering it for cancellation, to have his name entered as a member in the register of
members; and the company shall be responsible for any loss incurre by any person by reason
of the company entering in its register the name of a bearer of a share- warrant in respect of
the share of stock therin specified without the warrant being surrendered and cancelled.

49. Position of bearer of Share-warrant.

The bearer of a share warrant may, if the articles of the company so provide be deemed to be
a member of the company within the meaning of this Act either to the full extent or for any
purpose defined in the articles except that he shall not be qualified in respect of the shares or
stock specified in the warrant for being a director or manager of the company in cases where
such a qualification is required by the articles.

50. Entries in register when share-warrant issued.

(1) On the issue of share-warrant, the company shall strike out of its register of members the
name of the member then entered therein as holding the shares or stock specified in the
warrant, as if he had ceased to be a member and shall enter in the Register the following
particulars namely:-

(i) the fact of the issue of the warrant;

(ii) a statement of the shares or stock included in the warrant, distinguishing each
share by its number; and
 (iii) the date of issue of the warrant.

(2) If a company makes default in complying with the requirements of this section it shall be
liable to a fine not exceeding two hundred taka for every day during which the default
continues and every officer of the company who knowingly and willfully continues or
permits the default shall also be liable to a like penalty.

51. Surrender of Share warrant.

Until the warrant is surrendered, the above particulars shall be deemed to be the particulars
required by this Act to be entered in the register of members; and on the surrender the date of
the surrender shall be entered as if it were the date at
which a person ceased to be a member.

52. Power of company to arrange for different amounts being paid on shares

A company, if so authorised by its articles may do any one or more of the following things,
namely--

(i) make arrangements on the issue of shares for a difference between he shareholders
in the amounts and times of payment of calls on their shares;

(ii) accept from any member who assents thereto the whole or a part of the amount
remaining unpaid on any shares held by him although no part of that amount has been
called up;

(iii) pay dividend in proportion to the amount paid-up on each share where a larger
amount is paid-up on some shares than on others.

53. Power of company limited by shares to alter its share capital.

(1) A company limited by shares if so authorised by its articles may alter the conditions of its
memorandum, as follows that is to say it may--

(a) increase its share capital by the issue of new shares of such amount as it thinks
expedient;

(b) consolidate and divide all or any of its share capital into shares of larger amount
than its existing shares;

(c) convert all or any of its paid-up shares into stock and reconvert that stock into
paid-up shares of any denomination.
 (d) sub-divided ist shares, or any of them, into shares of smaller amount than is fixed
by the memorandum, so that in the sub-division the proportion between he amount
paid and the amount, if any, unpaid on each reduced share shall be the same as it was
in the case of the share from which the reduced share is derived;

(e) cancel shares which, at the date of the passing of the resolution in that behalf, have
not been taken or agreed to be taken by any person, and diminish the amount of its
share capital by the amount of the share so cancelled.

(2) the powers conferred by this section can only be exercised by the company in its general
meeting.

(3) A cancellation of shares in pursuance of this section shall not be deemed to be a reduction
of share capital within the meaning of the other provisions of the Act.

(4) The company shall file with the Registrar notice of the exercise of any power referred to
tin clause (d) or clause (e) of sub-section (1) within fifteen days from the exercise thereof.

54. Notice to Registrar for consolidation of share a capital, conversion of shares into
stock etc.

(1) Where a company having a share capital has consolidated and divided its share capital
into shares of larger amount than its existing shares or converted any of the shares into stock
or re-converted stock into shares, it shall within fifteen days of the consolidation and division,
conversion or re-conversion, file notice with the Registrar of the same, specifying the share
consolidated and divided, or converted or the stock re-coverted.

(2) If a company makes default in complying with the requirements of this section, it shall be
liable to a fine not exceeding two hundred taka for everyday during which the default
continues, and every officer of the company who knowingly and willful authorises or permits
the default shall also be liable to the like penalty.

55. Effect of conversion of shares into stock.

Where a company having a share capital has converted any of its shares into stock and filed
notice of the conversion with the Register all the provisions of this Act which are applicable
to shares only shall cease as to so much of the share capital as is converted into stock; and the
register of members of the company, and the list of members to be filed with the Registrar
shall show the amount of stock held by each member instead of the amount of shares and the
particulars relating to shares hereinbefore required by this Act.

56. Notice of increase of share capital or of members.

(1) Where a company having a share capital, whether its shares have or have not been
converted into stock, has increased its share capital, beyond the registered capital, and where
a company not having a share capital has increased the number of its members beyond the
registered number, it shall file with the Registrar, in the case of an increase of share capital,
within fifteen days after the passing of the resolution authorising the increase and in the case
of an increase of members within fifteen days after the increase was resolved on or took
place, notice of the increase of capital or members, and the Registrar shall record the
increase.

(2) The notice under sub section (1) shall include particulars of the classes of shares, affected
and the conditions, if any, subject to which the new shares are to be issued.

(3) If a company makes a default in complying with the requirements of this section, it shall
be liable to a fine not exceeding two hundred taka for every day 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.

57. Application of premiums received on issue of shares.

(1) Where a company issues shares at a premium, whether for cash or otherwise, a sum equal
to the aggregate amount or value of the premiums on those shares, shall be transferred to an
account, to be called "the share premium account" and the provisions of this Act relating to
the reduction of the share capital of a company shall, except as provided in this section, apply
as if the share premium account were paid-up share capital of the company.

(2) The share premium account may be applied by the company--

(a) in paying up unissued shares of the company to be issued to member of the

company as fully paid bonus shares;

(b) in writing of the preliminary expenses of the company,

(c) in writing off the expenses of, or the commission paid or discount allowed, on any
issue of shares or debentures of the company; or

(d) in providing for the premium payable on the redemption of any redeemable
preference shares or of any debentures of the company.

(3) Where is company has, before the commincement of this Act issued any shares at a
premium this section shall apply as if the shares had been issued after the commencement of
this Act:

Provided that any part of the premium which has been so applied that it does not at the
commencement of this Act form an identificable part of the company's reserves within the
meaning of Schedule XI shall be disregarded in determining the sum to be included in the
share premium account.

Reduction of Share Capital

58. Restriction on purchase by company or loans by Company for purchase of its own
shares

(1) No company limited by shares shall have power to buy its own shares or the shares of a
public company of which it is a subsidiary company, unless the consequent reduction of
capital is effected and sanctioned in the manner provided by sections 59 to 70.

(2) No company limited by shares other than private company or a subsidiary company of a
public company, shall give whether directly or indirectly, and whether by means of a loan
guarantee the provision of security or otherwise any financial assistance for the purpose of or
in connection with a purchase made or to be made by any person of any shares in the
company:

Provided that nothing in this section shall, where the lending of money is part of the ordinary
business of a company, be taken to prohibit the lending of money by the company in the
ordinary course of its business.

(3) If a company acts in contravention of this section, the company, are every officer of the
company who is knowingly and willfully in default shall be liable to a fine not exceeding five
thousand taka.

(4) Nothing in this section shall affect the right of a company to redeem any shares issued
under section 154.

59. Reduction of share capital.

(1) Subject to confirmation by the Court, a company limited by shares, if so authorised by its
articles, may by special resolution reduce its share capital in any way, and in particular the
company may, as part of this general power--

(a) extinguish or reduce the liability on any of its shares in respect of share capital not
paid-up;

(b) either with or without extinguishing or reducing liability on any of its shares,
cancel any paid-up share capital which is lost or presented by available assets;

(c) either with or without extinguishing or reducing liability on any of its shares, pay
off any paid-up share capital which is in excess of the wants of the company;
 (d) so far as is necessary, alter its memorandum by reducing the amount of its share
capital and of its shares accordingly.

(2) A special resolution under this section is in this Act called a resolution or reducing share
capital.

60. Application to Court for confirming order

Where a company has passed a resolution for reducing share capital it shall apply by petition
to the Court for an order confirming the reduction.

61. Addition to name of company of "and reduced"

On and from the passing by a company of a resolution for reducing share capital, or where
the reduction does not involve either the diminution of any liability in respect of un-paid
share capital or the payment to any share holder of any paid-up share capital, then on and
from the making of the order by the Court confirming by the reduction the company shall add
to its name, until such date as the Court may fix, the words "and reduced" as the last words in
its name and those words shall until that date be deemed to be part of the name of the
company:

Provided that where the reduction does not involve either the diminutior of any liability in
respect of unpaid share capital or the payment to any shareholder of any paid-up share
capital, the Court may, if it thinks expedient dispense altogether with the addition of words
"and reduced".

62. Objections by creditors and settlement of list of objecting creditors:

(1) Where the proposed reduction of share capital involves either diminution of liability in
respect of unpaid share capital or the payment to any shareholder of any paid-up share
capital, without permission of the Court and in any other case if the Court so permits every
creditor of the company, who at the date fixed by the Court is entitled to any debt or claim
which if that date were the commencement of the winding up of the company would be
admissible in proof against the company shall be entitled to object to the reduction.

(2)The Court shall settle a list of creditors so entitle to object, and for that purpose shall
ascertain as far as possible without requiring an application from any creditor the names those
creditors and the nature and amount of their debts or claims and may issue notices fixing a
day or days within which creditors not entered on the list are to claim to be so entered on to
be excluded from the right of objecting to the reduction; and after consideration such claims
the Court shall finalise the list.

63. Power to dispense with consent of creditor on security being given for his debt
Where a creditor entered on the list of creditors whose debt or claim is not discharged or
determined does not consent to the reduction, the Court may, if it thinks fit dispense with the
consent of the creditor on the company securing payment of his debt or claim by
appropriating as the Court may direct the following amount that is to say--

(i) if the company admits the full amount of his debt or claim or though not admitting it is
willing to provide for it then the full amount of the debt or claim;

(ii) if the company does not admit or is not willing to provide for the full amount of the debt
or claim, or if the amount is contingent or not ascertained, then an amount fixed by the Court
after the like inquiry and adjudication as if the company were being wound up by the Court.

64. Order confirming reduction

The Court if satisfied with respect to every creditor of the company who under this Act is
entitled to object to the reduction, that either consent tot he reduction has been obtained or his
debt or claim has been discharged or has been determined or has been secured may make an
order confirming the reduction on such terms and conditions as it thinks fit.

65. Registration of order minutes of reduction

(1) The Registrar shall, on production to him, register the following documents, namely:--

(a) the certified copy of the order of the Court confirming the reduction of the share capital of
a company.

(b) a copy of the minutes approved by the Court, showing the following :

(i) the amount of the reduced share capital;

(ii) the number of shares into which it is to be divided;

(iii) the nominal value of each such share;.

(iv) the amount, if any, at the date of registration, deemed to be paid up on each such
share.

(2) On the registration under sub-section (1) and not before, the resolution for reducing share
capital as confirmed by the order so registered shall take effect.

(3) Notice of the registration shall be published in such manner as the Court may direct.
(4) The Registrar shall certify under his hand the registration of the order and minutes, and
his certificate shall be conclusive evidence that all the requirements of this Act with respect
to reduction of share capital have been complied with, and that the share capital of the
company is such as is stated in the minute.

66. Minutes to form part of memorandum

(1) The minutes when registered shall be deemed to be substituted for the corresponding part
of the memorandum of the company, and shall be valid and alterable as if it had been
originally contained therein, and it shall be embodied in every copy of the memorandum
issued after its registration.

(2) If a company makes default in complying with the requirements of this section, it shall be
liable to a fine not exceeding one hundred taka for each copy in respect of which default is
made, and every officer of the company who knowingly and willfully authorises or permits
the default shall be liable to a like penalty.

67. Liability of members in respect of reduced shares

(1) member of the company, past or present, shall not be liable in respect of any share to any
call or contribution exceeding in amount the difference, if any, between the amount paid, or,
as the case may be, the reduced amount, if any, which is to be deemed to have been paid, on
the share and the amount of the share as fixed by the minutes:

Provided that, if any creditor, entitled in respect of any debt or claim to object to the
reduction of share capital, is by reasons of his ignorance of the proceedings for reduction or
of their nature and effect with respect to his claim, not entered on the list of creditors, and,
after the reduction, the company is unable, within the meaning of the provisions of this Act or
with respect to winding up by the Court, to pay the amount of his debt or claim, then--

(i) every person who was a member of the company at the date of the registration of
the order for reduction and minute, shall be liable to contribute for the payment of that
debt or claim an amount not exceeding the amount which he would have been liable
to contribute if the company had commenced to be wound up on the day before that
registration; and

(ii) if the company is wound up, the Court on the application of any such creditor and
proof of his ignorance as aforesaid, may, if it thinks fit, settle accordingly a list of
persons so liable to contribute, and make and enforce calls and orders on the
contributors settle on the list as if they were ordinary contributories in a winding up.

(2) Nothing in this section shall after the rights of the contributories amount themselves.
68. Penalty on concealment of name of creditor:

If any officer of the company willfully conceals the name of any creditor entitled to object to
the reduction or willfully misrepresents the nature or amount of the debt or claim of any
creditor, or if any officer of the company abets, any such concealment or misrepresentation as
aforesaid every such officer shall have punishable with imprisonment which may extend to
two years, or with fine, or with both.

69. Publication of reasons for reduction:

In any case of reduction of share capital, the Court may require the company to publish, as
the Court directs, the reasons for reduction or such other information in regard thereto as the
Court may think expedient with a view to giving proper information to the public, and, if the
Court think fit, also causes which led to the reduction.

70. Increase and reduction of share capital of a company limited by guarantee:

A Company limited by guarantee and registered after the commencement of this Act may, if
it has a share capital and is so
authorised by its articles, increase or reduce its share capital in the same manner and subject
to the same conditions in and subject to which a company limited by shares may increase or
reduce its share capital under the provisions of this Act.

Variation of Shareholder's Rights

71. Rights of holders of special classes of shares:

(1) If in the case of a company, the share capital of which is divided into different classes of
shares, provision is made by the memorandum or articles authorising the variation of the
rights attached to any class of shares in the company, subject to the consent of any specified
proportion of the holders of the issued shares of that class or the sanction of are solution
passed at a separate meeting of the holders of those shares, and in pursuance of the said
provision the rights attached to any class of shares are at any time varied, the holders of the
less in the aggregate than ten per cent of the issued shares of that class, being persons who
did not consent to or vote in favour of the resolution for the variation, may apply to the Court
to have the variation cancelled, and where any such application is made, the variation shall
not have effect unless and until it is confirmed by the Court.

(2) An application under sub-section (1) must be made within fourteen days after the date on
which the consent was given or the resolution was passed, as the case may be, under that sub-
section and may be made on behalf of the shareholders entitled to make the application by
such one or more of their numbers as they may appoint in writing for the purpose.
(3) On any such application, the Court, after hearing the applicant and any other persons who
apply to the Court to be heard and appear to the Court to be interested in the application, may
if it is satisfied having regard to all the circumstances of the case that the variation would
unfairly prejudice the shareholders of the class represented by the applicant, disallow the
variation and shall, if not so satisfied, confirm the variation.

(4) The decision of he Court on any such application shall be final.

(5) The company shall, within fifteen days after the service on the company of any order
made on any such application, forward a copy of the order to the Registrar, and if default is
made in complying with this provision, the company shall be liable to a fine not exceeding
two hundred taka and every officer of the company who is knowingly and willfully in default
shall be liable to a like penalty.

(6) The expression "variation" in this section includes "abrogation" and the expression
"varied" shall be construed accordingly.

Registration of Unlimited Company as Limited

72. Registration of unlimited company as limited:

(1) Subject to the provisions of this section, any company registered as unlimited may
register under this Act as limited and any company registered before the commencement of
this Act as a limited company may re-register under this Act, but the registration of an
unlimited company as a limited company shall not affect any debts, liabilities, obligations or
contracts incurred or entered into by, to, with or on behalf of, the company before the
registration, and those debts, liabilities, obligations and contracts may be enforced in manner
provided by part VIII of this Act in the case of a company registered in pursuance of that
Part.

(2) On registration in pursuance of this section, the Registrar shall close the former
registration of the company, and may dispense with the delivery to him of companies of any
documents with copies of which he was furnished on the occasion of the original registration
of the company; but, save as aforesaid, the registration shall take place in the same manner
and shall have effect as if it were the first registration of the company under this Act.

73. Power of unlimited company to provide for reserve share capital on registration

(1) An unlimited company having a she capital may, by its resolution for registration as a
limited company in pursuance of this Act, do either or both of the following things, namely:--

(a) increase the nominal amount of its share capital by increasing the nominal amount of each
of its shares, but subject to the condition that no part of the amount by which its capital is so
increased shall be capable of being called up except in the event and for the purpose of the
company being wound up;

(b) provide that a specified portion of its uncalled share capital shall not be capable of being
called up except in the event and for the purpose of the company being wound up.

(2) the portion of the share capital increased or specified under sub- section (1) shall be called
the reserved share capital.

Reserve Capital of Limited Company

74. Reserve Capital of Limited company:

A limited company may by special resolution, determine that any portion of its share capital
which has not been already called up shall not be capable of being called up, except in the
event and for the purposes of the company being wound up, and thereupon that portion of its
share capital shall not be capable of being called up except in the event and for the purposes
aforesaid; and such portion shall be called reserved share capital.

Unlimited Liability of Directors

75. Limited company may have directors with unlimited liability

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

(2) In a limited company in which the liability of any director is unlimited, the directors of
the company, if any, and the member, who proposes a person for election or appointment to
the office of director, shall add to that proposal a statement that the liability of the person
holding that office will be unlimited and the promoter and officers of the company or one of
them shall, before the person accepts the office or acts therein, give him notice in writing that
his liability will be unlimited.

(3) If any director or proposer makes default in adding a statement as required by sub-section
(1), or if any promoter or officer of the company makes default in giving a notice as required
by that sub- section, the shall be liable to a fine not exceeding five thousand taka and shall
also be liable for any damage which the person so elected or appointed may sustain from the
default, but the liability of the person elected or appointed shall not be affected by the default.

76. Special resolution of limited company making liability of directors unlimited.

(1) A limited company if so authorised by its articles may, by special resolution, alter its
memorandum so as to render unlimited the liability of its directors or of any director. (2)
Upon the passing of any special resolution under sub-section (1), the provisions thereof shall
be valid as if they had been originally contained in the memorandum.

PART IV

MANAGEMENT AND ADMINISTRATION

Office and Name

77. 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
addressed.

(2) 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 same.

(3) 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 section.

(4) 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 business.

78. Publication of name by a limited company - Every limited company-

(a) 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:

(b) shall have its name engrave in legible characters on its seal;

(c) 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 company.

79. 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.

(2) If any officer of a limited company, or any person on its behalf--

(a) 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

(b) 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.

80. 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

81. 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.

82. 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 continues.

83. 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".

(2) 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.

(3) The statutory reports shall set out the following namely--

(a) 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;

(b) the total amount of cash received by the company in respect of all the shares allotted,
distinguished as aforesaid;
(c) showing under separate proper headings--

(i) 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;

(ii) 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;

(iii) any commission or discount paid or to be paid on the issue or sale of shares or
debentures; and

(iv) an account or estimate of the preliminary expenses of the company;

(d) 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;

(e) 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;

(f) 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.

(4) 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 one.

(5) 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 company.

(6) 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 company.
(7) 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 meeting.

(8) 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 Act.

(9) 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 meeting.

(10) 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.

(11) 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.

(12) Nothing in this section shall apply to a private company.

84. 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.

(2) 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.

(3) 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 requisition.

(4) 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.

(5) 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 default.

85. 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:

(a) 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--

(i) in the case of an annual general meeting, by all the members entitled to attend and
vote thereat; and

(ii) 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;

(b) 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;

(c) 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:

(d) 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
(e) 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 class.

(2) The following provisions shall have effect if so far as the articles of the company do not
make other provision in this behalf:--

(a) 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 meeting.

(b) 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;

(c) any member elected by the members present at a meeting may be chairman
thereof.

(d) 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;

(e) on a poll, votes may be given either personally or by proxy;

(f) 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.

(3) 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.

86. 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 company.

87. 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 give.

(2) 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.

(3) 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 resolution.

(4) At any meeting at which an extraordinary resolution or a special resolution is submitted to

be passed a poll may be demanded.

(5) 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 demanded.

(6) 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 Act.

(7) 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 Act.

88. 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 same.
(2) 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 resolution.

(3) 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 direct.

(4) 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 continues.

(5) 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 made.

(6) 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 default.

89. 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 purpose.

(2) 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 proceedings.

(3) Until the contrary is proved--

(a) 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

(b) 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:

(4) 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 charge.
(5) 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 words.

(6) 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 continues.

(7) 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 them.

Directors

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

(2) Every private company other than a private company mentioned in sub-section (1) shall
have at least two directors;

(3) Only a natural person may be appointed a director.

91. Appointment of directors: - (1) Notwithstanding anything contained in the articles of a

company--

(a) the subscribers of the memorandum shall be deemed to be the directors of the
company until the first director are appointed.

(b) the directors of the company shall be elected by the members from among their
number in general meeting; and

(c) 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.
92. 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 -

(a) signed and filed with the Registrar a consent in writing to act as such director; and

(b) in the case of companies having a share capital -

(i) signed the memorandum for a number of shares not less than his qualification
shares; or

(ii) taken from the company and paid or agreed to pay for his qualification shares; or

(iii) signed and filed with the registrar a contract in writing to take form the company
and pay for his qualification shares; or

(iv) 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 name.

(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.

93. 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 appointed.

(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.

94. Disqualifications of directors - (1) A person shall not be capable of being appointed
director of a company, if -
 (a) he has been found to be of unsound mind by a competent court and the finding is
in force; or

(b) he is an undischarged insolvent; or

(c) he has applied to be adjudicated as an insolvent and his application is pending; or

(d) 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

(e) he is a minor.

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

95. 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 Bangladesh.

96. 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
year.

97. 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 articles.

(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).

98. 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.

99. 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 both.

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

100. 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 effect.

101. 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 Bangladesh.

(2) 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 Bangladesh.

(3) 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.

102. 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--

(a) 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

(b) 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 Court.
103. 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--

(a) any director of the lending company

(b) any firm in which any director of the lending company is a partner;

(c) any private company of which any director of the lending company is a director or
member; or

(d) 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--

(i) 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

(ii) 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

(2) 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 company.

(3) 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 advance.

104. 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.

105. 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 company.

106. 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 director.

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

107. 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--

(a) sell or dispose of the undertaking of the company; and

(b) remit any debt due by a director.

108. Vacation of office of director--(1) The office of a director shall be vacant, if--

(a) 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

(b) he is found to be of unsound mind by a competent court; or

(c) he is adjudged an insolvent; or

(d) 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
 (f) 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

(g) 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

(h) he acts in contravention of section 105.

(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).

109. 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
company.

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.

110. 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.

(2) 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 Act.

(3) 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 occasion.

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

111. Compensation for loss of office not permissible to managing or whole time
directors or directors who are managers.--(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.

(2) No payment mentioned in sub-section (1) shall be made by the company to any other
director.

(3) No payment shall be made to a managing or other director in pursuance of sub-section (1)
in the following cases namely:--

(a) 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;

(b) where the director regigns his office otherwise than on the reconstruction of the
company or its amalgamation as aforesaid.

(c) where the office of the director is vacated by virtue of any provision of this;

(d) 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;

(e) 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;

(f) where the director has instigated, or has taken part directly or indirectly in bringing
about, the termination of his office.

(4) 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--

(a) the average remuneration received by him during the period of three years
immediately preceding the date on which he acased to holdthat office; and

(b) 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.

(5) 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 capacity.

112. Payment to director, etc. 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.

(2)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
company.

(3) Sub-sections (1) and (2) shall not affect in any manner the operation of section 111.

113. Payment to director for loss of office etc. in connection with transfer of shares.--(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--

(i) an offer made to the general body of shareholders:

(ii) 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;

(iii) 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

(iv) 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 person.

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.

(2) 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 shareholders.

(3) If -

(a) any such director fails to take reasonable step in pursuance of sub section (2); or

(b) any person who has been properly required by any such director to include the
particulars referred to in subsection (2), in such notice or to send them with such
notice.

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

(4) 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 it.

(5) 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.

(6) If -

(a) the concerned director fails to comply with the requirements of subsection (2); or

(b) 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.
114. 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--

(a) 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

(b) 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 applies.

(2) If, in connection with any such transfer as is mentioned in section 112 or in section 113--

(a) 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

(b) 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.

(3) 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.

(4) 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 company.

115. 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--

(a) 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;

(b) 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

(c) in the case of a firm, the full name, address and nationality of each partner, and the
date on which each became a partner.

(2) 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--

(a) 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;

(b) in the case of any change in such particulars, within a period of fourteen days from
the day change takes place.

(3) 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 inspection.

(4) 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 taka.

(5) 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 register.

MANAGING AGENT

116. Duration of appointment of managing agent.--(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.
(3) 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 any.

(4) 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 paid.

(5) Nothing in this section shall apply to a private company which is not the subsidiary
company of a public company.

117. Conditions applicable to managing agents.--Notwithstanding anything to the contrary

contained in the articles of the company or in any agreement with the company.

(a) 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;

(b) the office of a Managing agent shall be deemed to be vacant if he is adjudged insolvent;

(c) 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;

(d) a charge or assignment of his remuneration of any part thereof effected by a managing
agent shall be void as against the company:

(e) 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

(f) 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.

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

(a) has, in connection with the conduct or management of the affairs of the company, been
guilty of fraud, misfeasance or breach of trust: or

(b) has been conduction the affairs of the company for a fraudulent or unlawful purpose; or

(c) 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.

(2) The investigator appointed under sub-section (1)--

(a) 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;

(b) 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:--
 (i) 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;

(ii) compelling the production of any books of accounts or documents; and

(iii) issuing commissions for the examination of witnesses;

(3) 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).

(4) 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--

(a) modify the terms of the managing agent's agreement of management with the
company.

(b) 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

(c) 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.

(5) 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.

(6) 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 removal.

(7) 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 removal.

(8) 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 order.
(9) The Administrator shall receive such remuneration as the Government may determine.

(10) The management of the affairs of the company shall, on and from the date of
appointment of the Administrator, vest in him.

(11) 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.

(12) 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).

(13) 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 office.

(14) 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 company.

(15) 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.

(16) 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 continues.

(17) 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 specified.

(18) The Government may, by notification in the official Gazette, make rules to carry out the
purpose of this section.
(19) 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
company.

119. Remuneration of managing agent.--(1) Where a company appoints a managing agent,

it shall, in the documents of appointment specify the following---

(a) the remuneration of the managing agent which shall be a sum based on fixed
percentage of the net annual profits of the company; and

(b) a minimum payment, in the case of absence or inadequacy of profits, together with
office allowance.

(2) 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 company.

(3) 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 fund.

(4) 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 insurance.

120. 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 agent.

(2) 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.

(3) 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 unpaid.

(4) Nothing in this section shall apply to a private company except a private company which
is the subsidiary of a public company.

(5) 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 company.

121. 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.

122. Purchase by company of shares of company under same managing agent.-- 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.

123. Restriction on managing agent's powers of management.-- 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.

124. Managing agent not to engage in business competing with the business of managed
company. -- 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.

125. Limit on number of director appointed by managing agent.--- 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 onethird of the whole number of
directors.

CONTRACTS

126. 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.

127. Bills of exchange and promissory note.--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.

128. 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.

129. 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
used.

(2) 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.

(3) 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 him.

(4) 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 same.

(5) 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.

130. 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.

(2) Every director who contravenes the provisions of sub-section (1) shall be liable to a fine
not exceeding five thousand taka.

(3) 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 hours.

(4) 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 taka.

131. 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.

(2) Every director who contravences the provision of sub-section (1) shall be liable to a fine
not exceeding five thousand taka.

(3) 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.

132. Disclosure to members in case or contract appointing a manager.--(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.

133. 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 made.

(2) 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
meeting.

(3) If any such manager or other agent makes default in complying with the requirements of
this section--
(a) the contract shall, at the option of the company, be void as against the company; and

(b) such manager or other agent shall be liable to a fine not exceeding five hundred taka.

Prospectus

134. 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 prospectus.

135. 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 Schedule.

(2) 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 void.

(3) 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--

(a) in connection with a bonafide invitation to a person to enter into an underwriting

agreement with respect to the shares or debentures; or

(b) in relation to shares or debentures which were not offered to the public.

(4) 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 taka.

(5) 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--

(a) as regards any matter not disclosed, he proves that he had no knowledge thereof;
or
 (b) he proves that the non-compliance or contravention arose form an honest mistake
of the fact on his part; or

(c) 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.

(6) This section section not apply--

(a) 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 :

(b) 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.

(7) 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 section.

136. Expert to be unconnected with formation or management or company.-- 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---

(a) 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
 (b) another statement that he has given and has not withdrawn his consent as aforesaid
appear's in the prospectus.

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 writing.

(2) The copy of the prospectus delivered to the Registrar for registration under sub-section (1)
shall have endorsed thereon or attached thereto--

(a) any consent of the issue of the prospectus required by section 137 from any person as an
expert; and

(b) in the case of a prospectus issued generally, also--

(i) 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

(ii) 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 therefor.

(3) Every prospectus to which sub-section (1) applies shall, on the face of it--

(a) state that a copy has been delivered for registration as required by this section;

(b) specify any document required by this section to be endorsed on or attached to the
copy so delivered; and

(c) a list of statements included in the prospectus.

(4) 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 capacity.

(5) 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 Registrar.
(6) 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 taka.

139. Penalty for contravention of section 136 and 137.--(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.

(2) 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.

(3) 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,
(4) 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
void.

(5) 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 consideration.

(6) The other provisions of this section shall have effect---

(a) 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 :---

(i) references in the said other provisions to sale shall be substituted for references to
allotment;

(ii) 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

(iii) 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"
respectively.

(7) 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
exchange.

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
Schedule.
(2) 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 thereof.

(3) This section shall not apply to a private company.

(4) 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.

(5) 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

(6) for the purposes of this section---

(a) 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

(b) 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.

(7) 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 therewith.

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 thereof.

(2) 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---

(a) 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

(b) 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 received.

(3) 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---

(a) 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

(b) the place and time at which the contract under which the said shares or debentures
have been or are to be allotted may be inspected.

(4) 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 company.

(5) 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 writing.

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

provisions relating to prospectus---

(a) 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
 (b) 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.

(2) 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 therewith.

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 meeting.

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---

(a) every person who is a director of the company at the time of the issue of
prospectus;

(b) 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;

(c) every person who is a promoter of the company; and

(d) 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---

(a) 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
(b) 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

(c) 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

(d) that---

(i) 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

(ii) 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

(iii) 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.

(3) 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---

(a) 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
 (b) 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

(c) 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 true.

(4) Where--

(a) 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

(b) 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
prospectus.

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.

(5) 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 misrepresentation.

(6) For the purposes of this section---

(a) 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
 (b) the expression "expert" has the same meaning as in section 139.

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 true.

(2) 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---

(a) the consent required by section 137 to the inclusion therein of statement purporting to be
made by him as an expert ; or

(b) the consent required by sub-section (4) of section 138.

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---

(a) any agreement for, or with a view to acquiring, disposing of, subscribing for, or
underwriting shares or debentures; or

(b) 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 debenture.

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---

(a) 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);

(b) 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.
(2) 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---

(a) 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;

(b) 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;

(c) the repayment of any moneys borrowed by the company in respect of the
foregoing matters ; and

(d) working capital.

(3) 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 subscription.

(4) 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).

(5) 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 taka.

(6) The amount payable on application on each share shall not be less than five percent of the
nominal amount of the share.

(7) 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.

(8) 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 prospectus.
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.

(9) 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 it.

(10) 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.

(11) 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 subscription.

(12) 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---

(a) 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

(b) 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.

(13) 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 Act.

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 up.
(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 Business.--- (1) A company shall not commence

any business or exercise any borrowing powers unless---

(a) 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

(b) 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.

(i) 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

(ii) where the shares are not offered, and amount payable in cash by the director on
such share :

(c) 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

(d) 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
prospectus.

(2) 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.

(3) 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 binding.
(4) 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 debentures.

(5) 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 continues.

(6) 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 capital.

PART IV

MANAGEMENT AND ADMINISTRATION

Office and Name (Continued)

151. Return as to allotment.-(1) Where a company having a share capital makes any
allotment of its shares, the company shall within sixty days thereafter, file with Registrar the
following documents, namely :--

(a) a return of the allotments, stating the number and nominal amount of the shares comprised
in the allotment, the name address nationality and other descriptions of the allottees, and the
amount, if any, paid or due and payable on each share, and

(b) in the case of shares allotted as fully or partly paid up otherwise than in cash, the copies of
the following agreements duly stamped and verified in the prescribed manner namely :-

(i) vendor's agreement, that is the agreement which constitutes the title of the allotee
to the allotment; and

(ii) the contract of sale or service or to other consideration in respect of which the
allotment was made;

(c) the number and nominal value of the allotted shares referred to in clause (b); and

(d) the deed of sale of any immovable property, if the consideration for allotment of shares
referred to in clause (b) is sought to the paid by the allottee by way of transfer of such
property.
(2) Where a contract mentioned in sub-section (1) is not reduced to writing, the company
shall, within one month after the allotment, file with the Registrar the prescribed particulars
of the contract stamped with the same stamp duty as would have been payable if the contract
had been reduced to writing, and these particulars shall be deemed to be an instrument within
the meaning of the Stamp Act, 1899 (II of 1899) and the Registrar may, as a condition of
filing the particulars, require that the stamp duty payable thereon be adjudicated under section
31 of that Act.

(3) If the Registrar is satisfied that in the circumstances of any particular case the period of
sixty days specified in subsection (1) and (2) for compliance with the requirements of these
section is inadequate, he may, on an application made by the company before expirys of the
sixty days, extend that period as he thinks fit, and if he does so, the provisions of subsection
(1) and (2) shall have effect in that particular case as if for the extended period allowed by
Registrar specified in those sub-sections.

(4) If a company defaults in complying with the requirements of this section, every officer of
the company who is knowingly a party to the default shall be liable to a fine not exceeding
one thousand taka for every day during which the default continues :

Provided that, in case of default in filling with the Registrar within the time specified in sub-
section (1) and (2) any document required to be filed by this section, the company or any
person liable for the default may apply to the Court for relier, and the Court, if satisfied that
the commission to file the document was accidental or due to inadvertence or that on other
grounds it is just and equitable to grant relief, may make an order extending the time for the
filing of the document for such a period as the Court may think proper.

Commissions and Discounts

152. Restrictions on payment of commissions, discounts, etc.- (1) It shall be lawful for a
company to pay a commission to any person in consideration of his subscribing or agreeing
to subscribe, whether absolutely or conditionally, for any shares in the company, for
procuring or agreeing to procure subscription, whether absolutely or conditionally for any
shares in the company, if---

(a) the payment of the commission is authorised by the articles and the commission paid or
agreed to be paid does not
exceed the amount or rate so authorised; and

(b) if the amount or rate of percentage of the commission paid or agreed to be paid is---

(i) in the case of shares offered to the public for subscription, in the prospectus; and

(ii) in the case of shares not offered to the public for subscription, disclosed in the
statement lieu of prospectus or in a statement in the prescribed form signed in like
 manner as a statement in lieu of prospectus and filed with the Registrar and, where a
circular of notice, not being a prospectus inviting subscription for the shares is issued,
also disclosed in that circular or notice.

(2) Save as provided in sub-section (1) and section 153, no company shall allot any of its
shares or apply any its moneys either directly of indirectly in payment of any commission.
discount or allowances, to any person in confederation of his subscribing or agreeing to
subscribe, whether absolutely or conditionally, for any shares of the company or procuring or
agreeing to procure subscriptions, whether absolutely or conditionally, for any shares in the
company, and the shares shall not be so allotted or the money shall not be so applied by
adding to the purchase-money of any property acquired by the company or the contract price
of any work to be executed for the company or the money to be paid out of the nominal
purchase money or contract price, or otherwise.

(3) Nothing in this section shall affect the power of any company to pay such brokerage as it
has heretofore been lawful for a company to pay and a vender to, promoter of, or other person
who received payment in money or shares from, a company shall have and shall be deemed
always to have had power to apply any part of the money or shares so received in payment of
any commission, the payment of which, if made directly by the company, would have been
legal under this section.

153. Power to issues share at a discount. - (1) Subject to the provisions of this section, it
shall be lawful for a company to issue at a discount shares in the company of a class already
issued :

Provided that -

(a) the issued of the shares at a discount must be authorised by resolution passed in
general meeting of the company and must be sanctioned by the Court;

(b) the resolution must specify the maximum rate of discount, not exceeding ten
percent in any case, at which shares are to be issued;

(c) not less than one year must at the date of issued have clasped since the date on
which the company was entitled to commence business;

(d) the shares to be issued at a discount must be issued within six months after the
date on which the issue is sanctioned by the Court or within such extended time as the
Court may allow.

(2) Every prospectus relating to the issue of the shares and every balance sheet issued by the
company subsequently to the issue must contain particulars of the discount allowed on the
issue of the shares or of so much of that discount as has not been written off at the date of the
issue of the document in question.
(3) If accompany defaults in complying with sub-section (2) the company and also every
officer of the company who is in default shall be liable to a fine not exceeding five hundred
taka.

154. Issue of redeemable preference shares. - (1) Subject to the provisions of this section, a
company limited by shares may, if so authorised by its articles, issue preference shares which
are, or at the option of the company are to be or liable to be redeemed :

Provided that -

(a) no such shares shall be redeemed except out of profits of the company which
should otherwise be available for dividend or out or the proceeds of a fresh issue of
shares made for the purposes of the redemption or out of sale proceeds of any
property of the company.

(b) no such shares shall be redeemed unless they are fully paid;

(c) where any such shares are redeemed otherwise than out of the proceeds of a fresh
issue, there shall, out of profits which would otherwise have been available for
dividend, be transferred to a reserve fund, to be called "the capital redemption reserve
fund" a sum equal to the amount applied in redeeming the shares, and the provisions
of this relating to the reduction of the shares capital of a company shall, except as
provided in this section, apply if the capital redemption reserve fund were paid up
share capital of the company;

(d) where any such share are redeemed out of the proceeds of a fresh issue, the
premium, if payable on redemption, must be provided for out of the profits of the
company before the shares are redeemed.

(2) In every balance-sheet of a company which has issued redeemable preference shares the
following shall be included, namely : ---

(a) a statement specifying what part of the issued capital of the company consists of
such shares; and

(b) the date on or before which those shares are, or are to be, liable to be, redeemed or
where no definite date is fixed for redemption, the period of notice to be given for
redemption.

(3) Subject to the provisions of this section, the redemption of preference shares may be
effected on such terms and in such terms and in such manner as may be provided by the
articles of the company.
(4) Where in pursuance of this section a company has redeemed or is about to redeem any
preference shares, it shall have power to issue shares up to the nominal amount of the shares
redeemed or to be redeemed, as if those had never been issued, and accordingly the share
capital of the company shall not, for the purpose of calculating the fees payable under section
384, be deemed to be increased by the issue, of shares in pursuance of this sub-section :

Provided that, where new shares are issued before the redemption of the old shares, the new
shares shall not, so far as they relate to stamp duty, be deemed to have been issued in
pursuance of this sub-section, unless the old shares are redeemed within one month after the
issue of the new shares.

(5) Notwithstanding anything in the other provisions of this section, where redeemable
preference shares deemed, under sub-section (4), to have never been issued are, or are to be,
redeemed for the purpose of allotting them as fully paid up bonus shares to the members of
the company, the redemption reserve fund may be applied by the company up to the nominal
value of the new shares referred to in sub-section (1) (c) for such redemption.

(6) If a company defaults in complying with any of the provisions of this section, the
company and also every officer of the company who is in default shall be liable to a fine not
exceeding two thougsand taka.

155. Further issue of capital. - (1) Where the directors decided to increase the subscribed
capital of the company by issue of further shares within the limit of the authorised capital -

(a) such further shares shall be offered to the members in proportion, as nearly as
circumstances admit, to the capital paid up on the existing share held by such member,
irrespective of class, at the date of the offer;

(b) such offer shall be made by notice specifying the number of shares offered and specifying
the time limit. Not being less than fifteen days from the date of the offer, within which the
offer if not accepted, will be deemed to have been declined;

(c) after the expiry of the time specified in the notice aforesaid, or on receipt of earlier
intimation from the members to whom such notice is given that he declines to accept the
shares offered, the directors may dispose of the same in such manner as they may think most
beneficial to the company.

(2) Notwithstanding anything contained in sub-section (1) the further shares aforesaid may be
offered to any person whether or not those person include its person referred to in clause (a)
of that sub-section in manner whatsoever.

156. Statement in balance sheet as to commissions and discounts. - Where a company has
paid any sums by way of commission in respect of any shares or debentures or allowed any
sums by way of discount in respect of any debentures, the total amount so paid or allowed or
so much thereof as has not been written off, shall be stated in every balance sheet of the
company until the whole amount thereof has been written off.

Payment of Interest out of Capital

157. Power of company to pay interest out of capital in certain cases. - Where any shares
of a company are issued for the purpose of raising money to defray the expenses of the
construction of any works or building or the provision of any plant which cannot be made
profitable for a lengthened period, the company may pay interest on so much of that share
capital as is for the time being paid up for the period and subject to the conditions and
restrictions in this section mentioned and may charge the same to capital as part of the cost of
construction of the work or building or the provision of plant :

Provided that -

(a) no such payment shall be made unless the same is authorised by the articles or by special
resolution;

(b) no such payment whether authorised by the articles or by special resolution, shall be made
without the previous sanction of the government; and such sanction shall be conclusive
evidence for the purposes of this section that the shares of the company in respect of which
such sanction is given have been issued for a purpose specified in this saction;

(c) before sanctioning any such payment the government may, at the expense of the company,
appoint a person to inquire and report to the Government as to the circumstances of the case,
and may, before making the appointment, require the company to give security for the
payment of the costs of the inquiry;

(d) the payment shall be made only for such period and may be determined by the
Government, and such period shall in no case extend beyond the close of the half-year nest
after the half-year during which the works or buildings have been actually completed or the
plant provided;

(e) the rate of interest shall in no case exceed four percent per annum or such lower rate as
the Government, may, by notification in the official Gazette, prescribe;

(f) the payment of the interest shall not operate as a reduction of the amount paid up on the
shares in respect of which it is paid;

(g) the accounts of the company shall show the share capital on which, and the rate at which,
interest has been paid out of capital during the period to which the accounts relate.

Certificates of Shares, etc.

158. Limitation of time for issue of certificates. - (1) Every company shall, within ninety
days after the allotment of any of its shares, debentures or debenture-stock, and within ninety
days after the registration of transfer of any such shares, debentures or debenture-stock
complete and have ready for delivery the certificates of all shares, debentures, and the
debenture-stock allotted or transferred unless the conditions of issue of the shares, debentures
or debenture-stock otherwise provide.

(2) If default is made in complying with the requirements of this section, the company, and
also every officer of the company who is knowingly a party to the default shall be liable to a
fine not exceeding five hundred taka for every day during which the default continues.

Information as to Mortgages, Charges, etc.

159. Certain mortgages and charges to be void if not registered - (1) Every mortgage or
charge created after the commencement of this Act by a company and being either -

(a) a mortgage or charge for the purpose of securing any issue of debentures; or

(b) a mortgage or charge on uncalled share capital of the company, or

(c) a mortgage or charge on any immovable property wherever situated or any interest
therein, or

(d) a mortgage or charge on any book debts or the company, or

(e) a mortgage or charge, not being a pledge on any moveable property of the
company except stock-in- trade, or

(f) a floating charge on the undertaking or shall so far as any property of the company,
security on the company's property or undertaking is thereby conferred, be void
against the liquidator and any creditor of the company, unless the prescribed
particulars of the mortgage or charge, together with the instrument, if any, by which
the mortgage or charge is created or evidenced or a copy thereof verified in the
prescribed manner are filed with the Registrar for registration in manner required by
this Act within twenty-one days after the date of its creation ; put any contract or
obligation for repayment of the money thereby secure shall not be prejudiced; and
when a mortgage or charge becomes void under this section, the money secured
thereby shall immediately become payable.

Provided that -
 (i) in the case a mortgages or charge created out of Bangladesh comprising solely
property situate outside Bangladesh the said twenty one days shall be counted by
excluding the period which would be necessary to receive the instrument in
Bangladesh in due course had it been posted with due diligence; and

(ii) where the mortgage of charge is created in Bangladesh comprises property outside
Bangladesh the instrument creating or purporting to create the mortgage or charge or
a copy thereof verified in the prescribed manner may be filed for registration
notwithstanding that further proceedings may be necessary to make the mortgage or
charge valid or effectual according to the law of the country in which the property is
situate; and

(iii) where a negotiable instrument has been given to secure the payment of any book
debts of a company, the deposit of the instrument for the purpose of securing an
advance to the company shall no for the purposes of this section be treated as a
mortgage or charge on those book debts; and

(iv) the holding of debentures entitling the holder to a charge on immovable property
shall not be deemed to be an interest in immovable property.

(2) Where any mortgage or charge on any property of a company require to be registered
under this section has been so registered, any person acquiring such property or any part
thereof or any share or interest therein, shall be deemed to have notice of the said mortgage or
charge as from the date of such registration.

160. Registration of charge on properties acquired subject to charge. - (1) Where a

company registered in Bangladesh acquires any property which is subject to a charge on any
such kind as would, if it had been created by the company, after the acquisition of the
property, have been required to be registered under this Part, the company shall couse the
prescribed particulars of the charge together with a copy certified in the prescribed manner to
be a correct copy of the instrument, if any, by which the charge was created or its evidenced,
to be delivered to the Registrar for registration in manner required by this Act within twenty-
one days after the date on which the acquisition completed.

Provided that if the Property is situated and the charge was created outside Bangladesh the
said twenty-one days shall be counted by excluding the period which would be necessary to
receive the instrument in Bangladesh in due course of post had it been despatched with due
diligence.

(2) If a company defaults in complying with the provisions of this section the company and
also every officer of the company, who is knowingly and willfully in default, shall be liable
to a fine not exceding one thousand taka.
161. Particulars in case of series of debentures entitling holders pari passu. - (1) Where a
series of debentures containing, or giving by reference to any other instrument, any charge to
the benefit of which the debentures. holders of that series are entitled pari passu is created by
a company, it shall be sufficient for the compliance of section 159 if there are filed with the
Registrar with twenty-one days after the execution of the deed containing the charge or, if
there is no such deed, after the execution of any debentures of the series, the following :-

(a) the total amount secured by the whole series;

(b) the dates of the resolutions authorising the issue of the series and the date of the
covering deed, if any, by which the security is created or defined;

(c) a general description of the property charged;

(d) the names of the trustees, if any, from the debenture-holders; and

(e) the deed or a copy thereof varified in the prescribed manner containing the charge
or if there is no such deed one of the debentures of the series ;

Provided that, where more than one issue is made of debentures in the series, there shall be
filed with the Registrar for entry in the register particulars of the date and amount of each
issue, bu an omission to do this shall no affect the validity of the debentures issued.

(2) The Registrar shall register the particulars and the deeds filed under sub section (1).

162. Particulars in case of commission, etc. on debentures--- Where any commission,

allowance or discount has been paid or made either directly or indirectly by the company to
any person in consideration of his subscribing of agreeing to subscribe, whether absolutely or
conditionally, for any debentures of the company, or for procuring or agreeing to procure
subscriptions, whether absolutely or conditionally for any such debentures, the particulars
required to be filed for registration under section 159 and 161 shall include particulars as to
the amount or rate percent of the commission, discount or allowance so paid or made, but an
ommission to do this shall not affect this validity of the debentures issued :

Provided that the deposit of any debentures as security for any debt of the company shall not
for the purposes of this provision be treated as the issue of debentures at a discount.

163. Registers of mortgages and charges.---(1) The registrar shall keep, with respect to
each company, a register in the prescribed form of all mortgages and charges created by the
company after the commencement of this Act and requiring registration under section 159
and shall, on payment of the prescribed fee, enter in the register, with respect to every such
mortgage or charge, the date of creation, the amount secured by it, short particulars of the
property mortgaged or charged and the names of the mortages or the persons entitled to the
charge.
(2) After making the entry required by sub-section (1) the Registrar shall return the
instrument, if any, or the verified copy thereof, as the case may be, filed in accordance with
the provisions of section 159 or 161 to the person filling the same.

(3) The register kept in pursuance of this section shall be open to inspection by any person on
payment of the fee, as specified in Schedule II.

164. Index to register of mortgages and charges.---The Registrar shall keep a

chronological index, in the prescribed form and with the prescribed particulars of the
mortgages and charges registered with him under this Act.

165. Certificate of registration.---The Registrar shall give a certificate under his hand of the
registration of any mortgage or charge registered in pursuance of section 159, stating the
amount thereby secured, and the certificate shall be conclusive evidence that the requirement
of sections 159 to 163 as to registration have been complied with.

166. Endorsement of certificate of registration on debentures or certificate of

debenture-stock.-- The company shall cause a copy of every certificate of registration, given
under section 165 to be endorsed on every debenture or certificate of debenture-stock which
is issued by the company, and the payment of which is secured by the mortgage or charge so
registere :

Provided that nothing in this section shall be construed as requiring a company to cause a
certificate of registration of any mortaged or charge so given to be endoresed on any
debenture or certificate of debenture-stock issued by the company before the mortgage or
charge was created.

167. Duty of company and right of interested party as regards registration --- (1) Every
company to file with the Registrar for registration the prescribed particulars of every
mortgage or charge created by the company and of the issues of debentures of a series,
requiring registration under section 159, and registration of any such mortgage or charge may
be also effected on the application of any person interested therein.

(2) Where the registration is effected on the application of some person other than the
company, that person shall be entitled to recover from the company the amount of any fees
properly paid by him to the Registar on the registration.

(3) Whenever the terms of conditions or extent or operation of any mortgage or charge
registered under this section are modified, it shall be the duty of the company to send to the
Registrar the particulars of such modification and the provisions of this section as to
registration of the mortgage or charge shall apply to such modification of the mortgage or
charge as aforesaid.
168. Copy of instrument creating mortgage or charge to be kept at registered office.--Every
company shall cause a copy of every instrument creating any mortgage or charge requiring
registration under section 159 to be kept at the registered office of the company;

Provided that, in the case of a series of uniform debentures, a copy of one such debenture
shall be sufficient.

169. Registration of appointment or receiver-(1) I any person obtains an order for the
appointment of a receiver of the property of a company, or appoints such a receiver under any
powers contained in any instrument, he shall within fifteen days from the date of the order or
of the appointment under the powers contained in the instrument, file notice of the fact with
the Registrar and the Registrar, shall on payment of the prescribed fee, enter the fact in the
register of mortgages and charges.

(2) If any person makes default in complying with the requirements of this section, he shall
be liable to a fine not exceeding two hundred taka for everyday during which the default
continues.

170. Filling of accounts of Receivers-(1) A receiver referred to in section 169 of any

property who had taken possession shall for every financial year during such possession and
also on ceasing to act as receiver, file with the Registrar an abstract in the prescrived from of
his receipts and payment during the period to which the abstract relates and shall also, on
ceasing to act as receiver, file with the Registrar, notice to that effect and the Registrar shall
inter the notice in the register of mortgages and charges.

(2) Where a receiver of the property of a company has been appointed, every invoice, order
for goods, or business letter issued by or on behalf of the company, or the receiver of the
company, being a document on or in which the name of the company appears, shall contain a
statement that a receiver has been appointed.

(3) For every default in complying with the requirements of this section, the company, and
also every officer of receiver as the case may be of the company, who knowingly and
willfully authorises or permits the default, shall be liable to a fine not exceeding five hundred
taka.

171. Rectification of register of mortgages - (1) If the Court satisfied that-

(a) the omission to register a mortgage or charge within the time required by section
159, or the omission or misstatement of any particular with respect to any such
mortgage or charge, or the omission to give intimation to the Registrar of the payment
or satisfaction of a debt from which the mortgage or charge was created, was
accidental or due to inadvertence or to some other sufficient cause, or
 (b) the omission is not of a nature to prejudice the position of creditors or share-
holders of the company, or

(c) on other grounds it is just and equitable to grant to relief the court may, on the
application of the company or any person interested and on such terms and conditions
as seem to the court just and expedient, order that the time for registration be extended
or, as the case may be, that the omission or mis-statement be rectified, and may make
such order as to the costs to be paid to the applicant as it thinks fit.

(2) Where the Court extends the time for the registration of mortgage, or charge, the order
shall not prejudice any right, as acquired in respect of the property concerned prior to the
time when the mortgage, or charge is actually registered.

172. Registration of Satisfaction of mortgages and charges--(1) The company shall give
intimation to the Registrar of the payment of satisfaction of any mortgage or charge required
to be registered under section 159 within twenty-one days from the date of the payment or
satisfaction thereof.

(2) The Registrar shall, on receipt on such intimation, cause a notice to be sent to the
mortgage, calling upon him to show cause, within a time not exceeding fourteen days to be
fixed by such notice, why the payment or satisfaction of the charge or mortgage should not be
recorded.

(3) The Registrar shall, if no cause is shown, order that a memorandum of satisfaction he
entered on the register and shall, if required, furnish the company with a copy thereof.

(4) Where cause is shown the Registrar shall record a note to the effect in the register, and
shall inform the company that he has done so

173. Penalties--(1) If any company makes default in filing with the Registrar for registration
the particulars-

(a) of any mortgage or charge created by the company, or

(b) of the payment or satisfaction of a debt in respect of which a mortgage or charge

had been registered under section 159 or section 160, or

(c) of the issue of debentures of a series; requiring registration with the Registrar
under the foregoing provision of this Act, then unless the registration had been
effected on the application of some other person, the company, and also every officer
of the company or other person who is knowingly a party to the default, shall, on
conviction be liable to a fine not exceeding one thousand taka for everyday during
which the default continues.
(2) Subject as aforesaid, if any company makes default in complying with any of the
requirements of this Act as to the registration with the Registrar of any mortgage or charge
created by the company, the company, and also every officer of the company, who is
knowingly and willfully a party to the default, shall, without prejudice to any other liability,
be liable on conviction to a fine not exceeding two thousand taka.

(3) If any person knowingly and willfully authorises or permits the delivery of any debenture
or certificate of debenture-stock requiring registration with the Registrar under the foregoing
provisions of this Act the certificate of registration being endorsed upon it as required by
section 166, he shall, without prejudice to any other liability, be liable of conviction to a fine
not exceeding two thousand taka.

174. Company's register of mortgages:--(1) Every company shall keep register of

mortgages and enter therein all mortgage and charges specifically affecting property of the
company and all floating charge on the under taking or on any property of the company,
giving in each case a short description of the property mortgaged or charged the amount of
the mortgage or charge and, except in the case of securities to bearer, the name of the
mortgages of persons entitled thereto.

(2) If any director, manager or other officer of the company knowingly and willfully
authorieses or permits the omission of any entry required to be made in pursuance of this
section, he shall be liable to a fine not exceeding two thousand taka.

175. Right to inspect copies of instruments creating mortgages and charges and
company's register of mortgages :- (1) The copies kept at the registered office of the
company in pursuance of section 168 or instruments creating any mortgage or charge
requiring registration under this Act with the Registrar and register of mortagges kept in
pursuance of section 174, shall kept be open at all reasonable times to the inspections of any
creditor or member of the company without fee, and the register of mortgages shall also be
kept open to the inspection of any other person on payment of such fee, not exceeding ten
taka for each inspection, as the company may prescribe.

(2) If inspection of the said copies or register is refused the company shall be liable to a fine
not exceeding one hundred taka for the first day and to a further fine not exceeding fifty taka
for everyday during which the refusal continues, and every officer of the company, who
knowingly authorises or permits the refusal, shall incur the like penalty, and in addition to the
above penalty, the Court may be order compel an immediate inspection of the copies or
register.

176. Right to inspect resister of debenture-holders and to have copies of trust deeds:--(1)
A company shall keep open every register of the debenture holders for he inspection its
debenture-holders and share- holders and every such holder may require a copy of the register
or part thereof on payment of fees specified in Schedule II:
Provided that-

(a) the register shall not be inspected during such period or periods not exceeding in
the whole thirty days in any year, as may be specified in the articles; and

(b) subject to such reasonable restrictions as may be imposed by the general meeting,
the register shall be kept open for inspection for at least two hours in a day during the
permissible period.

(2) A copy of any trust-deed for securing any issue of debentures shall be forwarded to every
holder of any such debentures at his request on payment, in the case of a printed trust deed, of
the sum of ten taka or such less sum as may be fixed by the company, or where the trust-deed
is not printed, the fees specified in schedule-II.

(3) If inspection is refused or a copy is refused or not forwarded, the company shall be liable
to a fine not exceeding one hundred taka for the first and to a further fine not exceeding fifty
taka for every day subsequently during which the refusal continues, and every officer of the
company who knowingly authorises or permits the refusal shall incur the like penalty; and the
Court may be order compel an immediate inspection of the register.

Debenture and Floating Charges

177. Perpetual debentures:- A conditions contained in any debenture or in any deed for
securing any debentures, whether issued or executed before or after the passing of this Act
shall not be invalid by reason only that thereby the debentures are made irredeemable or
redeemable only on the happening of a contingency, however, remote, or on the expiration of
a period however long.

178. Power to re-issue redeemed debentures in certain cases:- (1) Where either before or
after the commencement of this Act, a company has redeemed any debenture previously
issued, the company shall have right, and shall be deemed to have had the right, to keep the
debentures alive for the purposes of re-issue, unless-

(a) the articles of the conditions of issue expressly otherwise provides; or

(b) the debentures have ben redeemed in pursuance of any obligation on the company
so to do, not being an obligation enforceable only by the person to whom the
redeemed debentures were issued or his assigns.

(2) In the exercise of the right under sub-section (1), the company shall have power, and shall
be deemed always to have power, to re-issue the debentures either by re-issuing the same
debentures or by issuing other debentures in their place.
(3) Upon such re-issue, the person entitled to the debentures shall have, and shall be deemed
always to have had, the same rights and priorities as if the debentures had not previously been
issued.

(4) Where with the object of keeping debentures alive for the purpose of re-issue they have,
either before or after the commencement of this Act, been transferred to a nominee of the
company, a transfer from that nominee shall be deemed to be a re-issue for the purposes of
this section.

(5) Where a company has, either before or after the commencement of this Act, deposited any
of its debentures to secure advances from time to time on current account or otherwise, the
debentures shall not be deemed to have been redeemed by reason only of the account of the
company having ceased to be in debt whilst the debentures remained so deposited.

(6) The re-issue of a debenture or the issue of another debenture in its place under the power
by this section given to, or deemed to have been possessed by a company, whether the re-
issue or issue was made before or after the commencement of this Act, shall be treated as the
issue of a new debenture for the purposes of stamp duty, but its shall not be so treated for the
purposes of any provision limiting the amount or number of debentures to be issued:

Provided that any person leading money on the security of a debenture re-issued under this
section which appears to be duly stamped may give the debenture in evidence in any
proceedings for enforcing his security without payment of the stampduty or any penalty in
respect thereof, unless he had notice or, but for his negligence, might have discovered that the
debenture was not duly stamped, but in any such case the company shall be liable to pay the
proper stamp-duly and penalty.

(7) Nothing in this section shall prejudice any power to issue debenture in place of any
debentures paid off or otherwise satisfied or extinguished, reserved to a company by its
debentures or the securities for the same.

179. Specific performance of contract to subscribe for debentures:- A contract with a

company to take up and pay for any debentures of the company may be enforced by a decree
for specific performance.

180. Payment of certain debts out of assets subject to floating charged in priority to
claims under the Charge :- (1) Where either a receiver is appointed on behalf of the holders
of any debentures of a company secured by a floating charge, or possession is taken by or on
behalf of those debenture-holder of any property comprised on or subject to the charge, then
if the company is not the time in course of being wound up, the debt, which in every winding
up are under the provisions of Part-V relating to preferential payments are to be paid in
priority to all other debts, shall be paid forthwith out of nay assets coming to the hands of the
receiver or the other person taking possession as aforesaid in priority to any claim for
principal or interest in respect of the debentures.
(2) The periods of time mentioned in the said provisions of Part-V shall be reckoned from the
date of the appointment of the receiver of possession being taken as aforesaid, as the case
may be.

(3) Any payments made under this section shall be recouped, as far as may be, out of the
assets of the company available for payment of general creditors.

BALANCE-SHEET, STATEMENTS, BOOKS ETC.

181. Books to be kept by company and penalty for not keeping them:-

(1) Every company shall keep proper books of account with respect to-

(a) all sums of money received and expended by the company and the matters in
respect of which the receipt and expenditure take place;

(b) all sales and purchases of goods by the company;

(c) the assets and liabilities of the company; and

(d) in the case of a company engaged in production, distribution, marketing,

transportation, processing, manufacturing, milling extraction and mining activities,
such particulars relating to utilisation of material, labour and other items of overhead
cost.

(2) For the purpose of sub-section (1), proper books of account shall not be deemed to be kept
with respect to the matters specified therein if there are not kept such books as are necessary
to give a true and fair view of the state of the affairs of the company and to explain its
transactions.

(3) The books of account shall be kept at the registered office of the company and shall at all
times be open to inspection by directors during business hours:

Provided that all or any of the books of account may, for a period not exceeding six months,
be kept at such other place in Bangladesh as the board of Directors may decide and when the
board of Directors so decides, the company shall within seven days of the decision, file with
the Registrar a notice in writing giving the full address of that other place.

(4) where a company has a branch office, whether in or outside Bangladesh, the company
shall be deemed to have complied with the provisions of sub-section (1), if proper books of
account relating to the transactions effected at the branch office are kept at that office and
proper summarised returns, made upto date at intervals of not more than three months, are
sent by the branch office to the company at its registered office or the other place referred to
in sub-section (3).

(5) The books of account of every company relating to a period of not less than twelve years
immediately preceeding the current year together with vouchers relevant to any entry in such
books of account shall be preserved in good order;

Provided that in the case of a company incorporated less than twelve years before the current
year, the books of account for the entire period preceeding the current year together with the
vouchers relevant to any entry in such books of account shall be so preserved.

(6) If any of the persons referred to in sub-section (7) fails to take all reasonable steps to
secure compliance by the company with the requirements of this section, or has, by his own
wilful act, been the cause of any default by the company thereunder, he shall, in respect of
each offence, be punishable with imprisonment for a term which may extend to six months or
with which may extend to five thousand taka or with both.

(7) The persons referred to in sub-section (6) are the following, namely:-

(a) where the company has a managing agent, managing director executive director,
general manager or manager, such managing agent, managing director, executive
director, general manager or manager and all officers but excluding the bankers,
auditors and legal advisers;

(b) where such managing agent is a firm, every partner in the firm;

(c) where such managing agent is a body corporate, every director of such body
corporate;

(d) where the company has neither a managing agent nor managing director nor
executive director nor general manager nor manager, every director of the company.

182. Inspection of books of account, etc. of companies :-

(1) The books of account and other books and papers of every company shall be open to
inspection during business hours by the Registrar or by such other Government officer as
may be authorised by the Government in this behalf.

(2) It shall be the duty of every director or other officer of the company to produce to the
person making inspection under sub-section (1), in this section referred to the inspecting
person, all such books of account and other books and other papers of the company in his
custody or control and to furnish him with any statement, information or explanation relating
to the affairs of the company as the inspecting person my require of him within such time and
at such place as he may specify.
(3) it shall also be the duty of every director and other officer of the company to give to the
inspecting person all assistance in connection with the inspection which the company may be
reasonable expected to give.

(4) The inspecting person may, during the course of inspection-

(i) make or cause to be made copies of books of account and other books; and

(ii) place or cause to be placed any marks of identification thereon in token of the
inspection having been made.

(5) Notwithstanding anything contained in any other law for the time being in force or any
contract to the contrary, inspecting person shall have the same powers as are Vested in a civil
court under the Code of Civil Procedure, 1908 (Act V of 1908), While trying a suit, in respect
of the following matters, namely:-

(i) the discovery and production of books of account and other documents, at such
place and such time as may be specified by such person;

(ii) summoning and enforcing the attendance of persons and examining them on oath:

(iii) inspection of any books, registers and other documents of the company at any
place.

(6) Where an inspection of the books of account and other books and papers of the company
has been made under this section, the inspecting person shall make a report to the
Government.

(7) The inspecting person under this section shall have all the powers that a Registrar has
under his Act in relation to the making inquiries.

(8) If default is made in complying with the provisions of this section every officer of the
company who is in default shall be punishable with imprisonment for a term not exceeding
one year and also with a five not exceeding ten thousand taka.

(9) Where a director or anyother officer of a company has ben convicted of any offence under
this section, he shall, and from the date on which he is so convicted, be deemed to have
voated his office as such and on such vacation of office he shall be disqualified for holding
such office in any company for a period of five years from such date.

183. Annual balance sheet:- (1) The Board of Directors of every company shall, at every
annual general meeting held in pursuances of section 81, lay before the company a balance
sheet together with the profit and loss account or in the case of a company not trading for
profit. an income and expenditure account for the period specified in sub- section (2) of this
section.

(2) The said profit and loss account or the income and expenditure account shall be prepared
for the flowing period, namely:-

(a) in the case of the first annual general meeting for the period beginning with the date of
incorporation of the company and ending on a date which is within nine months preceding
the date of the meeting; and

(b) in the case of any subsequent annual general meeting, for the period beginning with the
date immediately after last account and ending on a date which is-

(i) a date within none months preceeding such meeting; or

(ii) in the case of a company carrying or business or having interest outside

Bangladesh, a date within twelve months preceding the date of such meeting; or

(iii) in a case where and extension of time has been granted for holding the meeting
under section 81, a date within the said nine or twelve months, as the case may be,
preceding the date of holding such meeting under that section.

Provided that date the Registrar may, on an application being made to less before the
expiry of the said nine or twelve months, extend the period by a period not exceeding
three months.

(3) The balance sheet and the profit and loss account or income and account shall be caused
to be audited by the auditor of the company as in this Act provided and the auditor's report
shall be attached thereto or there shall be inserted at the foot thereof a reference to the report
and the report shall be read before the company in general meeting and shall be person to
inspection by any member of the company.

(4) The period to which the account aforesaid relates is referred to in this Act as a `financial
year" and it may be less or more than a calendar year, but shall not exceed fifteen months:

Provided that it may extend to eighteen months where special permission had been granted in
that behalf by the Registrar.

(5) If any person, being a director of a company, defaults in taking all reasonable to comply
with the provision of this section, then he shall, in respect of each such offence, be punishable
with fine with may extend to five thousand taka.

(6) There shall be kept at the registered office of the company a copy of the balance sheet
including profit and loss account or income and expenditure, as the case may be, and the
director's report for inspection of the members and other categories of persons as are entitled
thereto for a period of at least fourteen days before the general meeting of the company.

184. Boards report :-(1) There shall be attached to every balance sheet laid before a
company in general meeting a report by its Board of Directors, with respect to-

(a) the state of the company's affairs;

(b) the amount, if any, which the Board proposes to carry to any resvere in such
balance sheet;

(c) the amount, if any, which the Board recommends should be paid by way of
dividend;

(d) material changes and commitments, if any, affecting the financial position of the
company which have occurred between the end of the financial year of the company
to which the balance sheet related and the date of the report.

(2) The Board's report shall, so far as is material for the appreciation of the state of company's
affairs by its members, deal with any changes which have occurred during the financial years
:-
(a) in the nature of the company's business;

(b) in the company's subsidiaries or in the nature of the business carried on by them;
and

(c) generally in the classes of business in which the company has an interest.

(3) The Board shall also be bound to give the fullest information and explanations in its
report aforesaid on every reservation, qualification or adverse remark contained in the
auditor's report.

(4) The Board report and any addendum thereto shall be signed by its Chairman if he is
authorised in that behalf by the Board, and where he is not so authorised &, shall be signed
by such number of director as are required to sign the balance sheet and the profit and loss
account or the income and expenditure account, of the company by virtue of sub-section (1)
and (2) of section 189.

(5) If any person, being a director of a company, fails to take all reasonable steps to comply
with the provision of sub-section (1) to (3) or being the chairman, signs the Boards report
otherwise than in conformity with the provisions of sub-section (4), he shall, in respect of
each offence, be liable to fine which may extend to five thousand taka.
185. Form and contents of balance sheet and profit and loss accounts :- (1) The balance
sheet of a company shall contain a summary of the property and assets and of the capital and
lilabilities of the company. giving a true and fair view of affairs as at the end of the financial
year, and it shall, subject to the provisions of this section be in the forms set out in Part-I of
Schedule I. or as near thereto as circumstance admit or in such other form as may be
approved by the Government either generally or in any particular case; and in preparing the
balance sheet due regard shall be had, as far as may be, to the general instructions for
preparation of balance sheet under the heading "Notes" at the end of the Part:

Provide that nothing contained in this sub-section shall apply to any insurance or banking
company or any company engaged in the generation or supply of electricity or to any other
class of company for which a form of balance sheet has been specified in or under the law
governing such class of company.

(2) Every profit and loss account of a company shall gave a true and fair view of the profit
and or loss of the company for the financial year and shall, subject as aforesaid, comply with
the requirements of Part II of Schedule XI so far as applicable thereto:

Provided that nothing contained in this sub-section shall apply to any insurance cor banking
company or any company engaged in the generation or supply of electricity or to any other
class of company for which a form of profit and loss account had been specified in or under
the law governing such class of company.

(3) The Government may, by notification the official Gazette, example any class of
companies from the requirements of Schedule XI if, in its opinion, it necessary to grant the
exemption in the public interest; and any such exemption may be granted either
unconditionally or subject of such conditions as may be speckified in the notification.

(4) The Government may, on the application or with the consent of the Board of Directors of
the company, by order, modify in relation to that company of the requirement of this Act as
to the matters to be stated in the balance-sheet or profit and loss account for the purpose of
adopting them to the circumstances of the company;

(5) The balance sheet and the profit and loss account of a company shall not be treated as not
disclosing a true and fair view of the state of affairs of the company merely be reason of the
fact that they do not disclose-

(i) in the case of an insurance company, any matters which are not required to be
disclosed by the Insurance Act, 1938 (IV of 1938);

(ii) in the case of a banking company, any matters which are not required to be
disclosed by the
 (iii) in the case of a company engaged in the generation or supply of electrify, any
matters which are not required to be disclosed by the Electricity Act, 1910 (IX of
1910);

(iv) in the case of a company governed by any other law for the time being inf force,
any matters which are not require to be disclosed by such law;

(v) in the case of any company, any matters which are not required to be disclosed by
virtue of the provisions contained in Schedule XI or by virtue of the notification
issued under sub-section (3) or an order issued under subsection (4).

(6) For the purposes of this section, except where the context otherwise requires any
reference to balances-sheet or to profit and loss account shall include any notes hereon or
documents annexed thereto, giving information required by this Act and allowed by this Act
to be given in the form of such noted or documents.

(7) If any such person as is referred to in sub-section (7) of section 181 fails to take all
reasonable steps to secure compliance by the company, as regards any accounts laid before
the company in general meeting, with this section and with the other requirements of this Act
as to in the accounts, he shall, in respect of each offence, be punishable with imprisonment
for a term which may extend to six months or with fine which may extend to five thousand
taka or with both:

Provided that no person shall be sentenced to imprisonment for any such offence unless it
was committed willfully.

186. Balance sheet of holding company to include certain particulars as to its

subsidiaries :-(1) There shall be attached to the balance sheet of a holding company having a
subsidiary or subsidiaries as the end of the financial year as at which the holding company's
balance sheet is made out, the following documents in respect of such subsidiary or each such
subsidiary, as the case may be-

(a) a copy of the balance sheet of the subsidiary;

(b) a copy of the its profit and loss account;

(c) a copy of the report of its Board of Directors;

(d) a copy of the report of its auditors;

(e) a statement of the holding company's interest in the subsidiary as specified in sub-
section (6);

(f) the statement referred to in sub-section (80, if any; and

 (g) the report referred to in sub-section (9), if any.

(2) The balance sheet referred to in clause (a) of sub-section (1) shall be made out in
accordance with the requirement of this Act as at the end of the financial year of the
subsidiary next before the day as at which the holding company's balance sheet is made out.

(3) The profit and loss account and the reports of the Board of directors and of the auditors
referred to in clause (b), (c) and (d) of subsection (1) shall be made out in accordance with
the requirements of this Act for the financial year of the subsidiary referred to in sub-section
(2).

(4) the financial year aforesaid of the subsidiary shall not end on a day which the holding
company's financial year ends by more than six months.

(5) Where the financial year of subsidiary is shorter in duration than that of its holding
company, reference to the financial year of the subsidiary in sub-sections (2), (3) and (4) shall
be construed as reference to two or more financial years of the subsidiary the duration of
which, in the aggregate is not less than the duration of the holding company's financial year.

(6) The statement referred to in clause (e) of sub-section (1) shall specify-

(a) The extent of the holding company's interest in the subsidiary at the end of the financial
year or at the end of the last of the financial years of the subsidiary;

(b) the net aggregate amount, so far as it concerns members of the holding company and is
not dealt with in the company's accounts, of the subsidiary profits after deducting its losses or
vice-versa-

(i) for the financial year or years of the subsidiary as aforesaid; and

(ii) for the previous financial years of he subsidiary since it became the holding
company's subsidiary;

(c) the nest aggregate amount of the profits of the subsidiary after deducting its losses or vice-
versa-

(i) for the financial year or years of the subsidiary as aforesaid; and

(ii) for the previous financial years of the subsidiary since it become the holding
company's subsidiary;
so far as those profits are dealt with, or provision is made for those losses, in the company's
accounts.
(7) Clauses (b) and (c) of sub-section (6) shall apply only to profits and losses of the
subsidiary which may properly be treated in the holding company's accounts as revenue
profits or losses; and profits or losses attributable to any other of its subsidiaries shall not, for
that or any other purpose, be treated as aforesaid so far as they are profits or losses for the
period before the date of or as from which the shares were acquired by the company or any of
its subsidiaries, except that they may in a proper case be so treated where-

(a) the holding company is itself he subsidiary of another body corporate; and

(b) the shares were acquires from that body corporate or a subsidiary of this.

Explanation:- For the purpose of determining whether any profits or losses are to be treated
as profits or losses for the said period, the profits or loss for any financial year of the
subsidiary may, if it isn't practicable to apportion it with reasonable accuracy by reference to
the facts, be treated as accruing from day to day during that year and be apportioned
accordingly.

(8) Where the financial year or years of a subsidiary referred to insub-section (5)) do not
coincide with the financial year of the holding company, a statement containing information
on the followingmaters had also to be attached to the balance sheet of the holding company:-

(a) whether there had been any changes and, if so what change took place in the holding
company's interest in the subsidiary between the end of the financial year or of the last of the
financial years of the subsidiary and the end of the holding company's financial year;

(b) details of any material change, which have occurred between the end of the financial year
or of the last of the financial years of the subsidiary and the end of the holding company's
financial year in respect of

(i) the subsidiary's fixed asset;

(ii) its investments;

(iii) the moneys borrowed by its for nay purpose other than that of meeting cured
liabilities.

(9) If, for any reason, the Board of Directors of the holding company is unable to obtain
information of any of the matters requires to be specified by sub-secion (7), a report in
writing to that effect shall be attached to the balance sheet of the holding company.

(10) The document referred to in clause (e), (f) and (g) of sub- section (1) shall be signed by
the persons by whom the balance sheet of the holding company is required to be signed.
(11) The Government may on the application or with the consent of the Board of Directors of
the Company, direct that in relation to any subsidiary, the provisions of this section shall not
apply, or shall apply only to such extent as may be specified in the direction.

(12) If nay such person as is referred to in sub-section (70 of section 181 fails to take all
reasonable steps to comply with the provisions of this section, he shall, in respect of each
offence, be punishable with imprisonment for a terms which may extend to six months, or
with fine which may extent to one thousand taka, or with both:

Provided that in any proceedings against any person in respect of an offence under this
section, it shall be a defence to prove that a competent and reliable person was charged with
the duty of seeing that the provisions of this section were complied with and that he was in a
position to discharge that duty:

Provided further that no person shall be sentenced to imprisonment for any such offence
unless it was committed willfully.

187. Financial year of holding company and subsidiary:-(1) Where it appears to the
Government that it is desirable for a holding company or a holding company's subsidiary to
extent its financial year so that the subsidiary's financial year many end with that of the
holding company, and for that purpose to postpone the submission of the relevant account to
a general meeting, the Government may, on the application or with the consort of the Board
of Directors of the company whose financial year is to be extended, director that in the case
of that company, the submission of accounts to a general meeting, the holding of a general
meeting or the making of an annual return, shall not be required to be submitted or made
earlier than the dates specified in the direction not with standing anything to the contrary in
this Act or in any other law for the time being in force.

(2) The Government shall, on the application of the Board of directors of a holding company
or a holding company's subsidiary, exercise the powers conferred on its by sub-section (1), if
it is necessary to doin order to secure that the end of the financial year of the subsidiary does
not precede the end of holding company's financial year by more than six months, where that
is not the case at he commencement of his Act or at the date on which the relationship of
holding company and subsidiary comes into existence where that date is later than the
commencement of this Act.

188. Right of holding company's representatives and member:- (1) A holding company
may, by resolution authorize its representatives named in the resolution to inspect the books
of account of any such subsidiary shall be open to open to inspection by those representatives
at any time during business hours.

(2) The rights conferred by section 195 upon members of a company may be exercised, in
respect of any subsidiary, by such representative of the holding company as if they alone
were members of the subsidiary.
189. Authentication of balance sheet, profit and loss account, etc:- (1) Save as provided
by sub-section (2), every balance sheet, and every profit and loss account or income and
expenditure account shall be signed on behalf of the Board of Directors-

(i) in the case of banking company, by the manager, or managing agent, if nay, and,
where there are more than three directors of the company, by at least three of those
directors or, where there are not more than three directors, by all the directors;

(ii) in the case of any other company, by its managing agent, manager or secretary, if
any, and by not less than two directors of the company one of whom shall be the
managing director where there is one.

(2) When the total number of directors of the company for the time being in Bangladesh is
less than the number of directors whose signatures are required by sub-section (1), then the
balance sheet and profit and loss account or the income and expenditure account shall be
signed by all the directors for the time being in Bangladesh, or if there is only one director for
the time being in Bangladesh, by such director but in such case, there shall be attached to the
balance sheet, and the profit and loss account or the income and expenditure account a
statement signed by such director or directors explaining the reason for non-compliance with
the provisions of sub-section (1).

(3) The balance sheet and the profit and loss account or income and expenditure account shall
be approved by the Board of Directors before they are signed on behalf of the Board in
accordance with the provisions of this section and before they are submitted to the auditors
for their report thereon.

(4) If any copy of a balance sheet or profit and loss account or income and expenditure
account, which had not been signed as required by sub-section (1) and (2), it issued,
circulated or published or if any copy of a balance sheet it issued, circulated or published
with there being annexed or attached hereto, as the case may be, a copy of that account, any
accounts, reports or statements which, by virtue of section 186 are required to be attached to
the balance sheet, the auditors, report, and the Board's report referred to in section 185 or if
any default is made in complying with other requirement of this section the company and
every office of the company who is in default, shall be punishable with imprisonment for a
term which may extend to six months of with fine which may extend to two thousand taka or
with both.

190. Copy of balance-sheet, etc. to be filed with Registrar: (1) After the balance sheet and
profit and loss account or the income and expenditure account, as the case may be, have been
laid before a company at an annual general meeting as aforesaid, there shall be filed with the
Registrar, within thirty days from the date on which the balance sheet and the profit and loss
accounts were so laid, or where the annual general meeting of a company for any year has not
been held, there shall be filed with the Registrar within thirty days from the last day on which
that meeting should have been held in accordance with the provisions of this Act three copies
of the balance-sheet, and of the profit and loss account or the income and expenditure
account, as the case may by signed by the managing director, managing agent, a manger or
secretary of the company or if there be none of these, by a director of the company, together
with three copies of all documents which are required by this Act to be annexed or attached
to such balance-sheet or profit and loss account or income and expenditure account:

Provided that in the case of a private company, which is not an subsidiary of a public
company, no person other than a member of the company shall be entitled to inspect or to
obtain copies of the profit and loss account of that company.

(2) If the annual general meeting of a company before which a balancesheet is laid as
aforesaid does not adopt the balancesheet or, if the annual general meeting of a company for
any year has not been half, a statement of that fact and of the reasons therefor shall be
annexed to the balance-sheet and to the copies thereof required to be file with the Registrar.

(3) If a company makes default in complying with the requirements of this section, it shall be
liable to a fine not exceeding one hundred taka for every day during which the default
continues, and every office of the company who knowingly and willfully authorises or
permits the default shall be liable to the like penalty.

191. Right of members to copies of account and report:- (1) A copy every balance sheet,
including the profit and loss account, the auditors report or the income and expenditure
account and every other document required by law to be annexed or attached, as the case may
be, to the balance sheet which is to be laid before a company in general meeting shall, not
less than fourteen days before the date the meeting, be sent free of charge, to every member
of the company, to every holder of debentures issued by the company, not being debentures
which ex-facie are payable to the bearer thereof, to every trustee for the holders of any
debentures issued by the company, whether such member, holder or trustee is or is not
entitled to have notices of the general meeting of the company sent to him, and to all persons
other than such members, holders or trustees being persons so entitled:

Provide that :-

(a) in the case of a company not having a share capital, this subsection shall not require the
sending of a copy of the document aforesaid to an member, or holder of debentures, of the
company who is not entitled to have notices of general meetings of the company sent to him;

(b) this sub-section shall not require a copy of the document aforesaid to be sent-

(i) to a members, or holder of debentures, of the company who is not entitled to have
notices of general meetings of the company sent to him and of show address the
company is unaware;
 (ii) to more than one of the joint holders of any shares of debentures none of whom is
entitled to have such notices sent to him; or

(iii) in the case of joint holders of any shares or debentures some of whom are and
some of show are not entitled, to have such notes sent to them, to those who are not
entitled; and

(c) if the copies of the documents aforesaid are sent less than fourteen days before the date of
the meeting, they shall not withstanding that fact, be deemed to have been duly sent to the
members entitled to vote at the meeting if they do not raise any objection to such sending.

(2) Any member or holder of debentures of a company whether he is or is not entitled to have
copies of the company's balance sheet sent to him, shall, on demand, be entitled to be furnish
without charge, and any person from whom the company had accepted a sum of money by
way of deposit shall, on demand accompanied by the payment of fee of ten taka, be entitled
to be furnished with a copy of the last balance sheet of the company and of every document
required, by law to be annexed or attached thereto, including the profit and loss account and
the auditor's report and such documents shall be delivered to him within seven days from
such demand.

(3) If default is made in complying with sub-section (1) and (2), the company, and, also every
officer of the company who is in default, shall be punishable with fine which may extend to
five hundred taka.

(4) If, when a person makes a demand for a copy or any document with which he is entitled
to be furnished by virtue of sub-section (2) default is made in complying with the demand
within seven days after the making thereof, the company, and also every officer of the
company who is in default, shall be punishable with fine which may extend to five hundred
taka, unless it is proved that the person had already made a demand for and been furnished
with copy of the document; and in case of such default, the Court, apart from imposing the
penalty, may also, by order, direct that the copy demanded shall forthwith be furnished to the
person concerned.

(5) Sub-section (1) to (4) shall not apply in relation to a balance sheet of a private company
laid before it before the commencement of this Act and in such a case the right of any person
to have sent to him or to be furnished with a copy of the balance sheet, and the liability of the
company in respect of a failure to satisfy that right, shall be the same as they would have
been if this Act be had not been passed.

Statement to be published by Banking and certain other companies:-

192. Certain companies to publish statement in schedule:-(1) Every company being a

limited Banking company or an insurance company for a deposit, provident or benefit society
shall, before, it commences bushiness, and also on the first Monday in February and the First
Monday in August in every year during which it carries on business make a statement herein
after referred to as the said statement in the form as in Schedule XII, or as near thereto as
circumstances will admit.

(2) A copy of the said statement together with a copy of the last audited balance sheet laid
before the members of the company shall be displayed and, until the display of the next
following statement, kept displayed in a conspicuous place in
the registered office of the company, and in every branch office or place where the business
of the company is carried on.

(3) Every member and every creditor of the company shall be entitled to a copy of the sum
statement on payment of a sum not exceeding five taka.

(4) If a company makes default in complying with the requirements of this section, it shall be
liable to a fine not exceeding one hundred taka for everyday during which the default
continues; and, also every officer of the company who knowingly and willfully authorises or
permits the default shall be liable to the like penalty.

(5) This section shall not apply to a life insurance company or provident insurance society, to
which the provisions of the Insurance Act, 1938 (IV of 1938), or any other insurance law for
the time being in force as to the annual statement to be made by such company or society
apply with or without modification, if the company or society complies with those provisions.

Investigation by the Registrar

193. Power of Registrar to call for information or explanation: - (1) Where the Registrar,
on perusal of any document which a company is required to submit to him under the
provision of this Act, or on receipt of a written objection against an such documents from any
member of the company, is of opinion that any information explanation is necessary in order
that such document may afford full particulars of the matter to which it purports to relate, he
may, by a written order, call on the company to furnish in writing such information or
explanation or to produce such books or papers, as may be required by him within such time
as he may specify in his order.

(2) On the receipt of an order under sub-Section (1), it shall be the duty of all persons who are
or have been officer of the company to furnish such information or explanation (1) to the best
of their power.

(3) If an such person refuse or neglects to furnish any such information or explanation, he
shall be liable to a fine not exceeding five hundred take in respect of each offence and the
Court may, on the application of the Registrar and upon notice to the company, make an
order on the company for production of such document as in its opinion may reasonable be
Required by the registrar for his investigation and allow the Registrar inspection thereof on
such terms and conditions as it thinks fit.

(4) On receipt of such information or explanation, the Registrar may annex the same to the
original document submitted to him and any additional document so annexed by the Registrar
shall be subject to the like provisions as to inspection and the taking of copies as the original
documents are subject.

(5) If such information or explanation or additional document is not furnished within the time
specified by the Court or the Registrar, or if after per*sual of such information or explanation
or additional document; the Registrar is of opinion that the document in question discloses an
unsatisfactory state of affairs, or that it does not discloses an unsatisfactory state of affairs, or
that it does not disclose a full, fair, and true, statement of the matters to which it purports to
relate, the Registrar may direct the company to correct the documents in the manner directed
by him or may report in writing the circumstances of the case to the government.

(6) If it is represented to the Registrar on materials placed before him by any member
contributory, creditor or any other person interested that the business of a company is being
carried on in fraud of its member, creditors or persons dealing with the company or for a
fraudulent purpose that the affairs of the company are not being managed in accordance with
the provisions of this Act, he may after giving the company an opportunity of being hear, by
a written order, call on the company for information or explanation on matters specified in
the order or required the company to produce any document with such time as he may specify
in the order and the provision of sub-section (2), (3) and (5) of this section shall apply to such
order.

(7) If upon investigation, the Registrar is satisfied that any representation on which he had
taken action under sub-section (6) is false, frivolous or vexatious, he shall disclose the
identify of the informant to the company.

(8) The provisions of this section shall apply mutatis mutatis to documents which a liquidator
is require to file under this Act.

194. Seizure of document by Registrar :- (1) Where upon any information, the Registrar
has reasonable ground to believe that books and papers of or relating to and company or other
body corporate or any managing agent or managing director or manager of such company or
other body corporate, or any associate of such managing agent or managing director or
manager may be destroyed, mutilated, falsified or secreted the Registrar may make an
application to the Magistrate of the first class have jurisdiction for an order for the seizure of
such books and papers.

(2) After considering the application and hearing the Register. if necessary, the Magistrate
may, be order, authorise the Registrar-
 (a) to enter, with such assistance as may be required, the place or places where such
books and papers are kept;

(b) to search that places or those place in the manner specified the order;

(c) to seize such books and papers as he considers necessary.

(3) The Registrar shall return the books and papers seized under this cection as soon as may
be, and in any case not later than the thirtieth day, after such seizure, to the company, or the
other body corporate, or as the case may be, to the managing agent or the associate of such
managing agent or managing director or the manager or the associate of such managing agent
or managing director or manager or any other person, from whose custody or power they
were seized, and shall inform the Magistrate of such return:

Provided that the Registrar may, before returning such books and papers as aforesaid, take
copies of, or extracts from, them or place indemnification marks on them or any part thereof
or ideal with them in such other manner as he considers necessary.

(4) Save as otherwise provided in this section, every search or seizure made under this section
shall be carried out in accordance with the provision of the Code of Criminal Procedure, 1898
(Act V of 1898) relating to search or seizure, made under that Code.

Inspection and Audit

195. Investigation of affairs of company by inspectors:- The Government may appoint one
or more competent inspectors to investigate the affairs of any company and to report thereon
in such manner as the Government may direct-

(a) in the case of a company having a share capital, on the application of members holding
not less than one-tenth of the shares issues;

(b) in the case of a company not having a share capital, on the application of not less than
one-fifty in number of the person on the company is register of members;

(c) in the case of any other company, on a report by the Registrar undersection 193(5).

196. Application for inspection to be supported by evidence :- An application by members

of a company under section 195 shall be supported by such evidence as the Government may
require for the purpose of showing that the applicants have good requiring for requiring the
investigation; and the Government may also, before appointing an inspector, require the
applicants to give security for payment of the costs of the inquiry.
197. Inspection of books and examination of officers:- Without prejudice to its powers
under section 195, the Government-

(a) shall appoint one or more competent persons as inspectors to investigate the affairs of a
company and to report thereon in such manner as the Government may direct, if the
company, by a special resolution or, the Court, by an order, declares that the affairs of the
company ought to be investigated by an inspector-appointed by the Government; and

(b) may do so if, in the opinion of the Government, there are circumstances suggesting-

(i) that the business of the company is being conducted with intent to defraud its
creditors, members any other persons, or otherwise for a fraudulent or unlawful
purpose, or in a manner oppressive of any of its members, or that the company was
formed for any fraudulent or unlawful purpose; or

(ii) that persons concerned in the formation of the company or the management of its
affairs have in connection therewith been guilty of fraud, misfeasance or other
misconduct toward the company or towards may of its members; or

(iii) that the members of the company have not been given all the informations with
respect to its affairs which they might reasonable expect.

198. Firm, body corporate or association not to be appointed inspect :- No firm, body
corporate or other association shall be appointed an inspector under section 195 or section
197.

199. Powers of inspectors to carry investigation into affairs of related companies or of

managing agent or associate :- (1) If any inspector appointed under section 195 or 197 to
investigate the affairs of a company thinks it necessary, for the purposes of his investigation,
to investigate also the affairs of-

(a) any other body corporate which is, or was at any relevant time the company's subsidiary
or holding company's or a subsidiary of its holding company, of a holding company, of its
subsidiary.

(b) an other body corporate which is to has at any relevant time been managed-

(i) by any person as managing agent, or as managing director or as manager, who is,
or was at the relevant time, either the managing agent or the managing director or the
manager of the company: or

(ii) by any person who is or was at the relevant time as associate of the managing
agent; or
 (iii) by any person of whom the managing agent is, or was at the relevant time, as
associate; or

(c) any other body corporate which is, or was at any relevant time, managed by the company
or whose Board of Director comprises of nominees of the company or is accustomed to act in
accordance with the direction of-

(i) the company, or

(ii) any of the directors of the company, or

(iii) any company whose directorship is held by the employee of nominees of those
having the control and management of the first mentioned company; or

(d) any person, who is, or was at any relevant time, the company's managing agent, managing
director or manager of an associate of such managing agent,

then the inspector shall, subject to the provision of sub-section (2), have power to investigate
and shall report on the affairs of the other body copperplate, the managing agent, managing
director, manager or associate of the managing agent, as for as he thinks that the result of his
investigating thereof are relevant to the investigation of the affairs of the first-mentioned
company.

(2) In the case of any body corporate or person referred to in clause (b) (ii) (iii), (c) or (d) of
sub-section (1), the inspector shall not exercise his affairs without first having obtained the
prior approval of the government thereto:

Provided that before according approval under this sub-section, the Government shall give
the body corporate or persons a reasonable opportunity to show cause as to why such
approval shall not be accorded.

200. Production documents and evidence :- (1) It shall be the duty of all officers and
employees and agents of the company, and where the company is or was managed by a
managing agent, and where the affairs of any other body corporate or of a managing agent or
of an associate of a managing agent are investigated by virtue of section 199, of all officers
and employees and agents of such body corporate, managing agent or associate, and where
such managing gent or associate is or was a firm of all partners in the firm

(a) to preserve and to produce to the inspector or any person authorised by him in this
behalf with the previous approval of the government, all books and papers of, or
relating to, the company or, as the case may be, of or relating to the other body
corporate, managing agent or associate which are in their custody or powers; and
 (b) otherwise to give to the inspector all assistance in connection with the
investigation which they are reasonably able to give.

(2) The inspector may, with the previous approval of the Government, require anybody
corporate other than a body corporate referred to in sub-section (1) to furnish such
information, or produce such book, and papers before, him or any person authorised by him
in this behalf with the previous approval of the Government as he may consider necessary, if
the furnishing of such information or the production of such books and papers is relevant or
necessary for the purposes of his investigation.

(3) The inspector may keep in his custody any books and papers produced under sub-section
(1) or (2) for six months and thereafter shall return the same to the company, body corporate,
firm or individual by whom or on whose behalf the books and papers are produced:

Provided that the inspector may again call for the books and papers if they are needed again:

Provided further that if certified copies of the books and papers produced under sub-section
(2), are furnished to the inspector, he shall return those books; and papers to the body
corporate concerned.

(4) An inspector may examine on oath any of the persons referred to in sub-section (1) or
with the previous approval of the Government, any other person, in relation to the affairs of
the company, other body corporate, managing agent or associate, as the case may be, and
may administration oath accordingly and for that purpose may require any of those persons to
appear before him personally.

(5) If any person fails without reasonably cause or refuses-

(a) to produce to an inspector or an person authorise by him in this behalf with the
previous approval of the Government any books or paper which it is his duty under
sub-section (1)) or (2) to produce; or

(b) to furnish any information which it is duty under sub-section (2) to furnish; or

(c) to appear before the inspector personally when required to do so under sub-section
(4) or to answer any question which is put to him by the inspector in pursuance of that
sub-section ; or

(d) to sign the notes of any examination referred to in sub-section (6), he shall be
punishable white imprisonment for a terms which may extend to six months, or with
fine which may extend to five thousand take, or with both, and also with a further fine
which may extend to five hundred take for every day after the first during which the
failure or refusal continues.
(6) Notes of any examination under sub-section (4) shall be taken down in writing and shall
be read ever to, or by, and signed by, the person examined, and may thereafter be used in
evidence against him.

(7) In this section-

(a) the expression "officers" in relation to any company or other body corporate,
included any trustee for the debenture holders such of company or body corporate;

(b) the expression "agent" in relation to any company, other body corporate or person,
means, any one acting or purporting to act for or on behalf of such company, body
corporate or person, and includes the bankers, and legal advisers of, and persons
employed as auditors by such company, body corporate or person; and

(c) any reference to officers and employees, agent or partners shall be construed as a
reference to past as well as present officers and other employees, agent or partners, as
the case may be.

201. Seizure of document by inspectors:- (1) Where in the course of investigation under
section 195 or section 197, the inspector has reasonable ground to believe that the books and
papers of, or relating to, any company or other body corporate or any managing agent or
managing director or manager of such managing agent may be distorted, mutilated, altered,
falsified or secreted the inspector may make an application to the Magistrate of the First
Class having jurisdiction for an order for the seizure of such books and papers.

(2) After considering the application and hearing the inspector, if necessary, the Magistrate
may be order authorise the inspector-

(a) to enter, with such assistance as may be required, the place or places where such
books and papers are kept;

(b) to search that place or those places in the manager specified in the order; and

(c) to seize books and papers he considers necessary for purposes of his investigation.

(3) The inspector may keep in his custody the books and papers seized under this section for
such period not later than the conclusion of the investigation as he considers necessary and
thereafter shall return the same to the company or the other body corporate or, as the case
may be, to the managing agent or the associate of such managing agent or the managing
director or the manager or any other person from whose custody or power they were sized
and shall inform the Magistrate of such return:

Provided the the inspector may, before returning such books and papers as aforesaid, place
identification makes on them or any part thereof.
(4) Save as otherwise provided in this section, every search or seize made under this section
shall be carried out in accordance with the provision of the Code of Criminal Procedure, 1898
Act, (V of 1898) relating to search of seizure made
under the Code.

202. Inspector's report :- (1) Inspectors may, and if so directed by the Government shall,
make interim reports to the Government, and on the conclusion of the investigation, shall
make a final report to the Government; and any such report shall be written or printed, of the
Government may direct.

(2) The Government-

(a) shall forward a copy of the final report to the company at its registered office, and also to
any other body, corporate, managing agent, or associate if dealt with in the report by virtue of
section 199;

(b) may, if it thinks, fit furnish a copy thereof, on request and on payment of the prescribed
fee, to any person

(i) who is a member of the company or other body corporate including a managing
agent or associate of a managing agent where such managing agent or associate is a
body corporate dealt with in the report by virtue of section 199;

(ii) who si a partner in the firm where such managing agent or associate is a firm;

(iii) whose interest as a creditor of the company, other body corporate, managing
agent or associate aforesaid appears to the Government to be affected;

(c) shall, where the inspectors are appointed under clause (a) or (b) of section 195, furnish at
the request of the applicants for the investigation a copy of the report of them;

(d) shall, where the inspectors are appointed under clause (a) of section 197 in pursuance of
and order of the Court, furnish a copy of the report to the Court; and

(e) may also cause the report to be published.

203. Prosecution- (1) If, from any report made under section 202 it appears to the
Government that any person has, in relation to the company or in relation to any other body
corporate, managing agent, or associate of other body corporate, managing agent, or associate
of a managing agent whose affairs have been investigated by virtue of section 199. been
guilty of any offence for which he is criminally liable, the Government may prosecture such
person for the offence; and
It shall be the duty of all officer and employees and agents of the company, body corporate,
managing agent or associate, as the case may be, other than the accused in the proceedings, to
give the Government all assistance in connection with the prosecution which they are
reasonably able to give.

(2) Subsection (7) of section 200 shall apply for the purpose of this section as it applies for
the purposes of that section.

204. Application for winding up of company or an order in that behalf- if any such
company or other body corporate or any such managing gaent, or associate, being body
corporate, as is mentioned in section 199, is liable to be wound up under this Act, and it
appears to the Government from any such report as aforesaid that it is expedient so to do by
reasons of any crrcumstances as are referred to in sub- clause(i) or (ii) of clause (b) of section
197, the Government may, unless the company, body corporate, managing agent or associate
is already being wound up by the Court, cause to be presented to the Court by the Registrar;

(a) a petition for the winding up of the company, body corporate, managing agent, or
associate on the ground that it is just and equitable that it should be wound up;

(b) an application for an order under section 233;

(c) both a petition and an application as aforesaid.

205. Proceedings for recovery of damages or property-(1) If from any report made under
section 201 it appears to the Government that proceedings ought, in the public interest, to be
brought by the ompany or anybody corporate whose affairs have been invested in pursuance
of clause (a), (b) or (c) of section 199.

(a) for the recovery of damages in repeat of any fraud, misfeasance or other
misconduct in connection with the promotion or formation, or the management of the
asairs, or such company of body corporate; or

(b) for the necessary of any property of such company, or body corporate, which has
been misapplied or wrongfully retained:

the Government may itself bring preceding for such purpose in the name of such company or
body corporate.

(2) The Government shall indemnify such company or body corporate against any costs or
expencess incurred by it in, or in connection with any proceedings brought by virtue sub-
section (1), if such proceedings is found to be frivolous.

206. Expenses of investigation -(1) The expenses of and incidental to an invesgatin by an

inspector appointed by the Government under section 195 or 197 shall be defrayed in the first
instance by the Government; but the following persons shall, to the extent mentioned below,
be liable to reimburse the Government in respect of expenses of such investigation :-

(a) any persons who is convicted on a prosecution instituted in pursuance of section 203, and
who is ordered to pay damages or restore any property in the proceedings brought by virtue
of section 205, may, in the some proceedings be ordered to pay the said expenses to such
extent as may be specified by the court convicting such person, or ordering him to pay such
damages or restore such property, as the case may be;

(b) in any company or body corporate in whose name proceedings are brought under section
205 (1) shall be liable to pay the cost of the investigation but not exceeding the amount or
value of any some or property recovered by it as a result of the proceedings; and

(c) unless, as a result of the investigation, a prosecution is instituted in pursuance of section

203-

(i) any company, body corporate, managing agent, associate, managing director or
manager dealt with by report of the inspector shall be liable to reimburse the
government in respect of the whole expenses, unless and except in so far as the
Government otherwise directs; and

(ii) the application for the investigation, where the inspector was appointed under
clause (b) of sub-section (i) shall be a first charge on the sums or property mentioned
in that clause.

(3) The amount of expenses in respect of which any company, body corporate, managing
agent, associate, managing director or manager is liable under sub-clause (i) of clause (c) of
sub-section (1) to reimburse the Government, shall be recoverable from that company, body
corporate, managing agent, associate, managing director or manager, ask an arrears of land
revenue.

(4) for the purposes of this section, any costs or expenses incurredely the Government in or in
connection with proceedings brought by virtue section 205 including expenses incurred by
vi*ture of sub-section (2) thereof shall be treated as expenses of the investigation giving rise
to the proceedings.

(5) Any liability to reimburse the Government imposed by clause (a) and (b) of sub-section
(1) shall, subject to satisfaction of the right of the Government to reimbursement, be a
liability also to indemnify all persons against liability under clause (c) of that sub-section.

(6) Any such liability imposed by clause (a) of subsection (1) shall, subject to the right of the
Government as to reimbursement, be a liability also to indemnify all persons against liability
under clause (b) of the said sub-section.
(7) Any person liable under the clause (a) or (b) or (c) of sub- section (1) shall be entitled to
contribution from any other persons liable under the same clause or claises as the case may
be, according to the amount of their respective liabilities thereunder.

(8) In so far as the expenses to be defrayed by the Government under this section are not
recovered thereunder, they shall be paid out of moneys provided by Parliament.

207. Power of company to appoint inspectors-(1) A company may, by a special resolution,

appoint inspectors to investigate its affairs.

(2) Inspectors so appointed shall have the same powers and duties as inspectors appointed by
the Government, except that, instead of reporting to the government, they shall report in such
manner and to such persons as the company in general meeting may direct.

(3) All persons who are or were officers of the company shall incur the penalties in case of
refusal to produce any book or document required to be produced to inspectors so appointed,
or to answer any question, as they would have incurred if the inspectors had been appointed
by the Government.

208. Report of the inspectors to be evidence.- a copy of the report of any inspector
appointed under this Act authenticated by the seal of a company whose affairs they have
investigated, shall be admissible in any legal proceeding as evidence of the opinion of the
inspector in relation to any matter contained in the report.

209. Saving for legal adviser and bankers-Nothing in section 193 to 206 shall require the
disclosure to the Registrar or to the Government or to any inspector appointed by the
Government-

(a) by a legal adviser, of any privileged communication made to him in that capacity, except
as respect the name and address of his client; or

(b) by the bankers of any company, other body corporate, managing agents, or associate of he
managing agent or managing director or manager referred to in the sections aforesaid, as such
bankers of any information as to the affairs of any of there customers.

210. Appointment and remuneration of auditors-(1) Every company shall, at each annual
general meeting appoint an auditor or auditors to hold office from the conclusion of that
meeting until the next annual general meeting and shall within seven days of the
appointment, give intimation thereof to every auditor so appointed:

Provided that no person can be appointed auditor of any company unless his written consent
has been obtained prior to such appointment or re-appointment.
(2) Every auditor appointed under sub-section (1) shall, within thirty days of the receipt from
the company of the intimation of hi appointment, inform the Registrar in writing that he has
accepted, or refused to accept, the appointment.

(3) At any annual general meeting a retiring auditor, by whatsoever authority appointed, shall
be reappointed, unless-

(a) he is not qualified for re-appointment; or

(b) he has given the company notice in writings of his unwillingness to be re-
appointed; or

(c) a resolution has been passed at that meeting appointing somebody else instead of
him or providing expressly that he shall not be re-appointed:

Provided that for the purpose of passing a resolution under clause (c), a notice thereof shall in
accordance with section 211 be issued prior to the meeting, and such resolution cannot be
passed except on the ground of death, incapacity or dishonesty of disqualification of the
retiring auditor,

(4) if an appointment of an auditor is not made at an annual general meeting, the Government
may appoint a person to fill the vacancy.

(5) The company shall, within seven days of the Governments power under sub-section (4)
becoming exercisable, give notice of that fact to the Government; and, if a company fails to
give such notice, the company, and also every officer of the company who is in default, shall
be punishable with fine which may extent to one thousand take.

(6) The first auditor or auditors of a company shall be appointed by the Board of Directors
within one months of the date of Registration of the company, and the auditor or auditors so
appointed shall hold office until the conclusion of the first annual general meeting:

Provided that-

(a) the company may, at a general meeting remove any such auditor or all or any of
such auditors and appoint in his or their place any other persons or persons who have
been nominated for appointment by any member of the company, and or whose
nomination notice has been given to the members of the company not less than
fourteen days before the date of the meeting: and

(b) if the Board of Directors fails to exercise its powers under this sub-section, the
company in a general meeting, may appoint the first auditor or auditors.
(7) The Board may fill any casual vacancy is the office of any auditor, but while any such
vacancy continues, the remaining auditor or auditors, if any, many act:

(8) Any auditor appointed in a causal vacancy shall hold office until the conclusion of the
next annual general metting.

(9) Except as provided in the process pursuant to sub-section (7), any auditor appointed under
his section may be removed
from office before the expire of his term only by a special resolution of the company in the
general meeting.

(10) the remuneration of the auditors of a company-

(a) in the case of an auditor appointed by the Board or the Government, shall be fixed
by the Board or the Government respectively : and

(b) subject to clause (a), shall be fixed by the company in the general meting or in
such manner as the company in the general meeting may determine.

(11) for the purposes of sub-section (10), any sums paid by the company in respect of the
auditors expenses shall be deemed to be included in the expression "remuneration".

211. Provisions as to resolutions for appointing or removing auditors:-(1) Special notice

shall be required for a resolution at an annual general meeting appointing as auditor a person
other than a retiring auditor, or providing expressly that a retiring auditor shall not be re-
appointed.

(2) On receipt of such notice the company shall forthwith send a copy thereof to the retirning
auditor,

(3) Where such notice is given and the retiring auditor makes with respect thereto
representation in writing to the company and requests their notification to members of the
company, the company shall, unless the representation are received by it too late for it to do
so-

(a) in any notice of the resolution given to members of the company, state the fact of
the representation having been made; and

(b) send a copy of the representation to every member of the company to whom notice
of the meeting is sent, whether before or after the receipt of the representation by the
company, and if a copy of the representation, is not sent as aforesaid because the were
received too late or because of the company default, the auditor may, without
prejudice to his right to be heard orally, require that the representation shall be read
out at the meeting.
Provided that copies of the representation need not be sent out and the representations need
not be read out at the meeting if, on the application either of the company or of any other
person who claims to be aggrieved, the court is satisfied that the rights conferred by this sub-
section are being abused to secure needless publicity for defamatory matter; and the Court
may order the company's costs on such an application to be paid whole or in part by the
auditor, notwithstanding that he is not a party to the application.

(4) sub-section (2) and (3) shall apply to a resolution to remove the first auditors or any of
them under sub-section (6) of section 210 or to the removal or any auditor or auditors under
sub-section (8) of that section, as they apply in relation to are solution that a retiring auditor
shall not be re-appointed.

212. Qualification and disqualification of auditors:-(1) No persons shall be appointed an

auditor of any company unless he is a "chartered accountant" within the meaning of the
Bangladesh Chartered Accountants Order, 1973, (P.O. No. 2 of 1973):

Provided that a firm whereof all the partners practising in Bangladesh are qualified for
appointment as aforesaid may be appointed by its firm name to be auditor of company in
which case any of the auditors so practising may act in the name of the firs.

(2) None of the following persons shall be qualified for appointment as auditor of a company
namely-

(a) an officer or employee of the company;

(b) a person who is partner, or who is in the employment of an officer or employee of

the company;

(c) a person who is indebted to the company for an amount exceeding one thousand
taka, or who had given any guarantee or provided any security in connection with the
indebtedness of any third person to the company for an amount exceeding one
thousand taka:

(d) a person who is director or member of a partner company, or a partner of a firm,

which is the managing agent of the company;

(e) a person who is a director, or the holder of shares exceeding five percent in
nominal value of the subscribed capital, of any body corporate which is the managing
agent of the company.

Provided that where any shares held by a person as nominee or trustee for any third person
and in which the holder has no beneficial interest such shares shall be excluded in computing
the extent of the subscribed capital for the purpose of this clause.
Explanation :- For the purposes of this sub-section the word "officer" or "employee" shall
not in include an auditors.

(3) A person shall not be qualified for appointment as an auditor of a company, if-

(a) he, according to sub-section (2)0, is disqualified for appointment as auditor of any
other body corporate which is that company's subsidiary or holding company or a
subsidiary of that company's holding company's;

(b) he would be disqualified for such appointment, had the said body corporate been a
company.

(4) If an auditor becomes subject, after his appointment to any of the disqualification's
specified in sub-section (2) and (3), he shall be deemed to have vacated his office as such.

213. Power and duties of auditors:- (1) Every auditor of a company shall have a right of
access at all times to the books and accounts and vouchers of the company, whether kept at
the head office of the company or elsewhere and shall be entitled to require from the officers
of the company such information and explanation as the auditor may think necessary for the
performance of his duties as auditor.

(2) Without prejudice to the provisions of sub-section (1), the auditor shall, in particular
inquire into following namely:-

(a) Whether loans and advances made by the company on the basis of security have
been properly secured and whether the terms on which they have been made are not
prejudicial to the interests of the company or its members:

(b) Whether transactions of the company which are represented merely as book-
entries are prejudicial to the interests of the company;

(c) where the company is not an investment company or a banking company, whether
so much of the assets of the company as consist of shares, debentures and other
seeurities, have been sold at a price less than at which they were purchased by the
company;

(d) whether loans and advances made by the company have been shown as deposits;

(e) whether personal expenses have been charged to revenue account;

(f) where it is stated in the books and paper of the company that any shares have ben
allotted for cash, whether cash has actually been received in respect of such allotment,
 and if no cash has actually been so received, whether the position as stated in the
account books and the balance sheet is correct, regular and not misleading.

(3) The auditor shall make a report to be presented in the annual general meeting of he
company on the accounts, examined by him, and on every balance sheet and profit and loss
account and on every other document declared by this Act to be part of or annexed to the
balance sheet or profit and loss accounts which are laid before the company in general
meeting during his tenure of office and the report shall state whether, in his opinion and to the
best of his information and according to the explanation given to him, the said accounts give
the information required by this Act in the manner so required and give a true and fair view-

(a) in the case of the balance sheet, of the state of the company's affairs as at the end
of its financial year;

(b) in the case of the profit and loss account, of the profit or loss for its financial year.

(4) The auditors report shall also state-

(a) whether he has obtained all the information and explanation which to the best of
his knowledge and belief were necessary for the purposes of his audit;

(b) whether, in his opinion, proper books of account as required by law have been
kept by the company so far as appears from his examination of those books and
proper returns adequate for the purposes of his audit have been received from
branches not visited by him;

(c) whether the company's balance sheet and profit and loss account dealt with by the
report are in agreement with the books of account and returns.

(5) There any of the matters referred to in clauses(a) and (b) of sub- section (3) or in clauses
(a), (b) and (c) of sub-section

(4) are answered in the negative or with a qualification, the auditoris report shall state the
reason for the answer.

(6) The Government may, be general or special order, direct that in the case of such class or
description of companies as may be specified in the order, the auditors report shall also
include a statement on such matters as may be specified therein.

(7) The accounts of a company shall not be deemed as not having been and the auditors
reportt shall not state that those accounts have not been, properly drawn up on the ground
merely that the company has not disclosed certain matters, of-
 (a) those matters are such as the company is not required to disclose by virtue of any
provision contained in this Act or any other law for the time being in force; and

(b) those provisions are specified in the balance sheet and loss account of the
company.

214. Audit of accounts of branch office of company:-(1) Where a company has a branch
office, the accounts of that office shall, be audited by the company's auditors at their option,
or where the branch office is situated in a country outside Bangladesh, the accounts of the
office shall be audited either by the company's auditor or by a person duly qualified to act as
an auditor of the accounts of the branch office in accordance with the laws of that country, if
so decided by the shareholders in a general meeting.

(2) Where the accounts of any branch office are audited by a person other than the company's
auditor, the company's auditor

(a) shall be entitled to visit the branch office, if he deems it necessary to do so for the
performance of his duties as auditor; and

(b) shall have a right of access at all times to be books and accounts and vouchers of
the company maintained at the branch office;

Provided that in the case of a banking company having a branch office outside Bangladesh, is
shall be sufficient if the auditor is allowed access to such copies of, and extracts from the
books and accounts of the branch as have been transmitted to the principal office of the
company in Bangladesh.

215. Signature of audit report, etc:- Only the person appointed as auditor of the company,
or where a firm is so appointed in pursuance of the proviso to sub-section (1) of section 212,
only a partner in the firm practising in Bangladesh shall put his signature on the auditor's
report, or any other document required of the company by law to be signed or authenticated
by the auditor.

216. Reading and inspection of auditor's report:- The auditors report shall be read before
the company in general meeting and shall be open to inspection by any member of the
company.

217. Right of auditor to attend general meeting-All notices of an other communications

relating to any general meeting of a company which any member of the company is entitled
to have sent to him shall also be forwarded to the auditor of the company, and the auditor
shall be entitled to attend any general meeting and to be heard at any general meeting which
he attends on any part of the business which concerns him as auditor.
218. Penalty for non-compliance with section 211 to 217- If default is made by a company
in compalying with any of the provisions contained in section 211 to 217, the company, and
also every officer of the company who is in default, shall be punishable with fine with which
may extend to one thousand taka.

219. Penalty for non-compliance by auditor with section 213 and 215.- If any auditors
report is made or any document of the company is signed or authenticated otherwise than in
conformity with the requirement of sections 231 215, the auditor concerned, and any other
person, who signs the report or signs or authenticates the document, shall if the default is
wilful, be punishable with fine which may extend to one thousand taka.

220. Audit of certain matters by Cost and Management Accountants.- (1) where in the
opinion of the Government, it is necessary to do in relation to any company required under
clause-(d) of sub-section (1) of section 181 to include in its books of accounts the particular
referred to therein the Government may, by order, direct that an audit of cost accounts of the
company shall be conducted in such manner as may be specified in the order by an auditor
who shall be a Cost and management accountant" within the meaning of the Cost and
Management Accounts Ordinance, 1977 (L III of 1977).

(2) An audit conducted by an auditor under this section shall be in addition to an audit
conducted by an auditor appointed under section 210.

(3) The provisions relating to audit of a company specified in this Act mutatis mutandis, and
so far as they are applicable, apply to an audit conducted under this section.

221. Right of preference shareholders and debenture holders as to receipts and

inspection of reports, etc:- (1) Holders of preference shares debenture holders of a company
shall have the same right to receive and inspect the balance sheets and profit and loss account
of the company and the reports of the auditors and other reports as is possessed by the holders
of ordinary shares in the company.

(2) This section shall not apply to a private company, nor to a company registered before the
commencement of this Act:-

Provided that in the case of any public company whether registered before on after the
commencement of this Act, the trustees for holders of debentures shall have the right
conferred sub-section(1).

Carrying on business with less than the legal minimum of members.

222. Liability for carrying on business with fewer than seven or, in the case of a private
company, two members:- If at any time the number of members of a company is reduced, in
the case of a private company, below two or, in the case of any other company, below seven
and it carries on business for more than six mouths, while the number is so reduced every
person who is a member of the company during the time that it so carries or business during
that periods and is cognisant of the fact that it is carrying on business with fewer than two
members or seven members, as the case may be, shall be individually liable for the payment
of the whole debts of the company contracted during that time and may be used for the same
without joinder in the suit of any other member. Service and Authentication of Documents

223. Service of documents on company:- A document may be served on a company by

leaving it at, or sending it by post to, the registered office of the company.

224. Service of documents of Registrar:- A document may be served on the Registrar by

sending it to him by post, or delivering it to him, or by leaving it for him, at his office.

225. Authentication of documents:- A document or proceeding requiring authentication by

a company may be signed by a director, secretary or other authorsied officer of the company,
and need not be under its common seal. Schedules and Rules as to prescribed matters

226. Application and alteration of schedules and power to make rules as to prescribed
matters:-(1) The forms specified in Schedules VI to XII or forms as near thereto as
circumstances admit shall be used in all matters to which those forms refer.

(2) The Government may alter any of the Schedules except Schedule II

(3) Any alteration made under sub-section (2) shall be published in the official Gazette and
on such publication the Schedules so altered shall have effect as if enacted in this Act, but no
alteration made by the Government in Schedule I, shall affect any company registered before
the alteration as respects that company or any portion of that Schedule.

(4) In addition to the powers herein before conferred by this section, the Government may
make rules providing for all or any maters which by this Act are to be prescribed by its
authority.

(5) Every such rule shall be published in the official Gazette, and on such publication shall
have effect as if enacted in this Act.

Arbitration and Compromise

227. Power of companies to refer matters to arbitration.-(1) A company may by written

agreement, refer to arbitration, in accordance with the arbitration act, 1940 (X of 1940), on
existing or future difference between itself and any other company or person.

(2) Companies may delegate to the arbitrator power to settle any terms or to determine any
matter capable of being lawfully settled or determined by the companies themselves, or by
their director or other managing body.
(3) The provision of the Arbitration Act, 1940 (X of 1940), shall apply to all arbitration's
between companies and persons in pursuance of this Act.

228. Power to compromise with creditors and members.-(1) Where a compromise or

arrangement is proposed between the company and its members or any class of them, the
Court may, on the application in summary way of the company or of any creditor or member
of the company or, in the case of a company being wound up, of the liquidator, order a
meeting of the creditors or class of creditors, or the members of the company or class of
members, as the case may be, to be called, held and conducted in such manner as the Court
directs.

(2) If a majority in mumber representing three-fourths in value of creditors, or of members as

the case may be, present either in person or by proxy at the meeting, agree to any
compromise or arrangement, the compromise or arrangement shall if sanctioned by the Court
be binding on all the creditors or the class of creditors, on or all the members or class of
members, as the case may be, and also on the company, in the case of a company in the
course of being wound up, on the liquidator and contributories of the company.

(3) An order made under sub-section (2) shall have no effect until a certified copy of the
order has been filed with the Registrar, and copy of every such order shall be annexed to
every copy of the memorandum of the company issued after the order has been made, or in
the case of a company not having a memorandum, of every copy so issued of the instrument
constituting or defining the constitution of the company.

(4) If a company makes default in complying with sub-section(3), the company and also
every officer of the company, who is knowingly and willfully in default, shlall be liable to a
fine not exceeding fifty take for each copy in respect of which the default is made.

(5) The Court may, at anytime after an application has been made to it under this section, stay
the commencement or continuation of any suit or proceeding against a company on such
terms as it thinks fit and proper until the application is finally disposed of.

(6) In this section, her expression "company" means any company liable to be wound up
under this Act and the expression "arrangement" includes a reorganisation of the share capital
of the company by the consolidation of shares of different classes or by the division of shares
into shares of different classes or by both, those methods and, for the purposes of this section
unsecured creditors who may have filed suits or obtained decrees shall be deemed to be of the
same class as other unsecured creditors.

(7) An appeal shall lie from any order made by the Court exercising original jurisdiction
under this section to the authority authorised to hear appeals from the decision of the Court.

229. Provisions for facilitating arrangements and compromises.-(1) Where an application

is made to the Court under section 228 for the sanctioning of a compromise or arrangement
proposes between a company and any such persons as are mentioned in that section, and it is
shown to the court that the compromise or arrangement has been proposed for the purposes
of, or in connection with, a scheme for the reconstruction of any company or companies to
the amalgamation of any two or more companies, and that under the scheme the whole or any
part of the undertaking and the property of any company concerned in the scheme, in this
section referred to as a transferor company, is to be transferred to another company in this
section referred to as the transferee company, the Court may, either by the order sanctioning
the compromise or arragemennt or by any sub-sequent order, make provision for all or any of
the following matters :-

(a) the transfer to the transferee company of the whole or any part of the undertaking
and of the property or liabilities of any transferor company;

(b) the alloting or appropriation by the transferre company of shares, debentures,

policies, or other like interests in that company which under the compromise or
arrangement are to be alloted or appropriated by that company to or for any person;

(c) the continuation by or against the transferee company of any legal proceedings
pending by or against any transferor company;

(d) the dissolution, without winding up, of any transferor company;

(e) the provision to be made for any person who, within such time and in such manner
as the Court directs, dissents from the compromise or arrangement;

(f) such incidental, consequential and supplemental matters as are necessary to secure
that the reconstruction or amalgamation shall be fully and effectively carried out.

(2) Where an order under this section provides for the transfer of property or liabilities, that
property shall be virtue of the order, be tranaferred to and vest in, and those liabilities shall be
virtue of the order transferred to and become the liabilities of the transferee company, and in
the case of any property, if the order so directs, it shall be freed from any charge which is, by
virtue of the compromise or arrangement or cease to have effect.

(3) Where an order is made under this section, every company in relation to which the order
is made shall cause a certified copy thereof to be delivered to the Registrar for registration
within fourteen days after the completion of the order, and if,
default is made in complying with the sub-section, the company and also every officer of the
company who is knowingly and wilfully in default, shall be liable to a fine not exceeding two
hundred taka.

(4) In this section, the expression "property" includes property, rights and powers of every
description, and the expression "liabilities" includes duties.
(5) Notwithstanding the provisions of sub-section (6) of section 228, the expression
"company" in this section does not include any company other than a company within the
meaning of this Act.

230. Power to acquire shares of shareholders dissenting from schemes of contract approved
by majority:-

(1) Where-

(a) a scheme or contract involves the transfer of shares or any class of shares in a
company, in this section referred to as the transferor company, to another company,
whether a company within the meaning of this Act or not, in this section referred to as
the transferee company; and

(b) within one hundred and twenty days after the making of the offer in that behalf by
the transferee company, the offer has been approves by the holders of not less than
three-fourths in value of the shared affected, the transferee company may, at anytime
within sixty days after the expiration of the said one hundred and twenty days, give
notice in the prescribed manner to any dissenting shareholder that it desires to acquire
his shares.

(2) Where such a notice is given under sub-section(1), the transferee company shall unless on
an application made by the dissenting shareholder within thirty days from the date on which
the notice was given the Court thanks fit to order otherwise; be entitled and bound to acquire
those shares on the terms on which under the scheme or contract the shares of the approving
share holders are to be transferred to the transferee company.

(3) Where a notice has been given by the transferee company under sub- section (1) and the
Court has not, on an application made by the dissenting shareholder, ordered to the contrary,
the transferee company shall, on the expiration of one month from the date on which the
notice has been given, or, if an application to the Court by the dissenting shareholder in then
pending, after that application has been disposed of transmit a copy of the notice to the
transferor company and pay or transfer to the transferors company the amount or other
consideration representing the price payable by the transferee company for the shares which
by virture of this section that company is entitled to acquire, and the transferor company shall
thereupon register the transferee company as the holder of those shares.

(4) Any sums received by the transferor company under this section shall be paid in to a
separate bank account and any such sums and any other consideration so received shall be
held by that company on trust for the several persons entitled to the shares in respect of which
the said sums or other consideration were respectively received.
(5) In this section, the expression "dissenting shareholder" includes a share holder who has
not assented to the scheme or contract and any shareholder who has failed or refused to
transfer his shares to the transferee company in accordance with the scheme or contract.

Conversion of private company into public company and vice-versa

231. Conversion of private company into public company.--(1) If a company being a

private company having at least seven members afters its articles in such manner that they no
longer include the provisions which, under clause of subsection (1) of section 2 of this Act,
are required to be included in the articles of a company in order to constitute it a private
company, the company-

(a) shall as on the date of the alteration cease to be a parivate company; and

(b) shall within a period of this thirty days after the said date file with the Registrar
either a prospectus or a statement in lieu of prospectus containing the particulars set
out in Part 1 and the reports specified in Part II of Schedule IV and the said Parts I
and II shall have effect subject to the provisions contained in Part III of that Schedule.

(2) If default is made in complying with sub-section (1) the company, and also every officer
of the company who is in default, shall be punishable with imprisonment for a term which
may extend to two years, or with fine which may extend to five thousand take or with both.

(3) Where any prospectus or statement in lieu of prospectus filed under this section imcludes
and untrue statement, any person who authorised the filling of such prospectus or statement
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 filing of the prospectus or statement believe that the statement was true.

(4) for the purposes of this section-

(a) a statement included in a prospectus or 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;
or

(b) where the omission from prospectus or a statement in lieu of prospectus of any
matter is calculated to mislead, the prospectus or statement in lieu of prospectus shall
be deemed, in respect of such omission, to be a prospectus or a statement in lieu of
prospectus in which an untrue statement is included.

(5) For the purposes of sub-section (3) and clause (a) of sub-section (4) the expression
"included" when used with reference to a prospectus or statement in lieu of prospectus, means
included in the prospectus or statement in lieu of prospectus itself or contained in any report
or memorandum appearing on the face thereof, or by reference incorporated therein.

232. Amendment of articles for conversion of a public company into private company.-
(1) A public company, having not more than fifty members at the time of conversion, may be
converted into a private one by passing a special resolution altering its articles so as to
exclude provisions, if any, in the articles of association applicable to public company and
include therein provisions applicable to a private company.

(2) If the company has secured creditions, their wittren consent shall have to be obtained
before passing a resolution as per provision of subsection (1) and the shares enlisted with the
stock Exchange shall have to be delisted.

Protection of minority interest

233. Power of Court to give direction for protectiong interest of the minority.-(1) Subject
to fulfilment of the conditions of the required minimum as specified in section 195 (a) and (b)
any member or debentureholder of a company may either individually or jointly bring to the
notice of the court by application that-

(a) the affairs of the company are being conducted or the powers of the directors are
being exercised in a manner prejudicial to one or more of its members or debenture
holders or in disregard of his or their interest; or

(b) the company is acting or is likely to act in a manner which discriminated or is

likely to discriminate the interest of any member or debenture holder;

(c) a resolution of the members, debenture holders or any class of them has been
passed or is likely to be passed which discriminates or is likely to discriminate the
interest of one or more of the members or likely to debenture holder:

and pray for such order, as in his or their opinion, would be necessary for safeguarding his or
their interest and also the interest of any other member or debenture holder.

(2) The Court shall, on receipt of an application under sub-section(1) send a copy thereof to
the Board and fix a date for hearing the application

(3) If after hearing the parties present on the date so fixed, the Court is of opinion that the
interest of the applicant or applicants has been or is being or is likely to be prejudicially
affected for reasons specified in the application, it may make such order as prayed for or such
other order as it deems fit including a direction-

(a) to cancel or modify any resolution or transaction ; or

 (b) to regulate the conduct of the company's affairs in futute in such manner as is
specified therin.

(c) to amend any provision of the memorandum and articles of the company.

(4) Where by an order of the Court, any amendment is made in the memorandum or articles
of the company, the company shall not, without leave of the Court, make any amendment
therein or take any action which is inconsisten with the direction contained in he order.

(5) A company shall, within fourteen days from the making of an order under this section,
inform the Registrar in writing of such order and send him a copy thereof, and if the company
makes default in complying with this sub-section the company, and also every officer of the
company who is in default, shall be liable to a fine not exceeding one thousand taka.

PART V

WINDING UP

Preliminary

234. Mode of winding up.--(1) The winding up of a company may be either.

(i) by the Court; or

(ii) voluntary; or

(iii) subject to the supervision of the Court.

(2) The provisions of this Act with respect to winding up shall apply, to the winding up of a
company in any of these modes, unless any thing contrary appears.

Contributories

235. Liability as Contributories of present and past members.-- (1) In the event of a
company being would up every present and past members shall, subject to the provisions of
this section, be liable to contribute to the assets of the company to an amount sufficient for
payment of its debts and liabilities and the coasts, charges and expenses of the winding up,
and for the adjustment of the rights of the Contributories among themselves, with the
qualifications following, that is to say:--

(i) a past member shall not be liable to contribute if he has ceased to be a member for
one year or upwards before the commencement of the winding up;
 (ii) a past member shall not be liable to contribute in respect of any debt or liability of
the company contracted after he ceased to be a member;

(iii) a past member shall not be liable to contribute unless it appears to the Court that
the existing members are unable to satisfy the contributions required to be made by
them in pursuance of this Act;

(iv) in the case of a company limited by shares, no contribution shall be required from
any member exceeding the amount, if any, unpaid on the shares in respect to which he
is liable as a present or past member;

(v) in case of a company limited by guarantee, no contribution shall be required from

any member exceeding the amount undertaken to be contributed by him to the assets
of the company in the event of its being wound up;

(vi) nothing in this Act shall invalidate any provision contained in any policy of
insurance or other contract where by the liability of individual members on the policy
or contract is restricted or whereby the funds of the company are alone made liable in
respect of the policy or contract;

(vii) a sum due to any member of a company in his character of a member, by way of
dividends, profits or otherwise, shall not be deemed to be a debt of the company
payable to that member in a case of competition between himself and any other
creditor who is not a member of the company.

(2) In the winding up of a company limited by guarantee which has a share capital, every
member thereof shall be liable to pay the following amounts namely:--

(a) the amount undertaken to be contributed by him to the assets of the company in the event
of its being wound up; and

(b) an amount to the extent of any sums unpaid on any shares held by him.

236. Liability of directors whose liability is unlimited.-- In the winding up of a limited

company, any director whether past or present, whose liability is, in pursuance of this Act,
unlimited, shall, in addition to his own libility(if any) to contribute as an ordinary member, be
liable to make a further contribution, as if he were at the commencement of the winding up a
member of an unlimited company;

Provided that--

(i) a past director shall not be liable to make such further contribution if he has ceased
to hold office for a year or upwards before the commencement of the winding up;
 (ii) a past director shall not be liable to make such further contribution in respect of
any debt or liability of the company contracted after he ceased to hold office;

(iii) subject to the articles, a director shall not be liable to make such further
contribution unless the Court deems it necessary to require contribution in order to
satisfy the debts and liabilities of the company and the costs, charges and expense of
the winding up.

237. Meaning of "contributory".-- The term "contributory" means every person liable to
contribute to the assets of a company in the event of its being would up, and, in all
proceedings for determining and in all proceedings prior to the final determination of the
persons who are to be deemed contributries, includes any person alleged to be a contributory.

238. Nature of liability of contributory.-- (1) The liability of the contributory shall create a
debt payable at the time specified in the calls made on him by the liquidator.

(2) No claim founded on the liability of a contributory shall be congizable by any Court of
Small Causes,

239. Contributories in case of death of member.--(1) If a contributory dies either before or

after the has been placed on the list of Contributories, his, legal representatives and his heirs
shall be liable in the due course, of admini--ministration to contribute to the assets of the
company in discharge of his liability and shall be Contributories accordingly.

(2) If the legal representatives or heirs make default in paying any money ordered to be paid
by them, proceedings may be taken for administering the property of the deceased
contributory, whether movable or immovable, or both, and for compelling payment there out
of the money due.

(3) For the purpose of this section, the surviving coparceners of a contributory who is a
member of a Hindu Joint Family governed by the Mitakshara School of Hindu Law shall be
deemed to be his legal representatives and heirs.

240. Contributories in case of insolvency of member.-- If a contributory is adjudged

insolvent either before or after he has been placed on the list of contributors, then--

(a) his assignese shall represent him for all the purposes of the winding up, and shall be
contributories accordingly, and may be called on to admit to prove against the estate of the
insolvent, or otherwise to allow to be paid out of his assets in due course of law, any money
due from the insolvent in respect of his liability to contribute to the assets of the company;
and

(b) there may be proved against the estate of the insolvent the estimated value of his liability
to future calls as well as already made.
Winding up by Court

241. Circumstances in which company may be wound up by Court.-- A company may be

wound up by the Court; if--

(i) if the company has by special resolution resolved that the company be wound up
by the Court; or

(ii) if default is made in filing the statutory report or in holding the statutory meeting;
or;

(iii) if the company does not commence its business within a year from its
incorporation, or suspends its business for a whole year; or

(iv) if the number of members is reduced, in the case of a private company below two,
or, in the case of any other company, below seven; or

(v) if the company is unable to pay its debts; or

(vi) if the Court is of opinion that it is just and equitable that the company should be
wound up.

242. Company when deemed unable to pay its debts.--(1) A company shall be deemed to
be unable to pay its debts--

(i) if a creditor, by assignment or otherwise, to whome the company is indebted for a

sum exceeding five hundred take then due, has served on the company, by causing the
same to be delivered by registered post or otherwise at its registered office, a demand
under his hands requiring the company to pay the sum so due and the company has for
three weeks thereafter neglected to pay the sum or to secure or compound for it to the
reasonable satisfaction of the creditor; or

(ii) if execution or other process issued on a decree or order of any court in favour of a
creditor of the company is returned unsatisfied in whole or in part; or

(iii) if it is proved to the satisfaction of the Court that the company is unable to pay its
debuts, the Court shall take into account the contingent and prospective liabilities of
the company.

(2) The demand referred to in clause (i) of sub--section (1) shall be deemed to have been duly
given under the hand of the creditor if it is signed by an agent or legal advisor duly authorised
on his behalf, or in the case of a firm, if it is signed by such agent, or by a regal adviser or by
any one member of the firm on behalf of the firm.
243. Winding up may be referred to District Court.-- Where the High Court Division
makes as order for winding up of a company under this Act it may, if it thinks fit, direct all
subsequent proceedings to be had in a District Court, and thereupon such District Court shall
for the purpose of winding up the company, be deemed to be "the Court" within the meaning
of this Act and shall have, fir the perposes of such winding up, all the jurisdiction and powers
of the High Cour Division.

244. Transfer of winding up from one District Court to another.-- If during the progress
of a winding up in a District Court it is made to appear to the High Court Division that the
same may be more conveniently prosecuted in any other District Court, the High court
Division may transfer the same to such other District Court, and there upon the winding up
shall proceed in such other District Court, and at any state of such proceedings, that Division
may with draw the proceedings from any of such District Courts and dispose it of.

245. Provisions as to applications for winding up.-- An application to the Court for the
winding up of a company shall be by petition presented, subject to the provisions of this
section, either by the company, or by any creditor or creditors, including any contingent or
prospective creditor or creditors, contributory or contributors, or by all or any of those
parties, together or separately or by the Registrar:

Provided that--
(a) a contributory shall not be entitled to present a petition for winding up a company, unless-
-

(i) either the number of members is reduced in the case of a private company, below
two, or, in the case of any other company, below seven; or

(ii) the shares in respect of which he is a contributory or some of them either were
originally allotted to him or have been held by him, and registered in his name for at
least six months during the eighteen months before the commencement of the winding
up, or have devolved on him through the death of a former holder;

(b) the Registrar shall not be entitled to present a petitions for winding up a company--

(i) except on the ground from the financial condition of the company as disclosed in
its balance sheet or from the report of an inspector appointed under section 195 or, in
a case falling within section 204, it appears that the company is unable to pay its
debts; and

(ii) unless the previous sanction of the Government has been obtained to the
presentation of the petition:
Provided that no such sanction shall be given unless the company has first been afforded an
opportunity of being heard.

(c) a petition for winding up of a company on the ground of default in filing the statutory
report or in holding the statutory meeting shall not be presented by any person except by a
shareholder, nor before the expiration of fourteen days after the last day on which the meeting
ought to have been held;

(d) the Court shall not give a hearing to a petition for winding up of a company by a
contingent or prospective credition until such security for costs has been given as the Court
thinks resonable and until a prima fccie case for winding up has been established to the
satisfaction of the Court.

246. Effect of winding up order.-- An order for winding up of a company shall operate in
favour of all the creditors and of all the contributories of the company as if made on the join
petition of a credition and of a contributory.

247. Commencement of winding up by Court.-- A winding up of a company by the Court

shall be deemed to commence at the time of the presentation of the petition for the winding
up.

248. Court may grant injunction.-- The Court may, at any time after the presentation of the
petition for winding up of a company under this Act and before making an order for winding
up the company, upon the application of the company or of any creditor or contributory of the
company, restrain further proceedings in any suit or proceedings against the company and
may also pass other similar order upon such terms as the Court thinks fit.

249. Powers of Court on hearing peititon.--(1) On hearing the petition, the Court may
dismiss it with or without costs, or adjourn the hearing conditionally or unconditionally, or
make any interim order or any other order which, it deems just, but the Court shall not refuse
to make a winding up order on the ground only that the assets of the company have been
mortgaged to an amount equial to, or in excees of, those assets or that the company has no
assets.

(2) Where the petition is presented on the ground of default in filing the statutory report or in
holding the statutory meeting the Court may order the costs to be paid by any persons who, in
the opinion of the Court, are responsible for the default.

(3) Where the Court makes an order for the winding up of a company, it shall, except where a
liquidator is appointed simultaneously, forthwith cause intimation thereof to be sent to the
official receiver.

250. Suits stayed on winding up order.-- When a winding up order has been made or a
provisional liquidator has been appointed, no suit or other legal proceedings shall be
proceeded with or commenced against the company except by leave of the Court and subject
to such terms as the Court may impose.

251. Vacancy in the office of liquidator.--(1) For the purposes of this Act, so far as it
relaters to the winding up of companies by the Court, or, if there is no such official receiver,
then such person as the Government may, by notification in the official Gazette, appoint for
the purpose.

(2) On the making of a winding up order the official receiver shall become the official
liquidator of the company and shall continue to act as such until his further continuance is
terminated by an order of the Court.

(3) The official receiver shall, as the official liquidator, forthwith take into his custody and
control all the books, documents and the assets of the company.

(4) The official receiver shall be entitled so such remuneration as the Court shall fix.

252. Copy of winding up order to be filed with the Registrar.--(1) On the making of a
winding up order, it shall be the duty of the petitioner in the winding up proceedings and of
the company to file with the Registrar a copy of the order within thirty days from the date of
the making in the order.

(2) On the filing of a copy of a winding up order, the Registrar shall register a summary
thereof in his books relating to the company, and shall notify in the official Gazette that such
an order has been made.

(3) Such order shall be deemed to be notice of discharge to the servants of the company
except when the business of the company is continued.

253. Power of Court to stay winding up.-- The Court may, at any time after an order for
winding up, on the application of any creditor or contributor, and on proof to the satisfaction
of the Court that all proceedings in relation to the winding up ought to be stayed, make an
order staying the proceedings, either altogether or for a limited time, on such terms and
conditions as the Court thinks fit.

254. Court may have regard to wishes of creditors or contributories-- The Court may, as
to all matters relating to a winding up, have regard to the wishes of the creditors or
contributories as proved to it by any sufficient evidence.

Official Liquidator

255. Appointment of official liquidator.--(1) For the purpose of conducting the proceedings
in winding up a company and performing such duties in reference thereto as the Court may
impose, the Court may appoint a person or persons, other than the official receiver, to be
called an official liquidator or official liquidators.

(2) The Court may make such an appointment provisionally at any time after the presentation
of a petition and before the making of an order for winding up, but shall, before making any
such appointment, give notice to the company unless for reasons to be recorded it thinks fit to
dispense with such notice.

(3) If more persons than one are appointed to the office of official liquidator, the Court shall
declare whether any act, by this Act required or authorised, to be done by the official
liquidator is to be done by all or any one or more of such persons.

(4) The Court may determine whether any and what security is to be given by any official
liquidator on his appointment.

(5) The acts of an official liquidator shall be valid notwithstanding any defect that may
afterwards be discovered in his appointment.

Provided that nothing in this sub--section shall be deemed to give validity to acts done by an
official liquidator after his appointment has been show to be invalid.

(6) A receiver shall not be appointment of assets in the hands of an official liquidator.

256. Resignations, removals, filling up vacancies and compensation.-- (1) Any official
liquidator may resign, or may be removed by the Court on due cause shown.

(2) Any vacancy in the office of an official liquidator appointed by the Court shall be filled
up by the Court and until the vacancy is so filled up the official receiver shall be and act as
the official liquidator.

(3) There shall be paid to the official liquidator such salary or remuneration by way of
percentage or otherwise, as the Court may direct and if more liquidators that one are
appointed, such remuneration shall be distributed amongst them in such proportions as the
Court directs.

257. Official liquidator.-- The official liquidator shall be described by the style of the
official liquidator of the particular company in respect of which he is appointed, and not by
his individual name.

258. Statement of affairs to be made to the liquidator.--(1) Where the Court has made a
winding up order or appointment an official liquidator provisionally, there shall, unless the
Court thinks fit to order otherwise and so orders, be made out and submitted to the official
liquidator a statements as to the affairs of the company verified by an affidavit and containing
the following particulars, namely:--

(a) the assets of the company, staying separately the cash balance in hand and in the
bank, if any;

(b) the debts and other liabilities;

(c) the names, residences and occupations of the creditors stating separately the
amount of secured debts and unsecured debts, and in the case of secured debts,
particulars of the securities, their value and the dates when they were given;

(d) the debts due to the company and the names residences and occupations of the
persons from whom they are due and the amount likely to be realised therefrom.

(2) The said statement shall be submitted and verified by one or more of the following
persons.--

(a) the persons who were at the relevant date the directors and the person who was at that date
the secretary, manager or other chief officer of the company, or.

(b) such other person as the official liquidator may, subject to he direction or Court, require to
submit and verify the statement, and the said other persons are the persons--

(i) who are or had been directors or officers of the company;

(ii) who have taken part in the formation of the company at anytime within one year
before the relevant date;

(iii) who are in the employment of the company or had been in the employment of the
company within the said year referried to in sub-- section (ii) above, and are, in the
opinion of the official liquidator, capable of giving the information required;

(iv) who are or had been within the said year to which the statement relates officers of
or in the employment of a company.

(3) The statement small be submitted within twenty-one days from the relevant date, or
within such extended time as the official liquidator or the Court may, for special reasons
appoint.

(4) Any person making or concurring in making the statement and affidavit required by this
section shall be allowed, and shall be paid by the official liquidator or provisional liquidator
at the case may be out of the assets of the company, such costs and expended incurred in and
about the preparation and making of the statement and affidavit as the official liquidator may
consider reasonable, subject to an appeal to the Court.

(5) If any person, without reasonable excuse, knowingly and wilfully make default in
complying with the requirements of this section, he shall be liable to a fine not exceeding five
hundred take for every day during which the default continues.

(6) Any person stating himself in writing to be a creditor or contributory of the company shall
be entitled by himself on by his agent at all reasonable times, on payment of the prescribed
fee, to inspect the statement submitted in pursuance of this section and to a copy thereof or
extract therefrom.

(7) Any person untruthfully so stating himself to be a creditor or contributory shall be guilty
of an offence under section 182 of the Penal Code, 1860 (XIV of 1860), and shall, on the
application of the liquidator or of the receiver be punishable accordingly.

(8) In this section, the expression "the relevant date" means, in a case where no such
appointment is made, the date of the winding up order.

259. Statement by liquidator.--(1) In a case where a winding up order is made, the official
liquidator shall, as on as practicable after receipt of the statement to be submitted under
section 258, and not later than one hundred and twenty days or with the leave of the Court
one hundred and sixty days from the date of the order, or in a case where the Court orders
that no statement shall be submitted, as soon as practicable after the date of the order, submit
a preliminarly report to the Court--

(a) as to the amount of capital issued, subscribed, and paid up, and the estimated amount of
assets and liabilities giving separately under the leading of assets, particulars of --

(i) cash and negotiable securities;

(ii) debts due from contributories;

(iii) debts due to and securities, if any, available to the company,

(iv) movable and immovable properties belonging to the company;

(v) unpaid calls, and

(b) if the company has failed as to the cause of the failure, and

(c) whether in his opinion further inquirey is desirable as to any matter relating to the
promotion, formation, or failure of the company, or the conduct of the business thereof.
(2) The official liquidatory may also, if he thinks fit, make a further report or further reports,
stating the manner in which the company was formed and whether in his opinion any fraud
has been committed by any person in its promotion or formation or by any director or other
officer of the company in relation to the company since the formation thereof, and any other
matter which is his opinion it is desirable to bring to the notice of the Court.

260. Custody of company's property.--(1) The official liquidator, whether appointed

provisionally or not, shall take into his custody, or under his control all the property, effects
and actionable claims to which the company is or appears to be entitled.

(2) All the property and effects of the company shall be deemed to be in the custody of the
Court as from the date of the order for the winding up of the company.

261. Committee of Inspection in compulsory winding up.--(1) The official liquidator shall,
within a month from the date of the order for the winding up of a company, convene a
meeting of the creditors of the company, as ascertained from the books and documents of the
company, for the purpose of determining whether or not a committee of inspection shall be
appointed to act with the liquidator, and who are to be members of the committees, if
appointed.

(2) The official liquidator shall, within a week from the he date of the creditors meeting
convence a meeting of the contributories to consider the decision of the creditors and to
accept the same with or without modification.

(3) If the contributories do not accept the decision of the creditors in its entirely, it shall be
the duty of the official liquidator to apply to the Court for directions as to whether there shall
be a committee, and who shall be members thereof.

(4) A committee of inspection appointed under this section shall consist of not more than
twelve members being creditors and contributories of the company or persons holding
general or special powers of attorney from creditors or contributories in such proportions as
may be agreed on by the meetings of creditors and contributories, or as, in case of difference,
may be determined by the Court.

(5) The committee of inspection shall have the right to inspect the accounts of the official
liquidator at all reasonable times.

(6) The committee shall meet at such times as they may from time to time appoint, and,
failing such appointment, at least once a month, and the liquidator or any member of the
committee may also call a meeting of the committee as and when he thinks necessary.

(7) The committee may act by a majority of their members present at a meeting, but shall not
act unless a majority of the committee are present.
(8) A member of the committee may resign by notice in writing signed by him and delivered
to the liquidator.

(9) If a member of the committee becomes bankrupt, or compounds or arranges with his
creditors, or is absent from five consecutive meetings of the committee without the leave of
those members who together with himself represent the creditors or contributories, as the case
may be, his office shall thereupon became vacant.

(10) A members of the committee may be removed therefrom by an ordinary resolution at a

meeting of creditors if, he represents creditors, or of contributories, if he represents
contributories, of which seven days, notice has been given, stating the object of the meeting.

(11) On a vacancy occurring in the committee, the liquidator shall forthwith summon a
meeting of creditors or of contributories, as the case may require, to fill in the vacancy, and
the meeting may, by resolution, re-appoint the same or appoint another creditor or
contributory to fill in the vacancy.

(12) The *ontinung members of the committee, if not less than two, may set notwithstanding
any vacancy in the committee.

262. Powers of official liquidator.-- The official liquidator shall have power with the
sanction of the Court, to do the following things--

(a) to institute or defend any suit or prosecution, or other leagl proceeding, civil or criminal,
in the name and on behalf of the company;

(b) to carry on the he business of the company so far as may be necessary, for the beneficial
winding up of the same,

(c) to sell the immovable and movable property of the company by public auction on private
contract, with power to transfer the whole thereof to any person or organisation or company,
or to sell the same in parecis.

(d) to do all acts and to execute, in the name and on behalf of the company, all deeds,
receipts, and other documents, and for that purpose to use, when necessary the company's
common seal;

(e) to prove, rank and claim in the insolvency of any contributory, for any balance a against
his estate, and to receive dividends in the insolvency, in respect of that balance, as a separate
debt due from the insolvent, and rateably with the other separate creditors;

(f) to draw, accept, make and endorse any bill of exchange, hundi or promissory note in the
name and on behalf of the company, with the same effect with respect to the liability of the
company as if the bill, hundi or note had been drawn, accepted, made or endorsed by or on
behalf of the company in the course of its business;

(g) to raise on the security of the assets of the company any more requisite;

(h) to take out in his official name letters of administration relating to the estate of any
deceased contributory or his estate which cannot be conveniently done in the name of the
company, and in all such cases the money due shall, for the purpose of enabling the liquidator
to take out the letters of administration or recover the money be deemed to be due to the
liquidator or himself;

Provided that nothing in clause (h) shall be deemed to affect the rights, duties and privileges
of the Administrator General appointed under the Administrator General's Act, 1913(III of
1913);

(i) to do all such other things as may be necessary for winding up the affairs of the company
and distributing its assets.

263. Limit of Discretion of official liquidator.-- The Court may provide by any order that
the official liquidator may exercise any of the above powers without the sanction or
intervention of the Court, and, where an official liquidator is provisionally appointed, may
limit and restrict his powers by the order appointing him.

264. Provision for legal assistance to official liquidator.-- The Official liquidator may, with
the sanction of the Court, appoint an advocate or attorney entitled to appear before the Court
to assist him in the performance of his duties;

Provided that, where the official liquidator is an advocate or attorney, he shall not appoint his
partner, unless the latter consents to act without remuneration.

265. Liquidator to keep books containing proceeding of meetings and to submit account
of his receipts to Court.-(1) The official liquidator of a company which is being wound up
by the Court shall keep, in the manner prescribed, proper books in which he shall cause to be
made entries or minutes of proceedings at meetings and of such other matters as may be
prescribed, and any creditor or contributory may, subject to the control of the Court,
personally or by his agent, inspect any such books.

(2) Every official liquidator shall, at such times as may be prescribed but not less than twice
in each year during his tenure of office, present to the Court an account of his receipts and
payments as such liquidator.

(3) The liquidator shall prepare the account in the prescribed form in duplicate, and shall
verify it by a declaration in the prescribed form.
(4) The Court shall cause the account to be audited in such manner as it thinks fit and for the
purpose of the audit the liquidator shall furnish the Court with such vouchers, and books or
other document as the Court may require, and the Court may at any time require the
production of an inspect any books or account kept by the liquidator.

(5) When the account has been audited, one copy thereof shall be filed and kept by the Court,
and the other copy shall be delivered to the Registrar for filing, and each copy shall be open
to the inspection of any creditor or any person interested.

266. Excercise and control of liquidator's powers--(1) Subject to the previsions of this Act,
the official liquidator of a company which is being wound up by the Court shall, in the
administration of the assets of the company and in the distribution thereof among its
creditors, have regard to any directions that may be given by resolution of the creditors or
contributories at any general meeting shall, in case of confilict be deemed to over ride any
directions given by the committee of inspection.

(2) The official liquidator may summon general meeting of the creditors or contributories for
the purpose of ascertaining their wishes, and it shall be his duty to summon meeting at such
times as the creditors or contributories by resolution, may direct, or whenever requested in
writing to do so by one tenth in value of the creditors or contributiries, as the case may be.

(3) The official liquidator may apply to the Court in the manner prescribed for directions in
relation to any particulars matter arising in the winding up.

(4) Subject to the provision of this Act, the official liquidator shall use his own discretion in
the administration of the assets of the company and in the distribution thereof among the
creditors.

(5) If any person is aggrieved by any act or decision of the official liquidator, that person may
apply to the Court, and the Court may confirm, reverse or modify the act or decision
complained of, make such order as it thinks just in the he circumstances.

Ordinary Powers of Court

267. Settlement of list of contributories and application of assets.-- (1) As soon as may be
after making a winding up order, the Court, shall settle a list of contributories, shall have
power to register of members in all cases where rectification is required in pursuance of this
Act, and shall cause the assets of the company to be collected and applied in discharge of its
liabilities.

(2) In setling the list of contributories, the Court shall distinguish between persons who are
contributories in their own right and persons who are contributories as being representatives
of or liable for the debts of others.
268. Power to require transfer, delivery etc of property.-- The Court may at any time after
making a winding up order, require any contributory for the time being settled on the list of
contributories and any trustee, receiver, banker, agent, or officer of the company to pay,
deliver surrender or transfer forthwith, or within such time as the Court directs, to the official
liquidator any money property or documents in his hands to which the company is prima
facie entitled.

269. Power to order payment of debts by contributory.-- (1) The Court may, at any time
after making a winding up order, make an order any contributory for the time being settled on
the list of contributories to pay, in the manner directed by the order, any money due from him
or from the estate of the person whom he represents to the company exclusive of any money
payable by him or the estate by virtue of any call in pursuance of this Act.

(2) The Court in making such an order may, in the case of an unlimited company, allow to the
contributory by way of set-off any money due to him or to the estate which he represents
from the company, on any independent dealing or contract with the company, but not any
money due to him as a member of the company in respect of any dividend or profit, and may,
in the case of a limited company, made to any director whose liability is unlimited or to his
estate the like allowance:

Provided that, the case of any company, whether limited or unlimited, when all the creditors
are paid in full any money due on any account whatever to a contributory from the company
may be allowed to him by way of set-off against any subsequent call.

270. Power of Court to make calls.--(1) The Court may, at any time after making a winding
up order, and that is either before or after it has ascertained the sufficiency of the assets of the
company, make calls on and order payment there of by all or any of the contributiries for the
time being settled on the list of the contributories to the extent of their liability, for payment
of any money which the Court considers necessary to satisfy the debts and liabilities of the
company, and the costs, charges and expenses of winding up, and for the adjustent of the
rights of the contributories among themselves.

(2) In making the call the Court may take into consideration the probability that some of the
contributories may partly or wholly fail to pay the call.

271. Power to order payment into bank.-- The Court may order any contributory, purchaser
or other person from whom money is due to the company to pay the same into the account of
the official liquidator in any scheduled banks as defined in the Bangladesh Bank Order, 1972
(P.O. No. 127), instead of to the official liquidator and any such order may be enforced in the
same manner as if it had made direct payment to the official liquidator.

272. Regulation of account with Court.-- All moneys, bills, hundis, notes and other
securities paid and delivered into the bank where the liquidators of the company may have his
account, in the event of a company being wound up by the Court, shall be subject in all
respect to the orders of the Court.

273. order on contributory conclusive evidence:-- (1) An order made by the Court on a
contrubutory shall, subject to any right of appeal, be conclusive evidence that the money, if
any, thereby appearing to be due or ordered to be paid is due.

(2) All other pertinent matters stated in the order shall be taken to be truly stated as against all
persons, and in all proceedings whatsoever.

274. Power to enclude creditors not providing in time :-- The Court may fix a time or
times within which creditors are to prove their debts or claims, or to be excluded from the
benefit of any distribution made before those debts are proved.

275. Adjustment of right of contributories:-- The Court shall adjust the right of the
contributories among themselves, and distribute any surplus among the persons entiled
thereto.

276. Power to order cost:- The Court may, in the event of the companys assets being
insufficient to satisfy the liabilities, make an order as to the payment, out of the assets, of the
costs, charges and expenses, incurred in the winding up in such order of priority as the Court
thinks just.

277. Dissolution of company--(1) When the affairs of a company have been completely
wound up, the Court shall make an order that the company be dissolved from the date of the
order, and the company shall be dissolved accordingly.

(2) The order shall be reported within fifteen days of the making thereof by the official
liquidator to the Registrar, who shall record in his make books a minute of the dissolution of
the company.

(3) If the official liquidator makes default in complying with the requirements of this section,
he shall be liable to a fine not exceeding one hundred taka for everyday during which he is in
default.

Extraordinary Powers of Court

278. Power to summon persons suspected of having property of company:--(1) The Court
may, after it has made a winding up order, summon before it any officer of the company or
person known or suspected to have in his possession any property of the company, or
supposed to be indebted to the company, or any person whom the Court deems capable of
giving information concerning the trade, dealing, affairs or property of the company.
(2) The Court may examine him on oath concerning the same, either by word of mouth or on
written interrogatories, and may reduce his answers to writing and require him to sing them.

(3) The Court may require him to produce any documents in his custody or power relating to
the company; but, where he claims any lien on documents produced by him, the production
shall be without prejudice to that lion, and the Court shall have jurisdiction in the winding up
to determine all questions relating to that lien.

(4) If any person so summoned, after being tendered a reasonable sum for his expens, refuses
to come before the Court at the time appointed, not haveing a lawful impediment made
known to the Court at the time of its sitting and allowed by it, the Court may cause him to be
apprehended and brought before the Court for examination.

279. Power to order public examination of promotors, etc:--(1) When an order has been
made for winding up a company by the Court, and the official liquidator has applied to the
Court stating that in his opinion, a fraud has been committed by any person in the promotion
or formation of the company or by any director or other officer of the company, in relation to
the company since its formation, the Court may, after consideration of the application, direct
that any person who has taken any part in the promotion or formation of the company or has
been a director manager or other officer of the company shall attend before the Court on a
day appointed by the Court for that purpose attend before the Court on a day appointed by the
Court for that purpose, and be publicly examined as to the promotion or formation or the
conduct of the business of the company, or as to his conduct and dealings as director manager
or other officer thereof.

(2) The official liquidator shall take part in the examination and for that purpose may, if
specially authorised by the Court in that behalf, employ such legal assistance as may be
sanctioned by the Court.

(3) Any creditor or contributory may also take part in the examination either personally or by
any person entitled to appear before the ourt.

(4) The Court may put such questions to the person examined as the Court thinks fit.

(5) The person examined shall be examined on oath, and shall answer all such questions as
the Court may put or allow to be put to him.

(6) A person ordered to be examined under this section may at his own cost employ any
person entitled to appear before the Court, who shall be at liberty to put to him such questions
as the Court may deem just for the purpose of enabling him to explain or qualify any answers
given by him;

Provided that if he is, in the opinion of the Court, exculpated from any charges made or
suggested against him such costs as, in its discretion, it may think fit.
(7) Notes of the examination shall be taken down in writing, and shall be read over to or by,
and signed by, the person examined, and may thereafter by used in evidence against him in
civil proceedings, and shall be open to the inspection of any creditor or contributory at all
resonable times.

(8) The Court may, if it thinks fit, adjourn the examination from time to time.

(9) An examination under this section may, if the Court so directs, and subject to any rules in
this behalf, be held before any District Judge or before any officer of the High Court Division
being an official referee, master, Registrar or Deputy Registrar and the powers of the Courts
under this section as to the conduct of the examination, but not as to costs, may be exercised
by the person before whom the examination is held.

280. Power to arrest absconding contributionry:-- The Court, at any time either before or
after making a winding up order and on proof of probable cause for believing that a
contributory is or about to quit Bangladesh or otherwise to abscond, or to remove or conceal
any of his property, for the purpose of evading payment of calls or of avoiding examination
respecting the affairs of the company, may cause the contributory to be arrested and his books
and papers and movable property to be sized, and him and them to be safe castody until such
times as the Court may order.

281. Saving of other proceedings:-- Any powers by this Act conferred on the Court shall be
in addition to and not in restriction of, any existing powers of instituing proceedings against
any contributory or debtor of the company, or the estate of any contributory or debtor for the
recovery of any call or other sums.
Enforcement of and appeal from Orders

282. Power to enforce orders:-- All orders made by the Court under this Act may be
enforced in the same manner in which decrees of such Court mad in any suit pending therein
may be enforced.

283. Order made in any Court to be enforced by other Courts.-- Any order made by the
Court for or in the course of the winding up of a company shall be enforced in any place in
Bangladesh by any other court that would have had jurisdiction in respect of such company if
the registered office of the company had been situate at such place and in the same manner in
all respect as if such order had been made by the court that is hereby required to enforce the
same, but in relation to the place where the registered office of the company is situate, only
the court having jurisdiction cover such place shall enforce such order.

284. Mode of dealing with order to be enforced by other Courts.-- Where any order made
by one Court is to be enforced by another Court, a certified copy of the order so made shall
be produced to the proper officer of the Court required to enforce the same, and the
production of such certified copy shall be sufficient evidence of such order having been
made; and thereupon the last mentioned Court shall take the requisite steps in the matter for
enforcing the order, in the same manner as if it were the order of the Court enforcing the
same.

285. Appeal from orders:-- Re--hearing of, and appeals from order or decision made or
given in the matter of the winding up of a company by the Court may be had in the same
manner and subject to the same conditions in and subject to which appeals may be had from
any order or decision of the same Court in cases within its ordinary jurisdiction.

Voluntary Winding Up

286. Circumstances in which company may be wound up voluntarily:--(1) A company

may be wound up voluntarily--

(a) when the period, if any, fixed for the duration of the company by the articles expires, or
the even, if any occurs, on the occurrence of which articles provide that the company is to be
dissolved and the company in general meeting has passed a resolution requiring the company
to be wound up voluntarily;

(b) if the company resolves by special resolution that the company be wound up voluntarily;

(c) if the company resolves by extraordinary resolution to the effect hat it cannot by reason of
its liabilities continue its business, and that it is advisable to wind up.

(2) The expression "resclution for voluntarily winding up" when used hereafter in this Part
means a resolution passed under clause (a), clause (b), or clause (c) of this section.

287. Commencement of voluntary winding up.-- A voluntary winding up shall be deemed

to commence at the time of the passing of the resolution for voluntary winding up.

288. Effect of voluntary winding up on status of company.--When a company is wound up

voluntarily, the company shall, from the commencement of the winding up, cease to carry in
its business, except so far as may be required for the beneficial winding up thereof:

Privided that the corporate state and corporate powers of the company shall, notwithstanding
anything to the contarary in its articles, continue until it is dissolved.

289. Notice of resolution to wind up voluntarily.--(1) Notice of any special resolution or

extraordinary resolution for winding up a company voluntarily shall be given by the company
within ten days of the passing of the same by advertisement in the official Gazette, and also
in some news paper, if any circulating in the district where the registered office of the
company is situate.
(2) If a company makes default in complying with the requirements of this section, it shall be
liable to a fine not exceeding on hundred taka for every day during which the default
continues; and also every officer of the company who knowingly and wilfully authorises or
permits the default shall be liable to a like penalty.

290. Declaration of solvency.--(1) Where it is proposed to wind up a company voluntarily,

the directors of the company or, in the case of a company having more than two directors, the
majority of the directors shall at a meeting of the directors held before the date on which the
notice of the meeting at which the resolution of the winding up the company is to be
proposed are sent out, make a declaration verified by an affidavit to the effect that they have
made a full inquiry into the affairs of the company and that, having so done, they formed the
opinion that the company will be able to pay its debts in full within a period, not exceeding
three years, from three commencement of the winding up.

(2) Such declaration shall be supported by a report of the company's auditors on the
company's affairs, and shall have no effect for the purposes of this Act unless it is delivered
to the Registrar for registration before the date mentioned in subsection(1).

(3) A winding up, in the case or which a declaration has been made and delivered in
accordance with sub--sections (1) and

(2), is in this Act referred to as "members voluntars winding up", and, where a declaration has
not been made and delivered as aforesaid, is in this Act referred to as "creditors voluntary
winding up."

Members' Voluntary Winding up

291. Provisions applicable to a members' voluntary winding up.-- The provisions

contained in section 292 to 296 (both inclusive), shall apply in relation to a members
voluntary winding up.

292. Power of company to appoint and fix remuneration of liquidator.--(1) The company
in general meeting shall appoint one or more liquidators for the purpose of winding up the
affairs and distributing the assets of the company, and may fix the remuneration to be paid to
him or them.

(2) On the appointment of liquidator, all the powers of the directors shall cease, except so far
as the company in general meeting or the liquidator, sanctions the continuance thereof.

293. Power to fill vacancy in the office of liquidator.--(1) If a vacancy occurs by death,
resignation or otherwise in the office of liquidator appointed by the company, the company in
general meeting may, subject to any agreement with its creditors, fill vacancy.
(2) For the purpose of filling in the said vacancy, a general meeting may be convented by any
contributory or, if there were more liquidators than one, by the continuing liquidator.

(3) The meeting shall be held in the manner provided by this Act or by articles, or in such
manner as may, on application by any contributory or by the continuing liquidators, be
determined by the Court.

294. Power of liquidator to accept shares, etc as consideration for sale of property of
company.--(1) Where a company is proposed to be, or is in course of being, wound up
altogether voluntarily, and the whole or part of its business or property is proposed to be
transferred or sold to another company, whether a company within the meaning of this Act or
not, in this section called "the transferee company", may with the sanction of a special
resolution of that company conferring either a general authority on the liquidator or an
authority in respect of any particular arrangement, receive, in compensation or part
compensation for the transfer or sale, shares, polices, or other like interests in the transferee
company, for distribution among the members of the transferor company, or may enter into
any other arrangement where by the members of the transferor company may, in lieu of
receiving cash or shares, policies or other like interests or in addition thereto, participate in
the profits of, or receive any other benefit from, the transferee company.

(2) Any sale or other transfer or arrangement in pursuance of this section shall be binding on
the members of the transferor company.

(3) If any member of the transferor company who did not vote in favour of the special
resolution expresses his dissent therefrom in writing addressed to the liquidator and left at the
registered office of the company within seven days after the passing of the special resolution,
by may require the liquidator either to abstain from carrying the resolution into effect or to
purchase his interest at a price to be determined by agreement or any arbitration in manner
hereafter provided.

(4) If the liquidator elects to purchase the member's interest, the purchase money must be
paid before the company is dissolved, and be raised by the liquidator in such manner as may
be determined by special resolution.

(5) A special resolution shall not be invalid, for the purpose of this section by reason only that
it is passed before or concurrently with a resolution for voluntary winding up or for
appointment of liquidators, but if an order is made within a year for winding up the company
by or subject to the supervision of the Court, the special resolution shall not be valid unless
sanctioned by the Court.

(6) The provisions of the Arbitration Act, 1940(X of 1940), other that those restricting the
application of the Act in respect of the subject matter of the arbitration, shall apply to all
arbitrations in pursuance of this section.
295. Duty of liquidator to call general meeting at the end of each year:--(1) In the event
of the winding up continuing for more than one year, the liquidator shall summon a general
meeting of the company at the end of the first year from the commencement of the winding
up and of each succeeding year, or as soon thereafter as may be convenient within ninety
days, of the close of the year, and shall lay before the meeting an account of his acts and
dealings and of the conduct of the winding up during the proceeding year and a statement in
the preseribed form containing the prescribed particulars with respect to the position of the
liquidation.

(2) If the liquidator fails to comply with this section, he shall be liable to a fine not exceeding
five hundred taka.

296. Final meeting and dissolution--(1) As soon as the affairs of the company are fully
wound up, liquidator shall make up an account of the winding of up showing how the
winding up has been conducted and the property of the company has been disposed of, and
thereupon shall call a general meeting the company for the purpose of laying before it the
account, and giving explanation thereof.

(2) The meeting shall be called by advertisement specifying the time, place and object thereof
and published one month at least before the meeting in the manner specified in sub-section
(1) of section 289 for publication of a notice under that sub-- section;

(3) Within one week after the meeting the liquidator shall send to the Registrar a copy of the
account and shall make a return to him of the holding of the meeting and of its date, and if the
copy is not sent or the return is not made in accordance with this sub-section, the liquidator
shall be liable to a fine not exceeding one hundred taka for everyday during which the default
continues:

Provided that, if a quorum is not present at the meeting the liquidator shall in lieu of the said
return make a return that the meeting was duly summoned and that no quorum was present
thereat, and upon such a return being made the provisions of this sub--section as to the
making of the return shall deemed to have been complied with.

(4) The Registrar on receiving the account and either of the returns mentioned in sub-section
(3) shall forthwith register them and on the expiration of three months from the registration of
the return the company shall be deemed to be dissolved:

Provided that the Court may, on the he application of the liquidator or of any other person
who appears to the Court to be interested, make an order deferring the date at which the
dissolution of the company is to effect for such time as the Court thinks fit.

(5) It shall be the duty of the person on whose application an order of the Court under sub--
section (4) is made, within twenty--one after the making of the order, to deliver to the
Registrar a certified copy of the order for registration and if that person fails so to do he shall
be liable to a fine not exceeding one hundred taka for every day during which the default
continues.

Creditor's voluntary winding up

297. Provision applicable to a vonutary winding up:-- The provisions contained in sections
298 to 305, both inclusive, shall apply in relation to a creditors voluntary winding up.

298. Meeting of creditors:--(1) The company shall cause a meeting of the creditors of the
company to be summoned for the day, or the day next following the day, on which there is to
be held the meeting at which the resolution for voluntary winding up is to be proposed, and
shall cause the notices of the said meeting of creditors to be sent by post to the creditors
simultaneously with the sending of the notices of the said meeting of the company at which
such resolution will be proposed.

(2) The company shall also cause notice of the meeting of the creditors be advertised in the
manner specified in sub section (1) of section 289 for the publication of a notice under that
sub--section.

(3) The directors of the company shall--

(a) cause a full statement of the position of the companys affairs together with a list of
the creditors of the company and the estimated amount of their claims to be laid,
before the meeting of creditors to be held as aforesaid; and

(b) appoint one of their number to preside at the said meeting

(4) It shall be the duty of the director appointed to preside at the meeting creditors to attend
the meeting and to preside thereat.

(5) If the meeting of the company at which the resolution for voluntary winding up is to be
proposed is adjourned and the resolution is passed at an adjourned meeting, any resolution
passed at the meeting of the creditors held in pursuance of subsection (1) shall have effect as
if it had been passed immediately after the passing of the resolution for winding of the
company.

(6) If default is made--

(a) by the company in complying with sub--sections(1) and (2);

(b) by the board of directors of the company in complying with sub-- section(3);

(c) by any director of the company in complying with sub--section(4).

the company, every member of the board of directors or director, as the case may be, shall be
liable to a fine not exceeding five thousand taka and, in the case of default by the company
every officer of the company who is in default shall be liable to the like penalty.

299. Appointment of liquidator.-- The creditors and the company at their respective
meetings mentioned in section 298 may nominate a person to be liquidator for the purpose of
winding up the affairs and distributing the assets of the company, and if the creditors and the
company nominate different persons, the person nominated by the creditors shall be the
liquidator, and if no person is nominated by the creditors the person, if any, nominated by the
company shall be liquidator.

Provided that in the case of different persons being nominated, any director, member or
creditor of the company may, within seven days after the date on which the nomination was
made by the creditors, apply to the Court for an order either directing that the person
nominated as liquidator by the company shall be liquidator instead of or jointly with the
person nominated by the creditors, or appointing some other person to be liquidator instead of
the person appointed by the creditors.

300. Appointment of committee of inspection.-- The creditors at the meeting to be held in

pursuance of section 298 or at any subsequent meeting may, if they think fit, appoint a
committee of inspection consisting of not more than five persons and if such a committee is
appointed the company may, either at the meeting at which the resolution for voluntary
winding up is passed or at anytime subsequently in general meeting, appoint such number of
persons as they think fit to act as members of the committee not exceeding five in number:

Provided that the creditors may, if they think fit, resolve that all or any of the persons so
appointed by the company to be members of the committee of inspection and, if the creditors
so resolve, the persons mentioned in the resolution shall not, unless the Court otherwise
directs, be qualified to remain or to act as members, of the committee, and on any application
to the Court may under this provisior the Court may, if it thinks fit, appoint other persons to
act as such members in place of the persons mentioned in the resolution.

301. Fixing of liquidators remuneration and cessation of directors powers.-- The

committee of inspection, or if there is no such committee, the creditors may fix the
remuneration to be paid to the liquidator or liquidators, and where the remuneration is not so
sixed, it shall be determined by the Court.

(2) On the appointment of a liquidator, all the powers of the directors shall cease, except so
far as the committee of inspection, or if there is no such committee, the creditors sanction the
continuance thereof.

302. Power to fill vacancy in the office of liquidator.-- If a vacancy occurs by death,
resignation or otherwise, in the office of a liquidator then the vacancy maybe filled in by the
Court when the liquidator was appointed by the Court or by the creditors where the liquidator
was appointed by creditors.

303. Application of section 294 to a creditors vointary winding up.-- The provisions of
section 294 shall apply the case of a creditors voluntary winding up as in the he case of a
members voluntary winding up with the modification that the powers of the liquidator under
the said section shall not be exercise with the saction either the of Court or of the committee
of inspection.

304. Duty of liquidator to call meeting of company and of creditors at the year and.--(1)
In the event of the winding up continuing for more than one year, the liquidator shall
summon a general meeting of the company and a meeting of creditors at the end of the first
year from the commencement of the winding up, and of each succeeding year, or as soon
thereafter as may be convenient and shall lay before the meetings an account of his acts and
dealing and of the conduct of the winding up during the proceeding year and a statement in
the he prescribed form containing the prescribed particulars with respect to the position of the
winding up.

(2) If the liquidator fails to comply with this section, he shall be liable to a fine not exceeding
five hundred taka.

305. Final meeting and dissolution.-- (1) As soon as the affairs of the company are fully
wound up, the liquidator shall make up an account of the winding up showing how the
winding up has been conducted and the property of the company has been disposed of, and
thereupon shall call a general meeting of the company and a meeting of the creditors, for the
purpose of laying the account before the meetings and giving any explanation thereof.

(2) Each such meeting under sub-section (II) shall be called by advertisement specifying the
time, place and object thereof and published one month at least before the meeting in the
manner specified in sub-section (1) of section 289 for the publication of a notice under that
sub--section.

(3) Within one week after the date of the meetings, or, if the meetings, are not held on the
same date, after the date of the later meeting, the liquidator send to the Registrar a copy of the
account, and shall make a return to the him of the holding of the meetings and of their dates,
and if the copies are not sent or the return is not made in accordance with this sub--section,
the day during which the default continues:

Provided that, if a quorum, which for the purpose of the this section shall be two person, is
not present at either of such meetings the liquidator shall, in lieu of such return, make a return
that the meeting was duly summoned and that no quorum was present thereat, and upon such
a return being made the provisions of this sub-section as to the making of the return shall, in
respect of that meeting be deemed to have been complied with (4) The Registrar, on receiving
the account and in respect of each such meeting.
(4) The Registrar on receiving the account and any of the returns mentioned in sub-section
(3), shall forthwith register them, and on the expiration of three months from the registration
there of the company shall be deemed to be dissolved:

Provided that the Court may, on the application of the liquidator or of any other person who
appears to the Court to be interested, make an order deferring the date at which the
dissolution of the company is to take effect for such time as the Court thinks fit.

(5) It shall be the duty of the person on whose application an order of the Court under sub--
section this(4) is made, within twenty one days after the making of the of the order, to deliver
to the Register a certified copy of the order for registration, and if that person fails to do so,
he shall be liable to fine not exceeding one hundred take for every day during which the
default continues.

General provision for voluntary winding up

306. Provisions applicable to every voluntary winding up.-- The provisions contained in
section 307 to 314, both inclusive, shall apply to every voluntary winding up whether a
members or a creditors winding up.

307. Distribution of property of company -- Subject to the provisions of this Act as to

preferential payments, the property of a company shall, on its winding up, be applied in
satisfaction of its liabilities pari passu and, subject, to such application, shall unless the
articles otherwise provide, be distributed among the members according to their rights and
interested in the company.

308. Powers and duties of liquidator in voluntary winding up.--(1) The liquidator may--

(a) in the case of a members voluntary winding up with the sanction of an

extraordinary resolution of the company, and in the case of a creditors' voluntary
winding up, with the sanction of either the court or the committee of inspection,
exercise any of the powers give by clauses (d), (e),(f) and (h) o f section 262 to a
liquidator in a winding up; but the exercise by the liquidator of the powers given by
this clause shall be subject to the control of the Court and any creditor or contributory
may apply to the Court with respect to any exercise or proposed exercise of any of
these powers;

(b) without the sanction referred to in clause (a), exercise any of the other powers by
this Act given on the liquidator in a winding up by the Court:

(c) exercise the power of the Court under this Act of settling a list. of contributories;
and the list of contributories; shall be prima facie evidence of the liability of the
persons named there in the be contributories;
 (e) summon general meetings of the company for the purpose of obtain obtaining the
sanction of the company by special or extraordinary resolution of for any other
purpose he may think fit.

(2) The liquidator shall pay the debts of the company and shall adjust the rights of the
contributories; among themselves.

(3) When several liquidators are appointed, any power given by this Act may be exercised by
such one or more of the them as may determined at the time of the appointment, or, in default
of such determination, by any number not loss than two.

309. Power of Court to appoint and remove liquidator in voluntary winding up--(1) If,
from any cause whatever, there is no liquidator acting, the Court may appoint a liquidator.

(2) The Court may, on cause shown, remove a liquidator and appoint another liquidator, and,
in case of such removal shall immediately send a copy of the removal order to the removed
liquidator.

310. Notice by liquidator of his appointment.--(1) The liquidator shall, with--in twenty one
days after his appointment, deliver to the Registrar for registration a notice of his
appointment in the form prescribed.

(2) If the liquidator fails to comply with the requirements of this section, he shall be liable to
a fine not exceeding one hundred taka for every day during which the default continues.

311. Arrangement when bindings on creditors.- Any arrangement entered into between a
company about to be, or in the course of being, wound up and its creditors shall, subject to
the right of appeal under sub-section (2) be binding on the company if sanctioned by an
extraordinary resolution, and also on the creditors if acceded to by there--fourths in number
and value of the creditors.

(2) Any creditor or contributory may, within three weeks from the completion of the
arrangement, appeal to the Court against it, and the Court may thereupon, as it thinks just,
amend, vary or confirm the arrangement.

312 Power to apply to Court to have questions determined of powers exercised.--(1) The
liquidator or any contributory or creditor may apply to the Court to determine any questior
arising in the winding up of a company, or to exercise, as respects the enforcing of alls,
staying of proceedings or any other matter all or any of the powers which the court might
exercise if the company were being wound up by the Court.
(2) The liquidator or any creditor or contributory may apply for order settings aside any
attachment, distress or execution put into force against the estate or effects of the company
after the commencement of the winding up.

(3) The application under sub-section (2) shall be made--

(a) if the attachment, distress or execution is levied or put into force by the High
Court Division, to thee High Court Division: and

(b) if the attachment, distress or execution is levied or put into force by any other
Court, to the Court having jurisdiction to wind up the company.

(4) Thee Court, if satisfied that the determination of the question of the required exercise of
power or the order applied for will be just and beneficial, may accede wholly or partially to
the application on such terms and conditions as it thinks fit, or may make such other order on
the application as it thinks just.

313. Cost of voluntary winding up.-- All costs, charges and other expenditure properly
incurred in the winding put including the remuneration of the liquidator, shall subject to the
rights of secured creditors, if any, be payable out of the assets of the company in priority to
all other claims.

314. Saving for rights of creditors and contributory.-- The winding up of a company shall
not bar the right of any creditor or contributory to apply for a winding up by the Court, but in
the case of an application by a contributory the Court must be satisfied that the rights of the
contributories will be prejudiced by a voluntary winding up.

315. Power of Court to adopt proceeding of voluntary winding up.-- Where a company is
being wound up voluntary and an order is made for winding up by the Court, the Court may,
if it think fit, by the same or subsequent order, provide for the adoption of all or any of the
proceedings in the voluntary winding up and also for any incidental on consequent situation.

Winding up subject to supervision of Court

316. Power to order winding up subject to supervision.-- when a company has by special
or extraordinary resolution, resolved to wind up voluntarily the Court may make an order that
the voluntary winding up shall continue, but subject to
such supervision of the Court, and with such liberty for creditors, contributories; or other to
apply to the court and generally on such terms and conditions as the court thinks just.

317 Effect of petition for winding up subject to supervision.--A petition for continuance of
voluntary winding up subject to the supervision of the Court shall, for the purpose of giving
jurisdiction to the court over suits, be deemed to be petition for winding up by the court.
318. Court may have regard to wishes of creditors and contributories.--The Court may,
in deciding between a winding up by the Court and winding up subject to supervision, in the
appointment of liquidators, and all other matter
relating to the winding up subject to supervision have regard to the wishes of the creditors or
contributories; as proved to it by any sufficient evidence.

319. Power of Court to appoint and remove liquidators.--(1) Where an order is made for a
winding up subject to supervision, the Court may by the same or any subsequent order
appoint any additional liquidator.

(2) A liquidator appointed by the Court under this section shall have the same powers, be
subject top the same obligations and in all respects stand the same position ad if he had been
appointed by the company pay.

(3) The Court may removed any liquidator so appointed by the Court or any liquidator
continued under der the supervision order and fill and vacancy occasioned by the removal or
by death or resignation.

320. Effect of supervision order.--(1) Where an order is made for a winding up subject to
supervision, the liquidator may, subject to any restrictions imposed by the Court, exercise all
this powers, without the sanction or intervention of the Court , in the same manner as if the
company were being wound up altogether voluntarily.

(2) Expect as provided in sub-section (1) , and save for the purposes of section 279, any order
made by the Court for a winding up subject to the supervision of the Court shall for all
purposes, including the staying of suits and other proceeding, be deemed to be an order of the
court for winding up of the company by the Court and shall confer full authoritly on the
Court to make calls or to enforce calls made by the liquidators, and to exercise all other
powers which it might have exercise if an order had been made for winding up the company
altogether by the Court.

(3) In the construction of the provision whereby the Court is empowered to direct any act or
thing to be done to or in favour of the official liquidator, the expression ``official liquidator''
shall be deemed to mean the liquidator conducting the winding up subject to the supervision
of the Court.

321. Appointment of liquidators subject to supervision to the office of official

liquidators-- Where an order has been made for the winding up of a company subject to
supervision, and order is afterwards made for winding up by the Court, the Court may, by the
last--mentioned order or by any subsequent order, appoint the liquidators for the first
mentioned winding up or any of them either provisionally or permanently, and wither with or
without the addition of any other person, to be official liquidator in the winding up by the
Court.
Supplemental Provisions

322. Avoidance of transfers, etc. after commencement of winding up.-- (1) In the case of
voluntary winding up, every transfer of shares, except, transfers made to or with the sanction
of the liquidator, and every alteration in the status of the member of the company made after
the commencement of the winding up shall be vied.

(2) In the case of a winding up by or subject to the supervision of the Court, every disposition
of the property,, including actionable claims of the company, and every transfer of shares,
alteration in the status of its members, made after the commencement of the winding up shall
the Court otherwise orders be voids.

323. Debts of all descriptions to be proved.--In every winding up, subject in the case of
insolvent companies to the application in accordance with the provisions of this Act or the
law of insolvency, all debts payable on a contingency, and all
claims against the company, present or future certain or contingency be admissible to proof
against the company, a just estimate being made, so far as possible, of value of such debts or
claims as may be subject to any contingency or for some other reason do not bear a certain
value.

324. Application of insolvency rules in winding up of insolvent companies.-- In the

winding up of an insolvency, all debts payable on a contingency, and all claims against the
company, present or future, certain or contingent, shall be admissible to proof against the
company, a just estimate being made , so far as possible, of value of such dbts or claims as
may be subject to any contingency or for some other reasons do not bear a certain value.

324. Application of insolvency rules in winding up of insolvent companies.-- In the

winding up of an insolvent company the same rules shall previal and be observed with regard
to the respective eights of secured and unsecured creditors and to debts provable and the
valuation of annuities and future and contingent liabilities as are in force for the time being
under the law of insolvents with respect to the estate of persons adjudged insolvent; and all
persons who in any such case would be entitled to proved for and receive dividends out of the
assets of the company may come in under the winding up, and make such claims against the
company as they respectively are entitled to by virtue of this section.

325. Preferential payments.--(1) In a winding up there shall be paid in priority to all other
debts--

(a) all revenue, taxes, cesses and rates, whether payable to the Government or to a
local authority due from the company at the date, specified in sub--section(5),
hereinafter referred in this sub--section as the said date and having become due and
payable Within the twelve months next before the said ate;
 (b) all wages or salary of any clerk and other servant in respect of service rendered to
the company within the two months next before the said date, not exceeding one
thousand taka for each clerk or servant;

(c) all wages of any labourer or workman, not exceeding five hundred for each,
whether payable for the time or piece--work, in respect of services rendered to the
company within the two months next before the said date:

(d) compensation payable under the Workmen's Compensation Act, 1923 (VIII of
1923), in respect of the death or disablement of any officer or employee of the
company; and

(f) the expenses of any investigation held in pursuance of clause (c) of section 195 of
this Act.

(2) the debts mention din sub-section(1) shall--

(a) rank equally among themselves and be paid in full , unless the assets are
insufficient to meet them, in case they shall abate in equal proportion; and

(b) so far as the assets of the company available for payment of general creditors are
insufficient to meet them, have priority over the claims of holders of debentures under
any floating charge created by the company and be paid accordingly out of any
property comprised in or subject to that charge.

(3) Subject to the retention of such sums as may be necessary for the costs and expenses of
the winding up, the foregoing debts shall be discharged forth with so far as the assets are
sufficient to meet them.

(4) In the event of any person distraining or having distrained on nay goods or effects of the
company within three months next before the date of a winding up order, the debts to which
priority is given by this section shall be a first charge on the good or effects so distrained on
the proceeds of the sale thereof:

Provided that in respect of any money paid under any such charge thee said persons shall
have the same rights or priority as the person to whom the pay

(5) The date referred to in sub-section (1) (a) is--

(a) in the case of a company ordered to be wound up compulsorily which had not
previously commenced to be wound up voluntarily the date of the winding up order;
and

(b) in any other case, the date of the commencement of the winding up.
326. Disclaimer of property.--(1) Where any part of the property of company which is being
wound up consists of land of any tenure burdened with onerous convenants, of shares, or
stock in other companies, of unprofitable contracts or of any other property that is unsalable,
or not readily saleable, by reason of its binding the possesses there of the performance of any
onerous act, or to the payment of any sum of money, the liquidator of the company,
nontwithstanding that he had endeavored to sell or has takenpossession of the property, or
had excised any act of ownership in relation thereto, may with the leave of the Court and
subject to the provisions of this the commencement of the winding up or such extended
poriod as may be allowed by the Court disclaim the property:

Provided that, where any such property has not come to the knowledge of the liquidator
within one months after the commencement of the winding up, the power under this section
of disclaiming the property may be exercised at any time within twelve months after he has
become aware thereof or such extended period as may be allowed by the Court.

(2) The disclaimer shall operate to determine, as from the date of disclaimer, the rights,
interest, and liabilities of the company, and the property of the company, in or in respect of
the property disclaimed, but shall not, except so far as is necessary for the purpose of
releasing the company and the property of the company from liability affect the rights or
liabilities of any other person.

(3) The Court, before or on granting leave to disclaim, may require such notice to be given to
persons interested and imposed such terms as a condition or granting leave, and make such
other order in the matter as the Court thinks just.

(4) The liquidator shall not be entitled to disclaim any property under this section in any case
where an application writing has been made to him by nay persons interested in the property
requiring him to decide whether he will or will not disclaim and the liquidator has not within
a period of thirty days after he receipt of the application or such further time as may be
allowed by the Court , given notice to the applicant that he intends to apply to the Court for
leave to disclaim, and in the case of a contract, if the liquidator, after such an application as
aforesaid, does not with the said period or further period disclaim the contract, the company
shall be deemed to have adopted it.

(5) The Court may, on the application of any person who is, as against the liquidator, entitled
to the benefit or subject to eh burden of a contract made with the company, make an order
rescinding the contract on such terms as to payment either party of damages for the
nonperformance of contract, or otherwise as the Court thinks just , and any damages payable
under the order to any such person may be proved by him as debt in the winding up.

(6) The Court may, on an application by any person who wither claims any interest in any
disclaimed property or is under any liability not discharged by this Act in respect of any
disclaimed property and or hearing any such persons as it thinks fit, make an order for the
vesting of the properly in or seem just that the peoperty should be delivered by way of
compensation for such liability as aforesaid, or a trustee for him and on such terms as the
Court thiks just; and on any such vesting order being made, the property comprised therein
shall vest accordingly in the person therein named in that behalf without any conveyance or
as signment for the purpose:--

Provided that, where the property disclaimed is of a leasehold nature, the Court shall not
make a vesting order in favour of any person claiming under the company whether as under--
lessee or as mortgagee expect upon the terms of making that person--

(a) Subject the same liabilities and obligations as those to which the company was subject
under the lease or mortgage in respect of the property at the commencement of the winding
up; or

(b) If the Court thinks fit, subject only to the same liabilities and obligations as if the lease
had been assigned to that person at that date;

and in either, if the case so requires, as if the lease had comprised only the property
comprised in vesting order, and any mortgagee or under lease declining to accept a vesting
order up on such terms hall be excluded all interest in and security upon the property, and if
there is not person claiming under the company who is willing to accept and order upon such
terms, the Court shall have power to vest the estate and intrust of the company in the property
in any person liable, either personally or in representative, and either alone or jointly with
company, to perform the lessee's convenants in the lease , freed and discharged from all
estates, incumbranees and interests created therein by the company.

(7) Any person injured by the operation of disclaimer under this section shall be deemed to be
a creditor of the company to the amount of the injury, and may accordingly prove the amount
as a debt in the winding up.

327 Fraudulent preference.--(1) Any transfer, delivery of goods, payment, execution or

other act relating to property which would, if made or done by or against an individual be
deemed in his insolvency a fraudulent preference, shall is made or done by or against a
company, be deemed and invalid accordingly.

(2) For the purpose of this section, the presentation of a petition for winding up in the case of
winding up by or subject to the supervision of the Court , and a resolution for winding up in
the case of a voluntary winding up, shall be deemed to correspond with the act of insolvency
in the case of an individual.,

(3) Any transfer or assignment by a company of all its property to trustees for the benefit of
all its creditors shall be void.
328. Avoidance of certain attachments, executions, etc.--(1) Where any company in being
wound up by or subject to the supervision of the Court, any attachment, distress or executuon
put in force without leave of the Court against the estate or effects or any sale held without
leave of the Court of any properties of the company after the commencement off the winding
up shall be void.

(2) Nothing in this section applies to proceedings by the Government.

329. Effect of charge created after commencement of winding up--A floating charge on
the undertaking or property of the company created with in ninety day of commencement of
the winding up shall unless it is proved that the company immediately mediately after the
creation of the charge was solvent , be invalid except top the amount of any cash paid to the
company at the time of or subsequently to the creation of , and in consideration for the
charge, together with interest on the amount at the rate of five per cent, per annum.

330 General scheme of liquidation may be sanctioned. --(1) The liquidator may with the
sanction of the Court when the Court or subject to the supervision of the Court, and with the
sanction of an extraordinary resolution of the company in the case of a voluntary winding up,
do the following things or any of them:--

(i) pay to any classes of creditor in full;

(ii) make any compromise or arrangement with creditors or persons claiming to be

creditors or alleging themselves to have any claim, present or future, whereby the
company may be rendered liable;

(iii) compromise all calls and liabilities to calls, debts and liabilities, capable of
resulting in debts, and all claims, present or future, certain or contingent, subsisting or
supposed to subsist between the company and a contributory or alleged contributory
or other debtor or person apprehending liability to the company, and all questions in
any way relating to or affecting the assets or the winding up of the company, on such
terms as may be agreed, and take any security for the discharge of any such call debt,
liability or claim, and give a complete discharge in respect thereof.

(2) The exercise by the liquidator of the powers under this section shall be subject to the
control of the Court and any creditor or contributory may apply to the Court with respect to
any exercise or proposed exercise of any these powers.

331. Power of Court to assess damages against delinquent director, etc.--(1) Where, in
the course of winding up a company in appears that nay person who has taken part in the
formation or promotion of the company or any past or present director, manager or liquidator,
or any officer of the company properly of the company, or been guilty of misfea*ance or
breach of trust in relation to the company the Court may, on the application of the liquidate or
of any creditor or contributory made within three years from the date of the first appointment
of a liquidator in the winding up or of the mi*application, retainer **sfea+ance of liquidator
in the winding up or of the misapplication, retained misfea*ance or breach of trust, as the
case may be whichever is longer examine of the conduct of the promoter, director manage
liquidate or office and may compel him to repay or restore the money or property or any
partnered of respectively with interest at such rate as the Court thinks just, or to contribute
such sum to the assets of the company by way of compensation in respect of the
misapplication, retainer, misfeasance or breach or trust, as the Court thinks just.

(2) This section shall apply notwithstanding that offence is one for which the offender many
criminally prosecuted.

332. Penalty for falsification of book.--In any director, manager, officer or contributory of
any company being wound up destroys, multilates, alters of falsifies or fraudulently secrets
any books papers or securities or makes or is privy to the making of any false or fraudulent
entry in any register book of account or document belonging to the company with intent to
def*aud or deceive any person, he shall be liable to imprisonment for a term which may
extend to seven years, and shall also be liable to fine.

333 Prosecution of delinquent directors.--(1) If it appears to the Court in the course of a

winding up by, or subject to the supervision of the Court that an past or present director,
manager or other officer, or any member of the company has been guilty of any offence in
relation to the company for which he is criminally liable the Court may either on the
application of any person intrusted in the winding up of its own motion, direct the liquidate
wither himself to p[prosecute the offender or to refer the matter to the Registrar.

(2) If it appears to the liquidator in the course of voluntary winding up that nay past or
present director, manager of other offence or any member of the company has been guilty of
any offence in relation to the company for which he is criminally liable he shall forth with
report the matter to the Registrar and shall furnish to him such information and give it him
such access to and facilities for inspecting and taking copies of any documents being,
information or document in the possession or under the control of the liquidator relating to
the matter in question, as he may require.

(3) Where any report is made under sub--section (2) to the Registrar, he may if he thinks fit,
refer the matter to the Government for further inquiry, and the Government shall thereupon
investigate the matter and may if they think it expedient, apply to the Court for an order
conferring on any person designated by the Government for the purpose with respect to the
company concerned all such powers of investigating the affairs of the company as are
provided by this Act in the case of a winding up by the Court.

(4) If on any report to the Registrar under sub--section (2) it appears to him that the case is
not one in which proceeding ought to be taken by him, he shall inform the liquidator
accordingly, and thereupon, subject to the previous sanction of the Court, the liquidator may
himself take proceedings against the offender.
(5) It it appears to the Court in the course of a voluntary winding up that any past or present
director, manager or other officer or any member of the company has been guilty as
aforesaid, and that no report with respect to the matter has been made by the liquidator tot he
Registrar, the Court may, on the abolition of any person interested in the winding up or of its
won motion, direct the liquidator to make such a report, and on a report being made
accordingly, the provision of this action shall have effect as though the report as been made
in pursuance of the provision of sub-section(2).

(6) If a matter is reported or referred to the Registrar under this section and considers that
prosecution ought to be instituted there on, he shall place the papers before the Attorney
General or the public prosecutor and shall if advised to do so, institute proceedings :

Provided that no prosecution shall be undertake without first giving the accursed person an
opportunity of making a statement in writing to the Registered and of being headed thereon.

(7) Notwithstanding anything contained in the Evidence Act, 1872(1 of 1872), when any
proceedings are instituted under this section it shall be duty of the liquidator and of every
officer and agent of the company past and present other than the defendant in the
proceedings, to give all assistance in connection with the prosecution which he is reasonably
able to give, and for the purposes of this sub--section the expression "agent'' in relation to a
company shall be deemed to include any banker or legal adviser if the company and any
person employed by the company as auditor, whether that person is or is not an officer of the
company.

(8) If any person fail or neglects to give assistance in manner required by sub-section (7), the
Court may on the application of the Registrar direct that person to comply with the
requirements of the said sub-section, and where any such application is made with respect to
a liquidator, the Court may unless it appears that the failure on neglect to comply was due to
the liquidator not having in his hands sufficient assets of the company to enable him so to do
direct that the costs of the application shall be borne by the liquidator personally.

334. Penalty for false evidence:-- If any person, upon any examination authorised under this
Act, or in any affidavit, depositing or solemn affirmation, in or about the winding up of any
company under this Act, or otherwise in or about any matter arising under this Act
intentionally give false evidence, he shall be liable to improisonment for a term which may
extend to seven years, and shall also be liable to find.

335. Penal provisions--(1) If any person, being a past or present director, managing agent
manager or other officer of a company which at the time of the commission of the alleged
offence is being wound up in any manner.--

(a) does not to the best of his knowledge and belief fully and truly discover to the
liquidator all the property, moveable and immovable of the company, and how and to
whom and for what consideration part as has been disposed of in the ordinary way of
the business of the company, or

(b) does not deliver up to the liquidator, or as he directs all such part of movable and
immovable property of the company as in this custody or under hiscontrol, and which
he is required by law to deliver, or

(c) does not deliver to the liquidator, or as the directs all books and papers on his
custody or under his control belonging to the company and which he is required by
law to deliver, or

(d) with in twelve months next before the commencement of the winding up or at any
time thereafter, conceals anypart of the property of the company to the value of one
hundred taka or up wards or conceals any debt to or from the company, or

(e) within twelve months next before the commenement of the winding up or at any
time thereafter fraudulently remove any part of the property of the company to the
value of one hundred taka or upwards, or

(f) makes an material omission in any statement relating to the affairs of the company
or

(g) knowing or believing that a false debt has been proved by any person under
winding up, fails within the period of a month to inform the liquidator thereof, or

(h) after the commencement of the winding up prevents the production of any book or
paper affecting or relating to the property or affairs of the company, or

(i) within twelve months next before the commencement of the winding up or any
time thereafter, conceals destroys, mutilates or falsifies, or is privy to the
concealment, destruction, mutilation or falsification of any book or paper affecting or
relating to the property or affairs of the company or

(j) within twelve months next before the commencement of the winding up or at any
time thereafter makes or is privy to the making of any false entry in any book or paper
affecting or relating to the property or affairs of the company, or

(k) within twelve months next before the commencement of the winding up or at any
time thereafter fraudulently parting with altering or making any omission any
document affecting or relating to the property or affairs of the company, or

(l) after commencement of the winding up or at any meeting of the creditors of the
company within twelve months next before the commencement of the winding up ,
 attempts to account for any part of the property of the company by fictitious losses or
expenses, or

(m) within twelve months next before the commencement of the winding up or at any
time thereafter any false representation or other fraud, obtained any property for or on
behalf of the company on credit which the company does not subsequently pay or

(n) within twelve months next before the commencement of the winding up or at any
time thereafter, under the false pretence that the company is carrying on its business,
obtains on credit, for or on behalf of the company any property which the company
does not subsequently pay for, or

(o) within twelve months next before the commencement of the winding up or at any
time thereafter pawns, pledges, or disposes of any property of the company which
such pawning pledging or disporting is in the ordinary way of the biasness of the
company, or

(p) is guilty of any false representation or other fraud for the purpose of obtaining the
consent of the creditors of the company or any of them to an agreement with reference
to the affairs of the company or to the winding up.

he shall punishable, in the case of the offence mentioned in clauses (m) (n) and (o) with
imprisonment for a term not exceeding seven years,, and in the case of any offence,
mentioned in other clauses with imprisonment for a term not exceeding tow years:

Provided that it shall be a good defence to a charge under any of clauses (b),(c),(d),(f),(n),
and(o) if the accused proves that he had no intent to defraud, and to a charge under any of the
clauses (a) (h) (i) and (j) if he proves that he had no intent to conceal the state of affairs of the
company or to defeat the law.

(2) Where any person pawn, pledges or disposes of any property in circumstances which and
amount to an offence under clause (o) of sub-section (1), every person who takes in pawned,
pledged or disposed of in such circumstances as aforesaid shall be punishable with
imprisonment for a term not exceeding three years.

336. Meeting to ascertain wishes of creators or contributions.(1) where by this Act the
Court is authorized in relation to winding up have regard to the wishes of creditors or
contributors,, as proved to it by any sufficient evidence, the Court may if it thinks for the
purpose of ascertaining those wishes, direct meetings of the creditors or contributors to be
called, held and conducted in such manner as the court direct and may appoint a person to act
as Chairman of any such meeting and to report the result therefor the Court.

(2) In the case of creditors, regard shall be had to the value of each creditors debt.
(3) In the case of contributories regard shall be had to number of votes conferred on each
contributory by the articles.

337. Evidentially value of documents of company-- Where any company is being wound
up, all documents of the company and of the liquidator shall as between the contributors of
the company, be prima-facie evidence of the truth of all matters purporting to therein
recorded.

338. Inspection documents.-- After and order for a winding up by or subject to the
supervision of the Court the Court may make such order for in pectin creators and
contributors, of the company of its documents as the Court thinks just, and any documents in
the possession of the company may be inspected creditors or contributors accordingly but not
, further or otherwise.

339. disposal of document of company:--(1) when a company has been wound up and is
about to be dissolved the documents of the company and of the liquidator any be
disposed[hosed of a follows, that is to say:--

(a) in the case of a winding up by or subject OT the supervision of the Court, in such
way as the Court directs;

(b) in the case of voluntary winding up, in such way as the company by extraordinary
resolution directed.

(2) After three years from the dissolution of the company no responsibility shall rest on the
company of the liquidators, or any person to whom the custody of the documents has been
committed, by reason of the same not being forthcoming to any person claiming to be
interested therein.

340 Power of Court to declare dissolution of comma void: --(1) Where a company has
been dissolved, the Court may, at any time within two years of the date of the dissolution on
an application being made for the purpose by liquidator of the company or by any other
person who appears to the Court to be interested make an order upon such terms as the Court
to the Court to be interested, make an order upon such terms as the Court thinks fit, declaring
the dissolution to have been void, and thereupon such proceedings may be taken as might
have been taken if the company had not been dissolved.

(2) It shall be the duty of the person on whose application the order was made, within twenty-
one days after making of the order, to file with the Registrar a certified copy of the order, and
if that person fails so to do, he shall be liable to a fine not exceeding one hundred taka for
everyday during which he default continues.

341 Information as to pending liquidations : (1) where a company is being wound up, if
the winding up is not concluded--one year after its commencement the liquidate, shall, once a
year and at intervals of not more that twelve months until the winding up is concluded, file in
the Court or with the Registrar, as the case may be statement in the prescribed form and
containing the prescribed particulars with respect to the proceeding in and the position of the
liquidation.

(2) Any person stating himself in writing to be a creditor or contributory of the company shall
be entitled, by himself or by his agent, at all reasonable time, on payment of the prescribed
fee, to inspect the statement and to receive a copy thereof or extract therefrom; but any
person untruthfully so stating himself to be a creditor or contributory shall be deemed to be
guilty of an offence under section 182 of the Penal Code (XLV of 1860) , and shall be
punishable accordingly on the application of the liquidator.

(3) If a liquidator fails to comply with the requirements of this section, he shall be liable to a
fine not exceeding one thousand taka for each day during which the default continues.

(4) When the statement is filed in Court, a copy shall simultaneously be filed with the
Registrar and shall be kept by him along with other records of the company.

342. Payment of liquidator into bank:-- (1) Every liquidator of a company which is being
wound up by the Court shall in such manner and at such times as may be prescribed, pay the
money received bn him in to a scheduled tanks as defined in the Bangladesh Bank Order,
1972 (P.O. No. 127 of 1972):

Provided that if the Court is satisfied that for the purpose of carrying on the business of
company or obtaining advances or for any other reason it is for the advantage of the creditors
or contributors that the liquidator should have an account with any other bank, the Court may
authorized the liquidator it make his payment into or out of such other bank as the Court may
select and there upon those payments shall be made in the prescribed manner.

(2) It any liquidator at any time retains for northern 10 day's sum exceeding five hundred taka
or such other amount as the Court any in any particular case authoresses him to retain the
unless he explains the retention in excess all the rate of twenty per cent annum and shall be
liable to disallowance of all or such part of his remuneration as the Court may think just and
to be removed from his office by the Court and shall be liable to pay any expenses
occasioned by reason of his default.

(3) A liquidator of a company which is being wound up shall open a special banking account
and pay all sums received by him a liquidator into such account.

343. Unclaimed dividend and undistributed assets to be paid to Combines Liquidation

Account:
(1) Where any company is being wound up, if the liquidator has in his hands or under his
control any money of the company presenting unclaimed dividends payable to any creditor or
undistributed asset refundable to any contributory which have remained unclaimed for one
hundred and eighty days after the date on which they become payable or refundable that
liquidation shall forthwith pay the said money into the Bangladesh Bank to the credit of the
Government in an account to be called the Companies Liquidation Account" and the
liquidator shall on the dissolution of the company, similarly pay into the said account any
money representing unclaimed divided or undistributed assets in his hand at the date of
dissolution.

(2) the liquidator shall, when making any payment referred to in sub section (1) furnish to
such officer as the Government may appoint in this behalf a statement in prescribed form
setting forth in respect of all sum included in such payment the nature of the sums, the names
and last know addressed of the persons entitled to participate therein, the amount to which
each is entitled and the nature of his claim thereto, and such other particulars as may be
prescribed.

(3) the receipt of the Bangladesh Bank for any money paid to it under sub-section(1) shall be
an effectual discharge of the liquidator in respect thereof.

(4) where the company is being wound by the Court the liquidator shall make the payment
referred to in sub-section(1) by transfer from the special banking account referred to in sub-
section(3) of section 342, and where the company is being in wound up voluntarily or subject
OT the supervision of the Court the liquidator shall when filing a statement it pursuance of
sub-section (1) of section 341, indicate the sum to money which is payable to the Bangladesh
Bank under subsection (1) of this section which he has had in his the dat to which the said
statement is brought down, and shall, within fourteen days of the date of filing the said
statement, pay that sum into the Companies Liquidation Account.

(5) Any person claiming to be entitled to any money paid into the Companies Liquidation
Account in pursuance of this section may apply to the court for an order for payment thereof,
and the Court, if satisfied that the person claiming is entitled may make an order for the
payment OT that person of the sum or the asset due to him;

Provided that before making such order the Court shall cause a notice to be served on such
officer as the Government any appoint in this behalf calling on the officer to show cause
within thirty days from the dat of the service of the notice why the order should not be made.

(6) Any money paid into the Companies Liquidation Account is pursuance of this section,
which remains unclaimed thereafter for a period of fifteen years, shall be transferred to the
general revenue account of the Government; but any claim preferred under sub-section (5)
any money or asset to transferred shall be allowable as if such transfer had not been made, the
order for payment on such claim being treated as an order for refund of revenue.

(7) Any liquidator retaining any money or asset which should have been deposited by him
into the Combines Liquidation Account under this section shall pay interest on the amount
retained at the rate of twenty percent annum and shall also be liable to pay any expense
occasioned by reason of his default and where the winding up is by or under the supervision
of the Court, he shall also be liable to disallowance of all or such part of his remuneration as
the Court may think just and to be removed from this office by the court.

(8) For the purposes of this section, the liquidator may with the sanction of the Court or as the
case may be, of the Government, sellout the undistributed asset referred to in sub-section(1)
and deposit the sale proceed in the company's Liquidation Account and it may be accordingly
be disposed under this section.

344. Court or person before whom affidavit may be sworn:--(1) Any affidavit required to
be sworn in Bangladesh before any Court, Judge or person lawfully authorized to take and
receive affidavit or in any place outside Bangladesh before a Bangladesh Consul or Vic-
Consul.

(2) All Court Judges, Justices, Commissioners, and persons acting judicially in Bangladesh
shall take judicial notice of the seal or stamp or signature as the case, may be, of any such
Court Judge, person, Consul or Vice-Consul, Consul attached, appended or subscribed to any
such affidavit or to any other document to be used for the purposes of this part.

RULES

345. Power of Supreme Court to make rules:--(1) The Superme Court may from time to
time, make rule consistent with the Code of Civil procedure 1908 (Act of 1908) concerning
the following matters namely:--

(a) the mode of proceedings to be held for winding up of company in the High Court
Division and in a court subordinate thereto.

(b) in the case of voluntary winding up by members or creditors, for the holding of
meetings of creditors and members in connection with proceedings under section 228
of this Act;

(c) giving effect to the provision of this Act for the purpose of reduction of share
capital and sub-division of the shares of a company;

(d) all applications to be made to the Court under the proving of this Act.

(2) The Court shall make rules providing for all matters which by this Act, are required to be
prescribed.

(3) without prejudice to the generality of the foregoing power the Supreme Court may such
rules enable or require all or any of the powered and duties conferred and imposed on the
Court by this Act in respect of the matter following to exercised or performed by the say the
powers and duties of the Control in respect of-

(a) holding and conducting meetings to ascertain the wishes of creditors and
contributories ;

(b) Settling list of contributors and rectifying the register of members where required,
and collecting and applying the assets of the company

(c) requiring delivery of property or documents to the liquidator;

(d) making calls;

(e) fixing a time within which debts and claims must be proved.

Provided that the official liquidator shall not without the special leave of the Court, rectify the
register of members, and shall not make any call without the special leave of the Court.

Removal of defunct Companies from Register.

346. Registrar may strike defunct company off Registrar:-- (1) where the Registrar has
reasonable cause to believe that a company is not carrying on business or in operation, he
shall send to the company by post a letter inquiring whether the company is carrying on
business or in operation;

(2) If the Registrar does not within thirty days of sending the letter receive any answer
thereto, he shall within fourteen days, after the expiration of the said thirty days send to the
company by post a registered letter referring to the first letter and stating that no answer
thereato has been received and that if an answer is not received to the second letter with thirty
days from the date, thereof, a notice will be published in the official Gazette with a view to
striking the name of the company off the register;

(3) If the Registrar either receives an answer from the company to the effect that it is not
carrying on business or in operation, or not within thirty days after sending the second letter
receive any answer, he may publish in the Official Gazette and send to the company by post a
notice that at the expiration of ninety days from the date of that notice, the name of the
company mentioned therein will, unless cause is shown to the contrary, be struck off the
register and the company will be dissolved and in such a case the Registrar may send a copy
of the notice to the company while in sending it to the concerned authority for its publication
official Gazette;

(4) If, in any case where a company is being wound up, the Registrar has reasonable cause to
believe either that no liquidator is acting or that the affairs or the company are fully wound up
and the returns required to be made by the
liquidator have not been made for a period of six consecutive months after notice by the
Registrar demanding the returns, has been sent by post to the company or to the liquidator at
his last known place of business, the Registrars may publish in the official Gazette and sent to
the company a like notice as is provided in the sub-section (3);

(5) At the expiration of the time mentioned in the notice the Registrar may unless cause to the
contrary is previously shown by the company, strike its name on the register and on the he
publication in the official Gazette of a notice to the effect the company shall be dissolved:

Provided that the liability, if any, of every director and member of the company shall
continue and may be enforced as if the company had not been dissolved.

(6) If a company or any member or creditor thereof feels aggrieved by the company having
been struck off the register, the Court on the application of the company or member or
creditor, may if satisfied that the company was at the time of the striking off carrying on
business or in operation or other wise that it is just that the company be restored, to the
register, and thereupon the company shall be deemed to have continued in existence as its
name had not been struck off; and the Court may by order give such directions and make
such provisions as seem just for placing the company and all other persons in the same
positions as nearly as may be as if the name of the company has not been struck off;

(7) A letter or notice under this section may be addressed to the company at its registered
office, or if no office has been registered, to the care of some director, manger or other officer
of the company or, if there is no director, manger or other officer of the company whose
named and address are known to the registrar such letter or notice may be sent to each of the
persons who subscribed the memorandum, at the address mentioned in the memorandum.

PART VI

REGISTRATION OFFICE AND FEES

347. Registration office--(1) For the purposes of the registration of Companies under this
Act, there shall be central office and original office at such places as the Government think,
fit and company shall be registered except at an office within the territorial jurisdiction in
which by the memorandum, the registered office of the company is declared to be e
established.

(2) The Government may appoint such Registrar, Additional Registrar, and Assistant
Registrar as it thinks necessary for the mregistration of companies under this Act and may
make regulation rule with respect of their duties.

(3) The Salaries of the persons appointed under this section shall be fixed by the Government.
(4) the Government may direct as seal or seals to be prepared for the authentication of
documents required for or connected with the registration companies.

(5) any person may inspect the documents kept by the Registrar on payment of such fees as
may be specified by the Government not exceeding the fees specified in Schedule III for each
inspection; and any person may require of any company or a copy or extract of any other
document or any part of other document,, to be certified by the Registrar on payment for the
certificate certified copy or extract of such fees as the Government may specify not exceeding
the fee specified in the said Schedule.

(6) Whenever any act is by this Act directed to be done to or by the Registrar it shall until the
Government otherwise direct be done to or by the case of the central office the existing
Registrar or in his absence OT or by such person as the Government may for the time being
authoress and in the Joint Registrar or Deputy Registrar or Assistant Registrar as is appointed
as the Chef Officer of that office.

348. Fees.--(1) There shall be paid to the Registrar in repect of the several matters mentioned
in Schedule II the several fees therein specified, or such smaller fees as the Government may
direct.

(2) All fees paid to Registrar in pursuance of this Act shall be accounted for the Government.

349. Enforcing submission of returns and documents to Registrar: - (1) If a company,

having made default in complying with any provision of this Act, which requires it to file
with, deliver or send to the Registrar any return account or other document, or to give notice
to him of any matter fails to make good the default within fourteen days after the service of a
notice on the company requiring it to dos so, the Court may on an application made to the
Court by member or creditor of the company or by Registrar, make an order directing the
company and officer thereof to make good the default within such time as may be specified in
the order.

(2) Any such order may provide that all costs of and incidental to the application shall be
borne by the company or the concerned officer in respect of any such default as aforesaid.

(3) Nothing in this section shall be taken to p[prejudice the operation of any then enactment
imposing penalties on a company or its officers in respect of any such default as aforesaid.,

350. Filling or registration of documents, etc, after the time specified: - Any documents or
return by this Act required or authorized to be file or registered or any fact by this Act
required or authorized to be registered with the Register on payment of fees specified
therefore in Schedule II any without prejudice to any other labilities be filed or registered
after the time if any pacifier in this Act for its filing or registration on payment of late fee
specified in the said Schedule II.
PART VII

APPLICATION OF ACT TO COMPANIES FORMED AND REGISTERED UNDER

FORMER COMPANIES ACT

351. Application of Act to Combines formed under former Companies Act:- In the
application of this Act to existing companies it shall apply in the same manner in the case of
limited company other shares; in the cases of a company limited by guarantee company
limited by hares; in the cases of a company limited by guarantee as if the company had been
formed and registered under this Act as a company limited by grantee; and in the case of a
company other than a limited company as if the company had been and registered under this
Act as an unlimited company;

Provided that--

(a) nothing in Schedule I shall APPLY to a company formed and registered under nay law in
force at any time before commencement of this Act;

(b) reference express or impaled to the date of registration shall be constructed as a reference
to the date at which the comping was registered under any law in force at any time before the
commencement of this Act.

352. Application Act of companies registered but not formed under former Combines
Act:-- This Act shall apply to every company registered but not formed under any law in
force at any time before the commencement of this Act in the same manner as it is herein
after in this Act. declared to apply to Combines registered but not formed under this Act:

Provided that reference, express or impaled, to the date off registration shall be cons rend a a
reference to the date at which the company was registered under the said laws or any of them.

353. Mode of transferring : A Company registered under any law in force at any time
before the commencement of this Act may cause its shares to be transferred in the manner
hitherto to in use or in such other mangier as the company may direct.

PART VIII

COMPANIES AUTHORIZED TO BE REGISTERED

354. companies capable of being registered.--(1) With the exception and subject to the
provisions mentioned and contained in this section, any company formed whether before or
after the commencement of this Act in pursuance of any Act of Parliament other than this Act
or being otherwise duly constituted according to law and consisting of seven or more
members, s many at time register under this Act as an unlimited company or as a company[by
shares or as a company limited by guarantee; and the registration not be invalid by reason that
it has taken place with a view to the company being wound up

Provided that -

(a) a company having the liability of its members limited by Act of Parliament and not being
a joint-stock company as injection 355, defined, shall not register in pursuance of this section;

(b) a company having the liability of its members limited by Act of Parliament shall not
register in pursuance of this section as an unlimited company not register on pursuance of this
section as a company limited by guarantee;

(c) a company that is not a joint-stock company as in section 355 defined shall not register in
pursuance of this section as a company limited by shares;

(d)) a company shall not register in pursuance of this section without the assent of a majority
of such of its members as are present in person or by proxy, on cases where proxies are
allowed by the articles at a general meeting summoned for the purpose;

(e) where a company not having the liability of its members limited by Act of Parliament is
about to register as a limited company, the molarity required to assent as mentioned it clause
(d) shall consist of not less than three-fourths of the members present in person or by proxy at
the meeting;

(f) where a company is about to register as a company limited by guarantee, the assent OT its
being so registered shall a accompanied by a resolution declaring that each member
undertake to contribute to the assets of he company in the event of its being wound up while
he is member, or within one year afterwards, for payment of the debts and liability of the
company contracted of winding up and for the adjustment of the right of the contributors
among themselves such amount as may be required not exceeding a specified amount.

(2) In computing any majority under this section, when a poll is demanded regard shall be
had to the member of votes to which each member is entities according to the articles.

355. Definition of joint stock company.-- (1)For the purposed of this part, so far as it relates
to registration or companies limited by shares, a joint-stock company means--

(a) a company having a permanent paid up or nominal share capital of fixed amount divided
into shares, also fixed amount, or held of and transferable as stock or divided and held partly
in one way and partly in the other; and

(b) formed on the principle or having only for its members as the holders of those shares or
that stock and for no other person.
(2) Such a company, when registered with limited liability under this Act, shall be deemed to
a a company limited by shares.

356. Requirements for registration of joint stock compaines.-- Before the registration in
pursuance of this part of joint stock company, there shall be delivered to the Registrar the
following documents that is to say--

(a) a list showing the names address occupation of all person who on a day named in the list
not being more than six clear days before the day of registration were members of the
company with the addition of the shares or stock held by them respectively di tinsmithing in
the he case where the shares are numbered, each share by its number;

(b) a copy of deed of settlement contract of copartner or other instrument constituent or

regulation the company; and

(c) if the company is intended to be registered as a limited company, a statement specifying

the following particulars, that is to say--

(i)) the nominal share capital of the company and the number of shares into which its
divided or the amount of stock of which it consists;

(ii) the number of shares taken and the amount paid on each share;

(iii) the name of the company with the addition of the word "Limited''" as the last
OED thereof; and

(iv) in the case of a company intended to be registered as a company limited by

guarantee, the resolution declaring the amount of the guarantee.

357. Requirements for registration of companied other than joint-stock companies.--

Before the registration in pursuance of this Part of any company not being a joint-stock
company, there shall be delivered to the Registrar.--

(a) a list showing the names, addressed and occasions of the directors of the company; and

(b) a copy of deed of settlement, contract of copartner or other instrument constituent or

regulating the company; and

(c) in the case of a company intended to be registered as a company limited by guarantee, a

copy of the resolution declaring the amount of the guarantee.

358. Authentication of statement of existing Companies.-- The list of members and

directors and any other particulars relating to the company required to be delivered to the
Registrar shall be duly verified by the declaration of any two or more directors or other
principal officers of the company.

359. Registrar may require evidence as to nature of company.-- The registrar may require
such evidence as he thinks necessary for the purpose of satisfying himself whether any
company proposing to be registered is or is not a joint stock company as defined in section
355.

360 On registration of banking company with limited liability, notice to be given to

customer.-(1) Where a banking company, which was in existence on the commencement of
this Act, proposes to register as a limited company, it shall at least thirty days before so
registering give notice of its intention so to register OT every person who has a banking
account with the company be delivery of the notice to him by posting at or his last know
address.

(2) If the company omits to give the notice required by this section, then as between the
company and the person for the time being interested in the account in respect of which the
notice ought to have been given and so far as respect the account down to the time at which
notice is given but not further or otherwise the certificate of registration with limited liability
shall have not operation.

361. Exemption of certain Combines from payment of Fees.-- No fees shall be charged in
respect of the registration in pursuance of this part of a company if it is not registered as a
limited company, or if before its registration as a limited company the liability of the
shareholders was limited by some Act of Parliament.

362. Addition of "Limited" to name .-- When a company registration in pursuance of this
part with limited liability the word "Limited shall form and be registered as part of its name.

363. Certificate of registration of existing companies.-- On compliance with the

requirements of this Part with respect to registration and on payment of such fees, if any as
are payable under Schedule II, the Regisra+++ hall certificate under his land that the
company applying for registration ++ in++orporated as a company under this Act and in the
he a e of a limited company that it is limited, and thereupon the company shall be
incorporated and shall have perpetual succession and a common seal.

364. Vesting of property on registration.-- All property movable and immovable ,

including all interest and rights into and out of property, mobile and immovable and
including obligations and actionable claims as may belong to or be vested in a company at the
date of its registration the company as incorporated under this Act for all the estate and
interest of the company therein.
365. Saving of existing liabilities.-- Registration of a company in pursuance of this Part shall
not affect the rights or liabilities of the company in whatever manner such right on liability
accrued or arose.

366. Continuation of suits.-- All suits and other legal proceedings which at the time of the
registration of a company, in pursuance of this part are pending by or against the company or
an officer or member thereof may be continued in the same manner as if the registration had
not taken place nevertheless execution shall not issue against the effects of any individual
member of the company on any decree or order obtained in any such suit or proceeding but in
the event of the property and effects of the company being insufficient to satisfy the decree or
order, and order may be obtained for winding up the company.

367 Effect of registration under this Act:-- When a company is registered in pursuance of
this Part-

(a) all provision continued in any Act of Parliament deed of settlement contract of copartner
or other instrument constituting or regulating the company or, in the case of a company
registered as a company limited by guarantee, the resolution declaring the amount of the
guarantee, shall be deemed to be conditions and regulations of the company in the same
manner and with the same incidence; as it--

(i) so much thereof as would if the comma had been formed under this Act, have been
required to be inserted in the memorandum, were consigned in a registered
memorandum; and

(ii) the residue there of were continued in a registered article;

(b) all the provisions of this Act shall apply to the company and the members, contributors
and creditors there of in the he same manner in all respects as of it had been formed under
this Act subject as follows , that is to say--

(i) the regulation in Schedule I shall not apply, unless adopted by the special
resolution:

(ii) the provisions of this Act relating to the numbering of shares shall not apply to
any joint stock company whose shares are not numbered:

(iii) subject to the Provisions of this section the company shall not have power to alter
any provision contained in any Act of Parliament relating to the company;

(IV) in the invent of the company being wound up every person shall e a contributory,
in respect of the debts and liability of the company contract before regretting who is
liable to pay or contiguity to the payment of any such debt or liability or to pay or
contiguity to the payment of any sum or the adjustment of the rights of the number
 among themselves in respect of any such debt or liability; or to pay or themselves in
to the pay payment of the coat and expenses of winding upon the company so far as
relates to such debts or liability as aforesaid of the company, in the course of the
winding up all sum-due form hi in respect of any such liability as aforesaid; and in the
event of the death or insolvency of the contributor; the provisions of this Act with
respect of the legal representative and heirs of decreased contributors, , and with
reference to the assignees of insolvent contradictories, shall apply;

(c) the provisions of this Act with respect to--

(i) the registration of an unlimited company as limited;

(ii) the powers of an unlimited company on registration as a limited company to

increase the nominal amount of its shares capital[ital and to provide that a portion of
this share capital and to provided that a prosing of OT shares capital shall not be
capable of being called up except in the event of winding up;

(iii) the power of a limited company to determine that a prosing of its share capital
shall not be capable of being called up except in the event of winding up;
shall apply withnotsanding any provisions contained in any Act or Parliament , deed of
settlement, contract of copartner or other instrument constitution or regulating the company.,

(d) nothing in this section shall authoress the company to alter any such provisions continued
in any Act or Parliament, deed of settlement contract of copartner or other instrument
constitution or regulating the company, as would., if the company had originally been formed
under this Act have been required to be continued in the memorandum and are not autopsied
to be altered by this Act.

(e) nothing in this Act shall derogate from any lawful power of altering its continuation or
regulating the company which may by virtue of any Act of Parliament, deed of settlement
contract of copartner or other instrument constituting or regulating the company, be bested in
the company.

368. Power to substitute memorandum and articles for deed of settlement.--(1) Subject
OT the provisions of this section, as company registered in pursuance of this part many by
special resolution, alter the form of its connotation by substituting a memorandum and article
for a deed of settled;

(2) the provision of this Act with respect OT confirmation by the Court and registration of an
alteration under this section with the following modifications, namely;--

(a) there shall be subsisted for the printed copy of the lathered memorandum required
to be filed with Registrar a printed copy of the subsisted memorandum and articles;
and
 (b) on the respiration of the laceration being certified by the Registrar, the subsisted
memorandum and article shall apply to the company in the same manner as if it were
a company registered under this Act with that memorandum and those articles, and
the company' deed of settlement shall cease to apply to the company.

(3) An alteration under this section may be made either with or without any alteration of the
objects of the company under this Act.

(4) In this section, the expression "deed of settlement" includes any contract of copartner or
other instrument constituting or regulating the company not being an Act of Parliament.

369. Power of Court OT stay or restrain proceedings.-- The provisions of this Act with
respect OT to and restraining skittish and legal proceedings against a company at any time
after the presentation of a petition for winding up and before the making of a winding up
order shall, in the case of a company registered in pursuance of this Part, were the application
to say or restrain is by creditor, extend to skittish and legal proceedings against any
contributory of the company.

370 suits stayed on winding up order-- when an order has been made for winding up a
company registered in pursuance of this Part, no suit or other legal proceeding shall be
commenced or proceeded with against the company or any contributor of the company in
respect of any debt of the company, except by leave of the Court and subject to such terms ad
the court may impose.

PART IX

WINDING UP OF UNREGISTERED COMBINES

371. Meaning of "unregarded company" -- For the purposes of this Part, the expression"
unregistered company shall not include a company registered under this Act or under any
company law in force at any time company consisting of more than seven members and not
registered under this Act or the said company with the following exceptions and additions,
namely:--

(a) no unregistered company shall be wound up under this Act voluntarily or subject to
supervision of the Court;
(b) the circumstance in which an unregistered company may be wound up are as follows
namely;--

(i) if the company is dissolved or has ceased to carry on business or is carrying on

business only for the purpose of winding up its affairs;

(ii) if the company is unable to pay its debts;

(iii) if the Court is of option that is just and equitable that the company should be
wound up.

(c) an unregarded company shall for the purposes of this section deemed to be unable to pay
its debts.

(i) if a creditor, by assignment or otherwise to who the company is indebted in a sum

exceeding five hundred taka then due has served on the company, by leaving at its
principal place of business, or by delivering to the secretary, or some directly, serving
in such manner as the Court may approve or direct a demand under his hand
REQUIRING the company tot he pay service of the demand neglected to pay the sum
or to secure or compound for it to the satisfaction of the creator; or

(ii) if any suit or other legal proceeding has been instituted against any member or any
debt or demand due or claimed to be due from the comma or from him in his
character of member, and notice in writing of the institution of the suit or other legal
proceeding having been served on the company by leaving the same at its p[principle
place of business or by delivering it to the secretary, or some director, `manager or
principal office of the company or by otherwise serving the same in such manner as
the Court may approve or direct, the company has not within ten days after service of
the notice paid, secured or compounded for the debt or demand, procured an order for
the suit or other legal proceeding to be stayed, or indemnified the said member or
defendant to this reasonable satisfaction against the suitor defendant to his reasonable
against all costs, damages and expense to be in incurred by him by reason of the
same; or

(iii) if execution or other process issued on a decree or order obtained in any Court in
favour of a creditor against the company, or any member thereof as such, or any
person authorized to be used as nominal defendant on behalf of the company , is
returned unsatisfied; or

(iv) if it is otherwise proved to the satisfaction of the Court that the company is unable
to pay its debts.

(2) Nothing in this Part shall affect the operation of any enactment which provides for any
partnership, association or company being wound up or being wound up as a company or as
unregistered company , under any enactment repealed by this Act, except that reference in
any such any enactment repealed enactment shall be read as reference to the corresponding
provision, if nay, of this Act.

(3) Where a company incorporate outside Bangladesh which has been carrying on business in
Bangladesh, it may be wound up as an unregisor otherwise ceased to exist as a company
under or by vulture of the laws of the country under which it was
incorporated.

373. Contributors in winding up of unregistered Companies.--(1) In the event of an

unregistered comma being wound up, every person shall be deemed to a contributory who is
liable to pay or contribute to the payment of any debt or liability of the company, or to pay or
contribute to the payment of any sum for the adjustment of the rights of the members among
themselves, or to pay or contribute to the payment of the costs and expenses of eyeing up the
company, and every contributory shall be to contribute to the assets of the company all sums
due from him imp respect of any such liability as aforesaid.

(2) In the event of any contributory dying or being adjudged insolvent contributors.

374. Power to stay or restrain proceedings.-- The provisions of this Act with respect to
staying and restraining suits and legal proceedings against a company at any time after the
presentation of a petition for winding up and before the making of a winding up order shall,
in the case of an unregistered company, where the application OT stay or restrains is by a
creditor, extend to skittish and legal proceedings against any contributory of the company.

375. Restrictions on commencing etc.-- of suit after winding up order.--Where an order has
been made for winding up of a company under this Part, no suit or other legal proceedings
shall bee proceeded with or commenced against except by leave of the Court , and subject OT
such terms as the Court may impose.

376. Courts directions as to property in certain cases.-- If an unregistered company has no

power to sue and be sued in a common name, or if for any reason it appears expedient the
Court may by the winding in order, or by any subsequent order, direct that all or any part of
the property, movable and immovable, and including obligations and actionable claims as
may belong to the company or OT trestles on its befall is to vest in the official liquidator by
his official named and thereupon the property or the part thereof specified in the order shall
best accordingly, and the official liquidator may, after giving such indemnity , if any, as the
Court may direct, bring or defend in his official name any suit or other legal proceeding
relating tot that property, or necessary to be brought or defended for purposes of effectually
winding up the company and recovering its property.

377. Provisions of this part cumulative.-- The provisions of this Part with respect to
unregistered companies shall be addition to, and not in restriction of, any provision herein
before in this Act contained with respect OT winding upcompnaies by the Court and the
Court official liquidator may exercise any powers or do any act in the case of unregistered
Combines which might be exercised or done by t or him in the winding up of Combines
formed and registered under this Act; but an unregistered company shall not except in the
event of its being wound up, be deemed OT be a company under this Act, and then only to
the extent provided by this Part.

PART X

FOREIGN COMBINES' REGISTRATION, ETC.

378. application of sections 376 to 387 to foreign companies.--Sections 379 to 387 shall
apply to all foreign Combines, that is to say, campiness falling under the following two
classes, namely:--

(a) Combines incorporated outside Bangladesh which, after commencement of this Act
establish a place of business within Bangladesh; and

(b) combines incorporate outside Bangladesh which have before the commencement of this
Act, established a place of business within Bangladesh and continued to have an established
place of business with Bangladesh, at the commencement of this Act.

379. Documents, etc. to be delivered to Registrar by foreign Combines carrying on

business in Bangladesh--(1) Foreign Combines, which after the commencement of this Act,
establish a place of business with Bangladesh shall, within one month of the establishment of
the place of business,, deliver to the Registrar for registration--

(a) a certified copy of the charter or statues or memorandum and articles of the company or
other instrument constitution or defining the constitution of the company; and if the
instrument is not written in Beguile or English Language, a certified Penally or English
translation thereof;

(b) the full address of the registered or principal office of the company;

(c) a list of the directors and secretary, if any, of the company;

(d) the name and address or the names and addresses of one or more persons resident in
Bangladesh, authorized to accept on behalf of the company service of p[process and any
notice or other document required to be served on the company;

(e) the full address of the office of the company in Ballades which to be deemed its principal
place of business in Bangladesh.
(2) foreign Combines other than those mentioned in sub-section(1), shall if they have not
delivered to the Registrar before the commencement of this Act the Documents and
particulars specified in the sub-section (1) and section continue to be subject to the obligation
to deliver those documents and particulars in accordance with this Act.

(3) If any alteration is made or coccus in--

(a) the charter, studies , or memorandum and articles of foraging company or other
instrument constituting or defining the constitution of a foreign company, or

(b) the registered or principal office of a foreign company or

(d) the names and addresses of the persons authorized to accept service on behalf of a foreign
company, or

(e) the principal place of business of a foreign company in Bangladesh, the Company sh ,
within the prescribed time, file with the Registrar a return containing the prescribed
particulars of the alteration.

380 Accounts of foreign company.--(1) Every foreign company shall, in every calendar
year.--

(a) make out a balance sheet and profit and loss account or in the case of a company not
trading for profit, and income and expenditure account it the company is handling company,
group accounts in such form and consigning such particulars and including such documents,
and under the provision of this Act it would, if it had been accompany within the meaning of
this Act, have been required to make out and lay before the company in general meeting; and

(b) deliver three copies of those documents to the Registrar:

Provided that the Government may by notification in the official Gazette direct that in the he
case of a foraging company or class of foreign Combines the requirements of clause (a)) shall
not apply, or shall apply subject to such exceptions and modification as many be specified in
the notification.

(2) If any such document as is mentioned in sub-section (1) is not written in Penal or English
language, there shall be annexed to it a certified translating thereof.

(a) in veery prospectus inviting subscription in Bangladesh for its shares or debentures, state
the country in which the company is incinerated;

(b) conspicuously exhibit on the outside of every office or place where it carries on business
in Bangladesh, the name of the company and the country in which it is incinerated, in the
letters easily legible in Beguile or English character,
(c) cause the name of the company and of the country in which the company is incur
outdated, to be stated in legible Penally or English characters in all bill heads and letter paper,
and in all notices and other official publications of the company; and.

(d) if the liability of the members of the company is limited, cause a notice of that fact--

(i) to be stated in every Suva prospectus as aforesaid and in all bill heads, letter paper,
notices, advertisements and other official publications of the company, in legible
Penholders, in legible Penally or English characters.

382. Service on foreign company.-- Any process notice, or other document required OT be
served on a foreign company shall be deemed to be sufficiently served, if addressed to any
person mentioned in section 37991) (d) and left at, or sent by post to the address which has
ben so delivered under that section to the Registration.

Provided that--

(a) where any such company make default in delivering to the Registrar in pursuance of that
section the name and address of a person, or

(b) if at any time all the persons whose names and address have been delivered to the
Registrar are dead, or ceased or have ceased so to reside at those addresses, or refused to
accept on behalf of the company any process, notice or other document, or, those cannot be
served or sent for any other reason, such document may be served on the company by leaving
it at, or sending it by post to, any place of business established by the company in
Bangladesh.

383. Notice of ceasing place of business of a company.-- If any foreign company ceases to
have a place of business in Bangladesh, it shall forthwith give notice of the fact to the
Registrar, and as from the date on which notice is so given, the obligation of the company to
deliver any document to the Registrar shall cease, provided it has no other place of business
in Bangladesh.

384. Penalties.-- If any foreign company fails to comply with any of the foregoing provisions
of this Part, the company shall be punishable with fine which may extend to one thousand
taka, or, in the case of a continuing offence, with an additional fine of five hundred taka for
every day after the first day during which the default continues; and every officer or agent of
the company who is knowingly willfully, makes such default, shall be punishable with the
same fine.

385. Company's failure to comply with this Part not to affect its liability under
contracts.-- Any failure by a foreign company to comply with any of the foregoing
provisions of this Part shall not affect the validity of any contract dealing or transaction
entered into by the company or its liability to be sued in respect thereof; but the company
shall not be entitled to bring any suit, claim any set off, make any counter claim or institute
any legal proceeding in respect of any such contract, dealing or transaction until it has
complied with the provisions of this Part.

386. Fees for registration of documents under this Part.-- There shall be paid to the
Registrar for registering any document required by the foregoing provisions of this Part such
fees as specified in Schedule II.

387. Interpretation.-- For the purposes of the foregoing provisions of this Part--

(a) the expression "director" includes any person occupying the position of director by
whatever name called.

(b) the expression "prospectus" has the same meaning as when used in relation to a company
incorporated under this Act;

(c) the expression "place of business" includes a share transfer or share registration office;

(d) the expression "secretary" includes any person occupying the position of secretary, by
whatever name called and

(e) the expression "certified" means certified in the prescribed manner to be a true copy or a
correct translation.

388. Restriction on sale and offer for sale of shares.--(1) It shall not be lawful for any
person--

(a) to issue, circulate or distribute in Bangladesh any prospectus offering to the public for
subscription to shares in or debentures of a company incorporated or to be incorporated
outside Bangladesh whether the company has or has not established, or when formed will or
will not establish, a place of business in Bangladesh, unless--

(i) before the issue, circulation or distribution of the prospectus in Bangladesh a copy
thereof, certified by the chairman and two other directors of the company as having
been approved by resolution of the managing body, has been delivered for registration
to the Registrar;

(ii) the prospectus state on the face of it that the copy has been so delivered;

(iii) the prospectus is dated; and

(iv) the prospectus other wise complies with this Part; or

(b) to tissue to any person in Bangladesh a form of application for shares in or debentures of
such a company of intended company as aforesaid unless the form is issued with a prospectus
which complies the requirements of this Part :

Provided that this clause shall not apply if it is shown that the form of application was issued
in connection with a bonafide invitation to a person to enter into an underwriting agreement
with respect to the shares of debentures.

(2) This section shall 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 debentures will not have the right to renounce in
favour of other persons, but, subject as aforesaid, this section shall apply to a prospectus or
form of application whether issued or with reference to the formation of a company or
subsequently.

(3) Where any document by which any shares in or debentures of a company incorporated
outside Bangladesh are offered for sale to the public would, if the company concerned had
been a company within the meaning of this Act, have been deemed by virtue of section 142 to
be a prospectus issued by the company, that document shall be deemed to be, for the purposes
of this section, a prospectus issued by the company.

(4) An offer of share or debentures for subscription or sale to any person whose ordinary
business or part of whose ordinary business is to by or sell shares or debentures, whether as
principal or agent, shall not be deemed an offer to the public for the purposes of this section.

(5) A person who is knowingly responsible for the issue, circulation or distribution of any
prospectus, or for the issue of a form of application for shares or debentures, in contravention
of the provisions of this section shall be liable to a fine not exceeding ten thousand taka.

(6) In this section and in section 389, the expression "prospectus" "shares" and "debentures"
have the same meaning as and when used in relation to a company incorporated under this
Act.

389. Requirements as to prospectus.-- In order to comply with this Part a prospectus, in

addition to complying with the provisions of sub-clauses (ii) and (iii) of clause(a) of sub-
section (1) of section 388, must--

(a) Contain particulars with respect to the following matters, namely--

(i) the objects of the company;

(ii) the instrument constituting or defining the constitution of the company;

 (iii) the enactments, or provisions having the force of an enactment, by or under
which the incorporation of the company was effected;

(iv) an address in Bangladesh where the said instrument, enactments or provisions, or

copies thereof, and if the same are in a foreign language other than English a
translation thereof in the Bengali or English certified in the prescribe manner can be
inspected;

(v) the date on which and the country in which the company was incorporated.

(vi) whether the company has established a place of business in Bangladesh:

Provided that the provisions of sub-clause (i), (ii), and (iii) of this clause shall not apply in the
case of a prospectus issued more than two years after the date at which the company is
entitled to commence business;

(b) subject to the provisions of this section, state the matters specified in sub-section (1) of
section 135 and set out the reports specified in that section :

Provided that--

(i) where any prospectus is published as a newspaper advertisement, it shall be a

sufficient compliance with the requirements that the prospectus must specify the
objects of the company if the advertisement specified the primary objects with which
the company was formed; and

(ii) in section 135 of this Act, a reference to the article of the company shall be
deemed, to be a reference to the constitution of the company.

(2) Any condition requiring or binding any applicant for shares or debenture shall be void, if
the acceptance thereof has the effect of--

(a) waiving compliance with any requirements of this section; or

(b) serving him with notice of any contract, document or matter not specifically referred to in
the prospectus.

(3) In the event of non-compliance with or contravention of any of the requirements, of this
section, a director or other person responsible for the prospectus shall not incur any liability
by reason of the non-compliance or contravention, if--

(a) as regards any matter not disclosed, he proves that he was not cognizant thereof; or
(b) he proves that the non-compliance or contravention arose from an honest mistake of fact
on his part; or

(c) the non-compliance or contravention was in respect of matter which, in the option of the
court dealing with the case, were immaterial or were otherwise such as ought, in the option of
that Court, having regard to all the circumstances of the case, reasonably to be excused.

Provided that in the event of failure to include in a prospectus a statement with respect to the
matters specified in clause 18 of the Part-I of Schedule-III or in pursuance of sub-section (1)
of section 135, no director or other person shall insure any liability in respect of the failure
unless it be proved that he had knowledge of the matters not disclosed.

(4) Nothing in this section limit or diminish any liability which any person may incur under
the general law or this Act, apart from this section.

390. Restriction on canvassing for sale of shares.--(1) It shall be an oftence of any person
goes from house to house of the public or any member of public offering shares of a company
incorporated outside Bangladesh for subscription to or sale of such shares.

(2) In this sub-section the expression `house" shall not include an office used for business
purposes.

(3) Any person acting in contraventions of this section shall be liable to a fine not exceeding
five hundred taka.

391. Provisions regarding charges.-- The provisions of section 159 to 168- both inclusive,
and 171 to 176, both inclusive, shall extend to charge on properties in Bangladesh which are
created and to charges on property in Bangladesh which us acquired, by a company
incorporated outside Bangladesh which has an established place of business in Bangladesh :

Provided that, were a charge is created outside Bangladesh or the completion of the equisition
of property takes place outside Bangladesh, sub-clause (i) of the proviso to sub-section (1) of
section 159 and the proviso to sub-section (1) of section 160 shall apply as if the property
wherever situated were situated tside Bangladesh.

392. Notice of appointment of receiver etc.--(1) The provisions of section 169 and 170 share
apply to the case of all companies incorporated outside Bangladesh but having an established
place of business in Bangladesh.

(2) The provisions of section 181 shall apply to such companies to the extent of requiring
them to keep at their principal place of business in Bangladesh the books of account required
by that section with respect to money received and expended, sales and purchases made, and
assets and liabilities in relation to its business in Bangladesh.
PART XI

SUPPLEMENTAL

Legal proceedings, offence, etc.

393. Cognizance of offence.--(1) No Court inferior to that of a Magistrate of the first class
shall try any offence under this Act.

(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (V of

1898),--

(a) every offence under this Act shall, for the purpose of the said Code, be deemed to
be non-cognizable.

(b) where the complainant is the Registrar, the personal attendance of the complainant
before the Court trying the offence shall not be necessary unless the Court, for reasons
to be recorded in writing, requires his personal attendance for the purpose of taking
cognizance or holding trial.

394. Application of fines.-- The court imposing any fine under this Act may direct that the
whole or any part thereof be applied in or towards payment of the cost of the proceedings, or
in or towards the rewarding of the person on whose
information the fine is recovered.

395. Power to require limited company to give security for costs.-- Where a limited
company is plaintiff or petitioner in any suit or other legal proceeding, any Court having
jurisdiction in the matter may, if it appears that there is reason to believe that the company
will be unable to pay the cost of the defendant if successful in his defense, require sufficient
security to be given for those costs, and may stay all proceedings until the security is given.

396. Power of Court to grant relief in certain cases.--(1) If in any proceeding for
negligence, default, breach of duty or breach of trust against a person specified in sub-section
(3, it appears to the Court hearing the case that persons is or may be liable in respect of the
negligence, default, breach of duty or breach of trust, but that he has acted honestly and
reasonably, and that having regard to all the circumstances of the case, including those
connected with his appointment, he ought fairly to be excused for the negligence, default,
breach of duty or breach of trust, that Court may relieve him, either wholly or partly, from his
lability on such terms as the Court may think fit.

(2) Where any person specified in sub-section (3) has reason to apprehend that any claim will
o might be made against him in respect of any negligence, default, breach of duty or breach
of trust, he may apply to the Court for relief, and the Court on any such application shall have
the same power to relieve him under this sub-section of it would have under sub-section (1).
(3) The persons to whom this section applies are the following:-

(a) directors of a company;

(b) managers and managing agents of a company;

(c) officers of a company;

(d) persons employed by a company as auditors, whether they are or are not officers
of the company.

397. Penalty for false statement.-- Whoever in any return, report, certificate balance-sheet
or other documents, required by or for the purposes of any of the provisions of this Act,
willfully makes a statement false in any material particular, knowing it to be false, shall be
punishable with imprisonment of either description for a term which may extend to five
years, and shall also be liable tofine.

398. Penalty for wrongful with holding of property.-- Any director, managing agenst,
manager or other officer or employee of a company who wrongfully obtains possession of
any property of a company, or having any such property in his possession wrongfully
withholds it or wilfully applies it to purposes other than those expressed or directed in the
articles and authorised by this Act, shall on the complaint of the company or a creditor or
contributory there-of, be punishable with fine not exceeding five thousand taka, and may be
orderd by the Court trying the offence to deliver of or refund within a time to
be fixed by the Court any such property improperly obtained or wrongfully with- held or wilf
lly misapplied, or in default to suffer imprisonment for a period not exceeding two years.

399. Penalty for misapplication of securities by employers.--(1) All moneys of securities

deposited with a company by its employees in pursuance of their contracts of service, with
the company shall be kept or deposited by the company in a special account to be opened by
the company for this purpose in a scheduled bank as defined in the Bangladesh Bank Order,
1972 (P.O.No. 127 of 1972) and no portion thereof shall be utilised by the company except
for the purposes agreed to in then contract of service.
(2) Where a provident fund has been constituted by a company for its employees or any class
of its employees, all moneys contributed to such fund whether by the company or, by the
employees or acruing by way interest or otherwise to such fund shall be either deposited n a
Post Office Saving Bank account or invested in securities mentioned or referred to in clauses
(a) to (e) of section 20 of the Trusts Act, 1882 (II of 1882) : and all moneys belonging to such
fund which are so deposited or invested shall be so deposited or invested in such securities by
annual instalments not exceeding ten in number and not less in amount in any year than one
tenth of the whole amount of such moneys.
Provided that where the said one-tenth part of the whole amount of the moneys belonging to
such fund exceeds the maximum amount which may be deposited in a Post Office Savings
Bank account under the rules regulating such deposits for the time being in force, the excess
amount may be kept or deposited in a special account to be opened for the purpose in such
scheduled bank.
(3) Notwithstanding anything to the contrary in the rules of any fund to which sub-section (2)
applies or in any contract between a company and its employees, no employee shall be
entitled to receive in respect of such portion of the amount to his credit in such fund as is
invested in accordance with the provisions of sub-section (2) interest at a rate exceeding the
rate of interest yielded by such investment.
(4) An employee shall be entitled on request made in this behalf to the company to see the
bank receipt for any money on security such as is referred to in sub-sections (1) and (2).
(5) Any director, managing agent, managing or other officer of the company who knowingly
contravention or permits or authorises the contravention of the provisions of this section shall
be liable on conviction to a fine not exceeding five hundred taka.

(6) Nothing in sub-section (2) shall affect any right of any employee under the rules of a
provident fund to obtain advance from or to withdraw money standing to his credit in the
fund where the fund is a recognised provident fund within the meaning of clause (52) of
section 2 of the Income Tax Ordinance, 1984 (XXXVI of 1984), or the rules of the fund
containing provisions corresponding to rules 4,5,6,7,8 and 9 and 9 of the Income Tax
(Provident fund Rule, 1984) or similar provisions of a similar Rules.

400. Penalty for improper use of the word "Limited" If any person of persons trade or
carry on business under any name of title of which "Limited" is the last word, that person or
those persons shall be liable to a fine not exceeding five hundred taka everyday upon which
that name or title has been used.

401. Construction of "Registrar of Joint Stock Companies" in Act XXI of 1860.-- In

sections I and 18 of the Societies Registration Act, 1860 (XXI of 1860), for the registration of
Literacy, Scientific and Charitable Societies, the words "Registrar of Joint Stock Companies"
shall be construed to mean the Registrar under this Act.

402. Repeal and savings.--(1) The Companies Act 1913 (VII of 1913,) hereinafter referred
to as the said Act, is hereby repealed.

(2) Notwithstanding the repeal of the said Act--

(a) any order, rule, regulation, appointment, mortgage on other transfer deed,
document or agreement made, fee directed, resolution passed, direction given,
proceeding taken, instrument executed or issued, or thing done under or in pursuance
of the said Act shall, if in force at the commencement of this Act, comtinue to be in
 force and shall have effect as if made, directed, passed, given, taken, exceuted, issued
or done under or in pursuance of this Act;

(b) any person appointed to any office under or by virtue of the said Act shall be
deemed to have been appointed to that office under or by virtue of this Act;

(c) the offices existing at the commencement of this Act for the registration of
companies shall be continued as if they had been established under this Act;

(d) any register or other kept or made under the provisions of the said Act shall be
deemed to be part of the register of other document to be kept or made under the
corresponding provisions of this Act;

(e) all funds constituted and accounts kept under this said Act shall be deemed to be in
continuation of the funds constituted and accounts kept under the corresponding
provisions of this Act.

(3) Nothing in this Act shall affect the incorporation of any company registered under the
said Act or the operation of the provisions of the Insurance Act 1938 (IV of 1938).

403. Section 6 of the General Clauses Act, 1897 to apply.-- The mention of particular
matters in section 402 or in any other provision of this Act shall not prejudice the general
application of section 6 of the General Clauses Act, 1897 (X of 1897).

404. Publication of Authentic English Text.-- After the commencement of this Act, the
Government shall, by notification in the official gazette publish a Text of this Act translated
in English, and this Text shall be called the Authentic English Text of the Act :

Provided that in the event of conflict between the Act (Bangali Text) and he said English
Text. the Act shall prevail.
6.2
THE PARTNERSHIP ACT, 1932
(ACT NO. IX OF 1932)
April, 1932]
1 An Act to define and amend the law relating to partnership.

WHEREAS it is expedient to define and amend the law relating to partnership:

It is hereby enacted as follows:-

CHAPTER I

PRELIMINARY

Short title, extent and commencement

1. (1) This Act may be called the Partnership Act, 1932.

(2) It extends to the whole of Bangladesh.

(3) It shall come into force on the 1st day of October, 1932, except section 69, which shall
come into force on the 1st day of October, 1933.

Definitions

2. In this Act, unless there is anything repugnant in the subject or context,-

(a) an "act of a firm" means any act or omission by all the partners, or by any partner
or agent of the firm which gives rise to a right enforceable by or against the firm;

(b) "business" includes every trade, occupation and profession;

(c) "prescribed" means prescribed by rules made under this Act;

(d) "third party" used in relation to a firm or to a partner therein means any person
who is not a partner in the firm; and

(e) expressions used but not defined in this Act and defined in the Contract Act, 1872,
shall have the meanings assigned to them in that Act.

Application of provisions of Act IX of 1872

3. The unrepealed provisions of the Contract Act, 1872, save in so far as they are inconsistent
with the express provisions of this Act, shall continue to apply to firms.

CHAPTER II

THE NATURE OF PARTNERSHIP

Definition of "partnership", "partner", "firm" and "firm name"

4. "Partnership" is the relation between persons who have agreed to share the profits of a
business carried on by all or any of them acting for all.

Persons who have entered into partnership with one another are called individually "partners"
and collectively "a firm", and the name under which their business is carried on is called the
"firm name".

Partnership not created by status

5. The relation of partnership arises from contract and not from status;

and, in particular, the members of a Hindu undivided family carrying on a family business as
such, or a Burmese Buddhist husband and wife carrying on business as such are not partners
in such business.

Mode of determining existence of partnership

6. In determining whether a group of persons is or is not a firm, or whether a person is or is

not a partner in a firm, regard shall be had to the real relation between the parties, as shown
by all relevant facts taken together.

Explanation 1.The sharing of profits or of gross returns arising from property by persons
holding a joint or common interest in that property does not of itself make such persons
partners.

Explanation 2.The receipt by a person of a share of the profits of a business, or of a payment

contingent upon the earning of profits or varying with the profits earned by a business, does
not of itself make him a partner with the persons carrying on the business;

and, in particular, the receipt of such share or payment-

(a) by a lender of none to persons engaged or about to engage in any business,

(b) by a servant or agent as remuneration,

(c) by the widow or child of a deceased partner, as annuity, or

(d) by a previous owner or part owner of the business, as consideration for the sale of
the goodwill or share thereof,

does not or itself make the receiver a partner with the persons carrying on the business.

Partnership at will

7. Where no provision is made by contact between the partners for the duration of their
partnership, or for the determination of their partnership, the partnership is "partnership at
will".

Particular partnership

8. A person may become a partner with another person in particular adventures or

undertakings.

CHAPTER III

RELATIONS OF PARTNERS TO ONE ANOTHER

General duties of partners

9. Partners are bound to carry on the business of the firm to the greatest common advantage,
to the just and faithful to each other, and to render true accounts and full information of all
things affecting the firm to any partner or his legal representative.

Duty to indemnify for loss caused by fraud

10. Every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct
of the business of the firm.

Determination of rights and duties of partners by contract between the partners

11. (1) Subject to the provisions of this Act, the mutual rights and duties of the partners of a
firm may be determined by contract between the partners, and such contract may be express
or may be implied by a course of dealing.

Such contract may be varied by consent of all the partners, and such consent may be express
or may be implied by a course of dealing.

Agreements in restraint of trade

(2) Notwithstanding anything contained in section 27 of the Contract Act, 1872, such
contracts may provide that a partner shall not carry on any business other than that of the firm
while he is a partner.

The conduct of the business

12. Subject to contract between the partners-

(a) every partner has a right to take part in the conduct of the business;

(b) every partner is bound to attend diligently to his duties in the conduct of the
business;

(c) any difference arising as to ordinary matters connected with the business may be
decided by a majority of the partners, and every partner shall have the right to express
his opinion before the matter is decided, but no change may be made in the nature of
the business without the consent of all the partners; and

(d) every partner has a right to have access to and to inspect and copy any of the
books of the firm.

Mutual rights and liabilities

13. Subject to contract between the partners

(a) a partner is not entitled to receive remuneration for taking part in the conduct of
the business;
 (b) the partners are entitled to share equally in the profits earned, and shall contribute
equally to the losses sustained by the firm;

(c) where a partner is entitled to interest on the capital subscribed by him such interest
shall be payable only out of profits;

(d) a partner making, for the purposes of the business, any payment or advance
beyond the amount of capital he has agreed to subscribe, is entitled to interest thereon
at the rate of six percent, per annum;

(e) the firm shall indemnify a partner in respect of payments made and liabilities
incurred by him-

(i) in the ordinary and proper conduct of the business, and

(ii) in doing such act, in an emergency, for the purpose of protecting the firm
from loss, as would be done by a person of ordinary prudence, in his own case,
under similar circumstances; and

(f) a partner shall indemnify the firm for any loss caused to it by his wilful neglect in
the conduct of the business of the firm.

The property of the firm

14. Subject to contract between the partners, the property of the firm includes all property and
rights and interests in property originally brought into the stock of the firm, or acquired, by
purchase or otherwise, by or for the firm, or for the purposes and in the course of the business
of the firm, and includes also the goodwill of the business.

Unless the contrary intention appears, property and rights and interests in property acquired
with money belonging to the firm are deemed to have been acquired for the firm.

Application of the property of the firm

15. Subject to contract between the partners, the property of the firm shall be held and used
by the partners exclusively for the purposes of the business.

Personal profits earned by partners

16. Subject to contract between the partners,-

(a) if a partner derives any profit for himself from any transaction of the firm, or from the use
of the property or business connection of the firm or the firm name, he shall account for that
profit and pay it to the firm;

(b) if a partner carries on any business of the same nature as and competing with that of the
firm, he shall account for and pay to the firm all profits made by him in that business.
Rights and duties of partners after a change in the firm,

17. Subject to contract between the partners,-

(a) where a change occurs in the constitution of a firm, the mutual rights and duties of the
partners in the reconstituted firm remain the same as they were immediately before the
change, as far as may be;

After the expiry of the term of the firm, and

(b) where a firm constituted for a fixed term continues to carry on business after the expiry of
that term, the mutual rights and duties of the partners remain the same as they were before the
expiry, so far as they may be consistent with the incidents of partnership at will; and

Where additional undertakings are carried out

(c) where a firm constituted to carry out one or more adventures or undertakings carries out
other adventures or undertakings, the mutual rights and duties of the partners in respect of the
other adventure or undertakings are the same as those in respect of the original adventures or
undertakings.

CHAPTER IV

RELATIONS OF PARTNERS TO THIRD PARTIES

Partner to be agent of the firm

18. Subject to the provision of this Act, a partner is the agent of the firm for the purposes of
the business of the firm.

Implied authority of partner as agent of the firm

19. (1) Subject to the provisions of section 22, the act of a partner which is done to carry on,
in the usual way, business of the kind carried by the firm, binds the firm.

The authority of a partner to bind the firm conferred by this section is called his "implied
authority".

(2) In the absence of any usage or custom of trade to the contrary, the implied authority of a
partner does not empower him to-

(a) submit a dispute relating to the business of the firm to arbitration,

(b) open a banking account on behalf of the firm in his own name,

(c) compromise or relinquish any claim or portion of a claim by the firm,

(d) withdraw a suit or proceeding filed on behalf of the firm,

 (e) admit any liability in a suit or proceeding against the firm,

(f) acquire immovable property on behalf of the firm,

(g) transfer immovable property belonging to the firm, or

(h) enter into partnership on behalf of the firm.

Extension and restriction of partner's implied authority

20. The partners in a firm may, by contract between the partners, extend or restrict the
implied authority of any partner.

Notwithstanding any such restriction, any act done by a partner on behalf of the firm which
falls within his implied authority binds the firm, unless the person with whom he is dealing
knows of the restriction or does not know or believe that partner to be a partner.

Partner's authority in an emergency

21. A partner has authority, in an emergency, to do all such acts for the purpose of protecting
the firm from loss as would be done by a person of ordinary prudence, in his own case, acting
under similar circumstances, and such acts bind the firm.

Mode of doing act to bind firm

22. In order to bind a firm, an act or instrument done or executed by a partner or other person
on behalf of the firm shall be done or executed in the firm name, or in any other manner
expressing or implying an intention to bind the firm.

Effect of admissions by a partner

23. An admission or representation made by a partner concerning the affairs of the firm is
evidence against the firm, if it is made in the ordinary course of business.

Effect of notice to acting partner

24. Notice to a partner who habitually acts in the business of the firm of any matter relating to
the affairs of the firm operates as notice to the firm, except in the case of a fraud on the firm
committed by or with the consent of that partner.

Liability of a partner for acts of the firm

25. Every partner is liable, jointly with all the other partners and also severally, for all acts of
the firm done while he is a partner.

Liability of the firm for wrongful acts of a partner

26. Where, by the wrongful act or omission of a partner acting in the ordinary course of the
business of a firm, or with the authority of his partners, loss or injury is caused to any third
party, or any penalty is incurred, the firm is liable therefor to the same extent as
the partner.

Liability of firm for misapplication by partners

27. Where-

(a) a partner acting within his apparent authority receives money or property from a
third party and misapplies it, or

(b) a firm in the course of its business receives money or property from a third party,
and the money or property is misapplied by any of the partners while it is in the
custody of the firm,

the firm is liable to make good the loss.

Holding out

28.(1) Anyone who by words spoken or written or by conduct represents himself, or

knowingly permits himself to be represented, to be a partner in a firm, is liable as a partner in
that firm to anyone who has on the faith of any such representation given credit to the firm,
whether the person representing himself or represented to be a partner does or does not know
that the representation has reached the person so giving credit.

(2) Where after a partner's death the business is continued in the old firm name, the continued
use of that name or of the deceased partner's name as a part thereof shall not of itself make
his legal representative or his estate liable for any act of the firm done after his death.

Rights of transferee of a partner's interest

29. (1) A transfer by a partner of his interest in the firm either absolute or by mortgage, or by
the creation by him of a charge on such interest, does not entitle the transferee, during the
continuance of the firm, to interfere in the conduct of the business, or to require accounts, or
to inspect the books of the firm, but entitles the transferee only to receive the share of profits
of the transferring partner, and the transferee shall accept the account of profits agreed to by
the partners.

(2) If the firm is dissolved or if the transferring partner ceases to be a partner, the transferee is
entitled as against the remaining partners to receive the share of the assets of the firm to
which the transferring partner is entitled, and, for the purpose of ascertaining that share, to an
account as from the date of the dissolution.

Minors admitted to the benefits of partnership

30. (1) A person who is a minor according to the law to which he is subject may not be a
partner in a firm, but, with the consent of all the partners for the time being, he may be
admitted to the benefits of partnership.
(2) Such minor has a right to such share of the property and of the profits of the firm as may
be agreed upon, and he may have access to and inspect and copy any of the accounts of the
firm.

(3) Such minor's share is liable for the acts of the firm, but the minor is not personally liable
for any such act.

(4) Such minor may not sue the partners for an account or payment of his share of the
property or profits of the firm, save when severing his connection with the firm, and in such
case the amount of his share shall be determined by a valuation made as far as possible in
accordance with the rules contained in section 48:

Provided that all the partners acting together or any partners entitled to dissolve the firm upon
notice to other partners may elect in such suit to dissolve the firm, and thereupon the Court
shall proceed with the suit as one for dissolution and for settling accounts between the
partners, and the amount of the share of the minor shall be determined along with the shares
of the partners.

(5) At any time within six months of his attaining majority, or of his obtaining knowledge
that he had been admitted to the benefits of partnership, whichever date is later, such person
may give public notice that he has elected to become or that he has elected not to become a
partner in the firm, and such notice shall determine his position as regards the firm:

Provided that, if he fails to give such notice, he shall become a partner in the firm on the
expiry of the said six months.

(6) Where any person has been admitted as a minor to the benefits of partnership in a firm,
the burden of proving the fact that such person had no knowledge of such admission until a
particular date after the expiry of six months of his attaining majority shall lie on the persons
asserting that fact.

(7) Where such person becomes a partner,-

(a) his rights and liabilities as a minor continue up to the date on which he becomes a
partner, but he also becomes personally liable to third parties for all acts of the firm
done since he was admitted to the benefits of partnership, and

(b) his share in the property and profits of the firm shall be the share to which he was
entitled as a minor.

(8) Where such person elects not to become a partner,-

(a) his rights and liabilities shall continue to be those of a minor under this section up
to the date on which he gives public notice,

(b) his share shall not be liable for any acts of the firm done after the date of the
notice, and

(c) he shall be entitled to sue the partners for his share of the property and profits in
accordance with sub-section (4).
(9) Nothing in sub-sections (7) and (8) shall affect the provisions of section 28.

CHAPTER V

INCOMING AND OUTGOING PARTNERS

Introduction of a partner

31. (1) Subject to contract between the partners and to the provisions of section 30, no person
shall be introduced as a partner into a firm without the consent of all the existing partners.

(2) Subject to the provisions of section 30, a person who is introduced as a partner into a firm
does not thereby become liable for any act of the firm done before he become a partner.

Retirement of a partner

32. (1) A partner may retire-

(a) with the consent of all the other partners,

(b) in accordance with an express agreement by the partners, or

(c) where the partnership is at will, by giving notice in writing to all the other partners
of his intention to retire.

(2) A retiring partner may de discharged from any liability to any third party for acts of the
firm done before his retirement by an agreement made by him with such third party and the
partners of the reconstituted firm, and such agreement may be implied by a course of dealing
between such third party and the reconstituted firm after he had knowledge of the retirement.

(3) Notwithstanding the retirement of a partner from a firm, he and the partners continue to
be liable as partners to third parties for any act done by any of them which would have been
an act of the firm if done before the retirement, until public notice is given of the retirement:

Provided that a retired partner is not liable to any third party who deals with the firm without
knowing that he was a partner.

(4) Notice under sub-section (3) may be given by the retired partner or by any partner of the
reconstituted firm.

Expulsion of a partner

33. (1) A partner may not be expelled from a firm by any majority of the partners, save in the
exercise in good faith of powers conferred by contract between the partners.

(2) The provisions of sub-sections (2), (3) and (4) of section 32 shall apply to an expelled as
if he were retired partner.

Insolvency of a partner
34.(1) Where a partner in a firm is adjudicated an insolvent he ceases to be a partner on the
date on which the order of adjudication is made, whether or not the firm is thereby dissolved.

(2) Where under a contract between the partners the firm is not dissolved by the adjudication
of a partner as an insolvent, the estate of a partner so adjudicated is not liable for any act of
the firm and the firm is not liable for any act of the insolvent, done after the date on which the
order of adjudication is made.

Liability of estate of deceased

35. Where under a contract between the partners the firm is not dissolved by the death of a
partner, the estate of a deceased

partner

partner is not liable for any act of the firm done after his death.

Rights of outgoing partner to carry on competing business

36.(1) An outgoing partner may carry on a business competing with that of the firm and he
may advertise such business, but, subject to contract to the contrary, he may not-

(a) use the firm name,

(b) represent himself as carrying on the business of the firm, or

(c) solicit the custom of persons who were dealing with the firm before he ceased to
be a partner.

Agreements in restraint of trade

(2) A partner may make an agreement with his partners that on ceasing to be a partner he will
not carry on any business similar to that of the firm within a specified period or within
specified local limits; and, notwithstanding anything contained in section 27 of the Contract
Act, 1872, such agreement shall be valid if the restrictions imposed are reasonable.

Right of outgoing partner in certain cases to share subsequent profits

37. Where any member of a firm has died or otherwise ceased to be a partner, and the
surviving or continuing partners carry on the business of the firm with the property of the
firm without any final settlement of accounts as between them and the outgoing partner or his
estate, then, in the absence of a contract to the contrary, the outgoing partner or his estate is
entitled at the option of himself or his representatives to such share of the profits made since
he ceased to be a partner as may be attributable to the use of his share of the property of the
firm or to interest at the rate of six per cent. per annum on the amount of his share in the
property of the firm:

Provided that where by contract between the partners an option is given to surviving or
continuing partners to purchase the interest of a deceased or outgoing partner, and that option
is duly exercised, the estate of the deceased partner or the outgoing partner or his estate as the
case may be, is not entitled to any further or other share of profits; but if any partner
assuming to act in exercise of the option does not in all material respects comply with the
terms thereof, he is liable to account under the foregoing provisions of this section.

Revocation of continuing guarantee by change in firm

38. A continuing guarantee given to a firm, or to a third party in respect of the transactions of
a firm, is, in the absence of agreement to the contrary, revoked as to future transactions from
the date of any change in the constitution of the firm.

CHAPTER VI

DISSOLUTION OF A FIRM

Dissolution of a Firm

39. The dissolution of partnership between all the partners of a firm is called the "dissolution
of the firm".

Dissolution by agreement

40. A firm may be dissolved with the consent of all the partners or in accordance with a
contract between the partners Compulsory dissolution

41. A firm is dissolved-

(a) by the adjudication of all the partners or of all the partners but one as insolvent, or

(b) by the happening of any event which makes it unlawful for the business of the
firm to be carried on or for the partners to carry it on in partnership:

Provided that, where more than one separate adventure or undertaking is carried on by the
firm, the illegality of one or more shall not of itself cause the dissolution of the firm in
respect of its lawful adventures and undertakings.

Dissolution on the happening of certain

Contingencies

42. Subject to contract between the partners a firm is dissolved-

(a) if constituted for a fixed term, by the expiry of that term;

(b) if constituted to carry out one or more adventures or undertakings, by the

completion thereof;

(c) by the death of a partner; and

(d) by the adjudication of a partner as an insolvent.

Dissolution by notice of partnership at will

43.(1) Where the partnership is at will, the firm may be dissolved by any partner giving
notice in writing to all the other partners of his intention to dissolve the firm.

(2) The firm is dissolved as from the date mentioned in the notice as the date of dissolution
or, if no date is so mentioned, as from the date of the communication of the notice.

Dissolution by the Court

44. At the suit of a partner, the Court may dissolve a firm on any of the following grounds,
namely:-

(a) that a partner has become of unsound mind, in which case the suit may be brought
as well by the next friend of the partner who has become of unsound mind as by any
other partner;

(b) that a partner, other than the partner suing, has become in any way permanently
incapable of performing his duties as partner;

(c) that a partner, other than the partner suing, is guilty of conduct which is likely to
affect prejudicially the carrying on of the business, regard being had to the nature of
the business;

(d) that a partner, other than the partner suing, wilfully or persistently commits breach
of agreements relating to the management of the affairs of the firm or the conduct of
its business, or otherwise so conducts himself in matters relating to the business that it
is not reasonably practicable for the other partners to carry on the business in
partnership with him;

(e) that a partner, other than the partner suing, has in any way transferred the whole of
his interest in the firm to a third party, or has allowed his share to be charged under
the provisions of rule 49 of Order XXI of the First Schedule to the Code of Civil
Procedure, 1908, or has allowed it to be sold in the recovery of arrears of land-
revenue or of any dues recoverable as arrears of land-revenue due by the partner;

(f) that the business of the firm cannot be carried on save at a loss; or

(g) on any other ground which renders it just and equitable that the firm should be
dissolved.

Liability for acts of partners done after dissolution

45.(1) Notwithstanding the dissolution of a firm, the partners continue to be liable as such to
third parties for any act done by any of them which would have been an act of the firm if
done before the dissolution, until public notice is given of the dissolution:

Provided that the estate of a partner who dies, or who is adjudicated an insolvent, or of a
partner who, not having been known to the person dealing with the firm to be a partner,
retires from the firm, is not liable under this section for acts done after the date on which he
ceases to be a partner.

(2) Notices under sub-section (1) may be given by any partner.

Right of partners to have business wound up after dissolution

46. On the dissolution of a firm every partner or his representative is entitled, as against all
the other partners or their representatives, to have the property of the firm applied in payment
of the debts and liabilities of the firm, and to have the surplus distributed among the partners
or their representatives

Continuing authority of partners for purposes of winding up

47. After the dissolution of a firm the authority of each partner to bind the firm, and the other
mutual rights and obligations of the partners, continue notwithstanding the dissolution, so far
as may be necessary to wind up the affairs of the firm and to complete transactions begun but
unfinished at the time of the dissolution, but not otherwise:

Provided that the firm is in no case bound by the acts of a partner who has been adjudicated
insolvent; but this proviso does not affect the liability of any person who has after the
adjudication represented himself or knowingly permitted himself to be represented as a
partner of the insolvent.

Mode of settlement of accounts between partners

48. In settling the accounts of a firm after dissolution, the following rules shall, subject to
agreement by the partners, be observed:-

(a) Losses, including deficiencies of capital, shall be paid first out of profits, next out of
capital, and, lastly if necessary, by the partners individually in the proportions in which they
were entitled to sharen profits,

(b) The assets of the firm, including any sums contributed by the partners to make up
deficiencies of capital, shall be applied in the following manner and order:

(i) in paying the debts of the firm to third parties;

(ii) in paying to each partner rateably what is due to him from the firm for advances as
distinguished from capital;

(iii) in paying to each partner rateably what in due to him on account of capital; and

(iv) the residue, if any, shall be divided among the partners in the proportions in
which they were entitled to share profits.

Payment of firm debts and of separate debts

49. Where there are joint debts due from the firm, and also separate debts due from any
partner, the property of the firm shall be applied in the first instance in payment of the debts
of the firm, and, if there is any surplus, then the share of each partner shall be applied in
payment of his separate debts or paid to him. The separate property of any partner shall be
applied first in the payment of his separate debts, and the surplus (if any) in the payment of
the debts of the firm.

Personal profits earned after dissolution

50. Subject to contract between the partners, the provisions of clause (a) of section 16 shall
apply to transactions by any surviving partner or by the representatives of a deceased partner,
undertaken after the firm is dissolved on account of the death of a partner and before its
affairs have been completely wound up:

Provided that where any partner or his representative has bought the goodwill of the firm,
nothing in this section shall affect his right to use the firm name.

Return of

51. Where a partner has plaid a premium on entering into

premium on premature dissolution

partnership for a fixed term, and the firm is dissolved before the expiration of that term
otherwise than by the death of a partner, he shall be entitled to repayment of the premium or
of such part thereof as may be reasonable, regard being had to the terms upon which he
became a partner and to the length of time during which he was a partner, unless-

(a) the dissolution is mainly due to his own misconduct, or

(b) the dissolution is in pursuance of an agreement containing no provision for the return of
the premium or any part of it.

Rights where partnership contract is rescinded for fraud or misrepresentation

52. Where a contract creating partnership is rescinded on the ground of the fraud or
misrepresentation of any of the parties thereto, the party entitled to rescind is, without
prejudice to any other right, entitled-

(a) to a lien on, or a right of retention of, the surplus or the assets of the firm remaining after
the debts of the firm have been paid, for any sum paid by him for the purchase of a share in
the firm and for any capital contributed by him;

(b) to rank as a creditor of the firm in respect of any payment made by him towards the debts
of the firm; and

(c) to be indemnified by the partner or partners guilty of the fraud or misrepresentation

against all the debts of the firm.

Rights to restrain from use of firm name or firm property

53. After a firm is dissolved, every partner or his representative may, in the absence of a
contract between the partners to the contrary, restrain any other partner or his representative
from carrying on a similar business in the firm name or from using any of the property of the
firm for his own benefit, until the affairs of the firm have been completely wound up:

Provided that where any partner or his representative has bought the goodwill of the firm,
nothing in this section shall affect his right to use the firm name.

Agreements in restraint of trade

54. Partners may, upon or in anticipation of the dissolution of the firm, make an agreement
that some or all of them will not carry on a business similar to that of the firm within a
specified period or within specified local limits; and notwithstanding anything contained in
section 27 of the Contract Act, 1872, such agreement shall be valid if the restrictions imposed
are reasonable.

Sale of goodwill after dissolution

55.(1) In settling the accounts of a firm after dissolution the goodwill shall, subject to
contract between the partners be included in the assets, and it may be sold either separately or
along with other property of the firm.

Rights of buyer and seller of goodwill

(2) Where the goodwill of a firm is sold after dissolution, a partner may carry on a business
competing with that of the buyer and he may advertise such business, but, subject to
agreement between him and the buyer, he may not.

(a) use the firm name,

(b) represent himself as carrying on the business of the firm, or

(c) solicit the custom of persons who were dealing with the firm before its dissolution.

Agreements in restraint of trade

(3) Any partner may, upon the sale of the goodwill of a firm, make an agreement with the
buyer that such partner will not carry on any business similar to that of the firm within a
specified period or within specified local limits, and, notwithstanding anything contained
in section 27 of the Contract Act, 1872, such agreement shall be valid if the restrictions
imposed are reasonable.

CHAPTER VII

REGISTRATION OF FIRMS

[Omitted] 56. [Omitted by section 3 and 2nd Schedule of the Bangladesh Laws (Revision
And Declaration) Act, 1973 (Act No. VIII of 1973).]

Appointment of Registrars
57. (1) The Government may appoint Registrars of Firms for the purposes of this Act, and
may define the areas within which they shall exercise their powers and perform their duties.

(2) Every Registrar shall be deemed to be a public servant within the meaning of section 21
of the 2[ Penal Code].

Application for registration

58.(1) The registration of a firm may be effected at any time by sending by post or delivering
to the Registrar of the area in which any place of business of the firm is situated or proposed
to be situated, a statement in the prescribed form and accompanied by the prescribed fee,
stating-

(a) the firm name,

(b) the place or principal place of business of the firm,

(c) the names of any other places where the firm carries on
business,

(d) the date when each partner joined the firm,

(e) the names in full and permanent addresses of the partners, and

(f) the duration of the firm.

The statement shall be signed by all the partners, or by their agents specially authorized in
this behalf.

(2) Each person signing the statement shall also verify it in the manner prescribed.

3[ 4[ (3) A firm name shall not contain any of the following words,
namely:

State or words expressing or implying the sanction, approval or patronage of the Government
or of the Bangabandhu, except when the Government signifies its consent to the use of such
words as part of the firm name by order in writing.]

(3A) A firm name shall not contain the name of the "United Nations" or its abbreviations
through the use of its initial letters or of any subsidiary body set up by that body unless it has
obtained the previous authorization of the Secretary-General of the United Nations in writing.

(3B) A firm name shall not contain the name of the "World Health Organization" or its
abbreviations through the use of its initial letters unless it has obtained the previous
authorization of the Director-General in writing.]

Registration
59. When the Registrar is satisfied that the provisions of section 58 have been duly complied
with, he shall record an entry of the statement in a register called the Register of Firms, and
shall file the statement.

Recording or alterations in firm name and principal place of business

60.(1) When an alteration is made in the firm name or in the location of the principal place of
business of a registered firm, a statement may be sent to the Registrar accompanied by the
prescribed fee, specifying the alteration, and signed and verified in the manner required under
section 58.

(2) When the Registrar is satisfied that the provisions of sub-section (1) have been duly
complied with, he shall amend the entry relating to the firm in the Register of Firms in
accordance with the statement, and shall file it along with the statement relating to the firm
filed under section 59.

Noting of closing and opening of branches

61. When a registered firm discontinues business at any place or begins to carry on business
at any place, such place not being its principal place of business, any partner or agent of the
firm may send intimation thereof to the Registrar, who shall make a note of such intimation
in the entry relating to the firm in the Register of Firms, and shall file the intimation along
with the statement relating to the firm filed under section 59.

Noting of changes in names and addresses of partners

62. When any partner in a registered firm alters his name or permanent address, an intimation
of the alteration may be sent by any partner or agent of the firm to the registrar, who shall
deal with it in the manner provided in section 61.

Recording of changes in and dissolution of a firm

63.(1) When a change occurs in the constitution of a registered firm any incoming, continuing
or outgoing partner, and when a registered firm is dissolved any person who was a partner
immediately before the dissolution, or the agent of any such partner, or person specially
authorized in this behalf, may give notice to the Registrar of such change or dissolution,
specifying the date thereof; and the Registrar shall make a record of the notice in the entry
relating to the firm in the Register of Firms, and shall file the notice along with the statement
relating to the firm filed under section 59.

Recording of withdrawal of a minor

(2) When a minor who has been admitted to the benefits of partnership in a firm attains
majority and elects to become or not to become a partner, and the firm is then a registered
firm, he, or his agent specially authorized in this behalf, may give notice to the Registrar that
he has or has not become a partner, and the Registrar shall deal with the notice in the manner
provided in subsection (1).

Rectification of mistakes
64.(1) The Registrar shall have power at all times to rectify any mistake in order to bring the
entry in the Register of Firms relating to any firm into conformity with the documents
relating to that firm filed under this Chapter.

(2) On application made by all the parties who have signed any document relating to a firm
filed under this Chapter, the Registrar may rectify any mistake in such document or in the
record or note thereof made in the Register of Firms.

Amendment of Register by order of Court

65. A court deciding any matter relating to a registered firm may direct that the Registrar
shall make any amendment in the entry in the Register of Firms relating to such firm which is
consequential upon its decision; and the Registrar shall amend the entry accordingly.

Inspection of Register and filed documents

66.(1) The Register of Firms shall be open to inspection by any person on payment of such
fee as may be prescribed.

(2) All statements, notices and intimations filed under this Chapter shall be open to
inspection, subject to such condition and on payment of such fee as may be prescribed.
Grant of copies

67. The Registrar shall on application furnish to any person, on payment of such fee as may
be prescribed, a copy, certified under his hand, of any entry or portion thereof in the Register
of Firms.

Rules of evidence

68.(1) Any statement, intimation or notice recorded or noted in the Register of Firms shall, as
against any person by whom or on whose behalf such statement, intimation or notice was
signed, be conclusive proof of any fact therein stated.

(2) A certified copy of an entry relating to a firm in the Register of Firms may be produced in
proof of the fact of the registration of such firm, and of the contents of any statement,
intimation or notice recorded or noted therein.

Effect of non-registration

69.(1) No suit to enforce a right arising from a contract or conferred by this Act shall be
instituted in any Court by or on behalf of any person suing as a partner in a firm against the
firm or any person alleged to be or to have been a partner in the firm unless the firm is
registered and the person suing is or has been shown in the Register of Firms as a partner in
the firm.

(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on
behalf of a firm against any third party unless the firm is registered and the persons suing are
or have been shown in the Register of Firms as partners in the firm.
(3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other
proceeding to enforce a right arising from a contract, but shall not effect-

(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of
a dissolved firm, or any right or power to realise the property of a dissolved firm, or

(b) the powers of an official assignee, receiver or Court under the 5[Insolvency
(Dacca) Act, 1909, or the] Insolvency Act, 1920, to realise the property of an
insolvent partner.

(4) This section shall not apply-

(a) to firms or to partners in firms which have no place of business in Bangladesh, or

whose places of business in Bangladesh are situated in areas to which, by notification
under section 56, this Chapter does not apply, or

(b) to any suit or claim of set-off not exceeding one hundred Taka in value which, is
not of a kind specified in the Second Schedule to the 6[ * * *] Small Cause Courts
Act, 1887, or to any proceeding in execution or other proceeding incidental to or
arising from any such suit or claim.

Penalty for furnishing false particulars

70. Any person who signs any statement, amending statement, notice or intimation under this
Chapter containing any particular which he knows to be false or does not believe to be true,
or containing particulars which he knows to be incomplete or does not believe to be
complete, shall be punishable with imprisonment which may extend to three months, or with
fine, or with both.

Power to make rules

71.(1) The Government may make rules prescribing the fees which shall accompany
documents sent to the Register of Firms, or which shall be payable for the inspection of
documents

in the custody of the Register of Firms, or for copies from the Register of Firms:

Provided that such fees shall not exceed the maximum fees specified in Schedule I.

(2) The Government may also make rules-

(a) prescribing the form of statement submitted under section 58, and of the
verification thereof;

(b) requiring statements, intimations and notices under sections 60, 61, 62 and 63 to
be in prescribed form, and prescribing the form thereof;

(c) prescribing the form of the Register of Firms, and the mode in which entries
relating to firms are to be made therein, and the mode in which such entries are to be
amended or notes made therein;
 (d) regulating the procedure of the Registrar when disputes arise;

(e) regulating the filing of documents received by the Registrar;

(f) prescribing conditions for the inspection of original documents;

(g) regulating the grant of copies;

(h) regulating the elimination of registers and documents;

(i) providing for the maintenance and form of an index to the Register of Firms; and

(j) generally, to carry out the purposes of this Chapter.

(3) All rules made under this section shall be subject to the condition of previous publication.

CHAPTER VIII

SUPPLEMENTAL

Mode of giving public notice

72. A public notice under this Act is given-

(a) where it relates to the retirement or expulsion of a partner from a registered firm, or to the
dissolution of a registered firm, or to the election to become or not to become a partner in a
registered firm by a person attaining majority who was admitted as a minor to the benefits of
partnership, by notice to the Register of Firms under section 63, and by publication in the
official Gazette and in at least one vernacular newspaper circulating in the district where the
firm to which it relates has its place or principal place of business, and

(b) in any other case, by publication in the official Gazette and in at least one vernacular
newspaper circulating in the district where the firm to which it relates has its place or
principal place of business.

[Repealed]

73. [Repealed by section 2 and Schedule of the Repealing Act, 1938 (Act No. I of 1938).]

Savings

74. Nothing in this Act or any repeal effected thereby shall affect or be deemed to affect-

(a) any right, title, interest, obligation or liability already acquired, accrued or incurred
before the commencement of this Act, or
 (b) any legal proceeding or remedy in respect of any such right, title, interest,
obligation or liability or anything done or suffered before the commencement of this
Act, or

(c) anything done or suffered before the commencement of this Act, or

(d) any enactment relating to partnership not expressly repealed by this Act, or

(e) any rule of insolvency relating to partnership, or

(f) any rule of law not inconsistent with this Act.

1 Throughout this Act, except otherwise provided, the words `Bangladesh`, `Government`
and `Taka` were substituted, for the words `Pakistan`, `Provincial Government` and `rupees`
or `rupee` respectively by section 3 and 2nd Schedule of the Bangladesh Laws (Revision And
Declaration) Act, 1973 (Act No. VIII of 1973).

2 The words `Penal Code` were substituted, for the words `Pakistan Penal Code` by section 3
and 2nd Schedule of the Bangladesh Laws (Revision And Declaration) Act, 1973 (Act No.
VIII of 1973)

3 Sub-sections (3), (3A) and (3B) were substituted for sub-section (3) by section 2 of the
Partnership (Amendment) Act, 1949 (Act No. V of 1949).

4 Sub-section (3) was substituted, for sub-section (3) by section 3 and 2nd Schedule of the
Bangladesh Laws (Revision And Declaration) Act, 1973 (Act No. VIII of 1973).

5 The words, brackets, commas and figure `Insolvency (Dacca) Act, 1909, or the` were
substituted, for the words, brackets and comma `Insolvency (Karachi Division and Dacca)
Act, or the Provincial` by section 3 and 2nd Schedule of the Bangladesh Laws (Revision And
Declaration) Act, 1973 (Act No. VIII of 1973).

6 The word `Provincial` was omitted by section 3 and 2nd Schedule of the Bangladesh Laws
(Revision And Declaration) Act, 1973 (Act No. VIII of 1973).

Copyright © 2010, Legislative and Parliamentary Affairs Division

Ministry of Law, Justice and Parliamentary Affairs
THE SOCIETIES REGISTRATION ACT, 186
[21st

6.3
THE SOCIETIES REGIXTRATION ACT, 1860

(ACT NO. XXI OF 1860)

An Act for the Registration of Literary, Scientific and Charitable Societies.

Preamble