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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 sub-section (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--
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 one-third 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--
(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 afte |