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;

(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 sub-section (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 sub-section (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.

(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.

(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.

(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.

(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.

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.

(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.

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 ;

(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 mis-statement 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.

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.

(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.

(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.

(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 stamp-duty 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.

(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.

(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.

(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.

(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.

(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.

(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.

(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 aka.

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 sub-section (4).

(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.

(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;

(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;

(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.

(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 authorise 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.

(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 balance-sheet 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

(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.

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.

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

(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

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