Committee formed to amend Company Act, 1994

Express (August 24, 2011)

A national committee has been formed to amend the Company Act 1994 with a view to establishing transparency in the operations of businesses in the country.

Secretary to the Ministry of Commerce (MoC) Muhammed Ghulam Hossain has been made convener of the 17-member national committee. Representatives from both public and private sectors are included in the committee.

Earlier, the Parliamentary (JS) Standing Committee on Ministry of Commerce suggested drastic revision and updating of the Company Act with a view to removing its lacunas that are often exploited by vested quarters to their advantage, a senior official at the MoC said.

The MoC in 2002 and 2010 initiated the process of amending the Company Act, 1994, but failed to complete the process amid differences of opinion among the stakeholders, it is learnt.

"Keeping in mind our failures twice, the new committee has been formed with top representatives of different stakeholders," a trade official said.

"Technical and financial cooperation will be taken from Bangladesh Investment Climate Fund," he added.

The committee has been asked to submit their report latest by October this year.

Other members of the national committee include secretary for the law ministry, chairman, Securities and Exchange Commission, president, FBCCI, president, MCCI, president, Chittagong Chamber of Commerce and Industry, president, Bangladesh Association of Listed Companies, president, Supreme Court Bar Association, president, Institute of Cost and Management Accountants of Bangladesh, president, Women Chamber of Commerce and Industry, chairman, Bangladesh Law Commission, an executive director of Bangladesh Bank, registrar, Joint Stock Companies and Firms and two joint secretaries of MoC.

Officials at the MoC said the age-old Company Act would be revised thoroughly to make it commensurate with the changed global and local economic perspectives. He said the amendment to clauses singled out for receiving top priority are alteration of Memorandum of Articles of Association of a company, power of court when confirming alteration, exercises of discretion by court, procedure on confirmation of the alteration, effects of failure to register within extended time, procedures of holding annual general meeting (AGM), penalty for default in complying with formalities in holding AGM and revision of the rates of different fees now applicable to registered companies.

Officials in the MoC said different types of fees now realised for registration and renewal need to be doubled and clauses relating to offering of services to the private sector made easier.

Besides, the extended period for holding AGM, which is now 90 days, might be reduced to ensure transparency in the businesses. The penalty for failure to comply with the procedures for AGM, which is now Tk 10,000, should be five times higher, a committee member observed.