The Companies Act (Bangladesh), 1994

(See section 404)

(Published by Notification No. SRO 177-law dated 1-10-95. of Ministry of Commerce)
Act No. 18 of 1994
An Act
to consolidate and amend the law relating to companies and certain other associations.
WHEREAS it is expedient to consolidate and amend the law relating to companies and certain
other Associations;
It is hereby enacted as follows:
PART-I
PRELIMINARY
1.Short title and commencement
(1) This Act may be called the Companies Act, 1994.
(2) It shall come into force on such rate as the Government may, by notification in the
Official, Gazette, appoint.

2. Definitions
(1) In this Act, unless there is anything repugnant in the subject or context-
(a) "articles" means the articles of association of a company including, so far as they apply to the
company, the regulations contained in Schedule I to this Act:
Provided that the article of association of a company framed under any law relating to companies
at any time in force before the commencement of this Act shall, so far as they are not inconsistent
with the provisions of this Act, be deemed to be the articles of association of that company framed
in accordance with the provisions of the Act:
(b) "banking company" means a bank company as defined in section 5(9) of the Act, 1991 (Act
No. 14 of 1991).
(c) "company" means a company formed and registered under this Act or an existing company;
(d) "The Court" means the Court having jurisdiction under this Act;
(e) "debenture" includes debenture stock, bonds and any other securities of a company, whether
constituting a charge on the assets of company or not;
(f) "director" includes any person occupying the position of director by whatever name called;
(g) "District Court" means the principle Civil Court of original jurisdiction in a district, but does
not include the High Court Division, in the exercise of its ordinary civil jurisdiction;
(h) "existing company" means a company formed and registered under any law relating to
companies in force at any time before the commencement of this Act, and is in operation after
commencement of this Act,
(i) "financial year" means, in relation to anybody corporate, the period in respect of which any
profit and loss account of the body corporate laid before it in annual general meeting is made up,
whether that period is a year or not; Provided that in relation to an insurance company, "financial
year" shall mean the calendar year;
(j) "insurance company" means a company that carries on the business of insurance either solely
or in common. with any other business or businesses;
(k) "manager" means an individual who, subject to the superintendence, control and direction of
the Board of Directors, has the management of the whole, or substantially the whole, of the affairs
and business of a company, and includes a director or any other person occupying the position of
a manager, by whatever name called, and whether under a contract of service or not;
(l) “managing agent’’ means a person, firm or company by whatever name called, who or which
is entitled to the management of the whole affairs and business of a company by virtue of an
agreement with the company, and under the control and direction of the directors except to the
extent, if any, otherwise provided for in the agreement;
(m) "managing director" means a director who, by virtue of an agreement with the company or
of a resolution passed by the company in its general meeting or by its directors or by virtue of its
memorandum or articles of association, is entrusted with the substantial powers of management
which would not otherwise be exercisable by him and includes a director occupying the position
of a managing director by whatever name called;
Provided that the powers to do administrative acts of a routine nature when so authorised by the
directors such as the power to affix common seal of the company to any document or to draw and
endorse any cheque on the account of the company in any bank or to draw and endorsed negotiable
instrument or to sign any certificate of share or to direct registration of transfer of any shares shall
not be deemed to be included within the substantial powers of management:
Provided further that a managing director of a company shall exercise his powers subject to the
superintendent control and direction of the directors.
(n) "memorandum" means the memorandum of association of a company as originally framed or
as altered in pursuance of the provisions of this Act;
(o) "officer" means a director, managing agent, manager secretary or any other officer of a
company and also includes--
(i) where the managing agent is a firm any partner in the firm;
(ii) where the managing agent is a body corporate, any director or manager of the body
corporate;
(iii) where the secretary is a body corporate;
Provided that. except for the purpose of sections 331, 332, and 333, the form "officer" shall not
include an auditor.;
(p) "prescribed" means as respects the provisions of this Act relating to the winding up of
companies, prescribed by rules
made by the Supreme Court and, as respect the other provisions of this Act, prescribed by the
Government;
(q) "private company" means a company which by its articles--
(i) restricts the right to transfer its shares, if any;
(ii) prohibits any invitation to the public to subscribe for its shares or debenture, if any;
 (iii) limits the number of its members to fifty not including persons who are in its
employment;
Provided that where two or more persons hold one or more shares in a company jointly, the shall,
for the purposes of this definitation be treated as a single member;
(r) "public company" means a company incorporated under this Act or under any law at any time
in force before the commencement of this Act and which is not a private company;
(s) "Registrar" means a Registrar or any other officer, by whatever designation, performing under
this Act the duty of registration of companies;
(f) "Schedule" means a schedule to this act;
(u) "secretary" means any individual possessing the prescribed qualifications appointed to
perform the duties which may be performed by a secretary under this Act and any other ministerial
or administrative duties, and
(v) "share" means a share in the capital of the company and includes stock except when a
distinction between stock and shares is expressed or implied.
(2) For the purposes of this Act, a company shall subject to the provisions sub-section (4), be
deemed to be a subsidiary of another, if--
(a) that other contracts the composition of Board of Directors of the first mentioned
company.
(b) the first mentioned company, being an existing company, has before the
commencement of this Act, issued preference shares the holders of which have the same
voting right in all respects as the holders of equity shares and that other company exercises
or controls more than half of the total voting power of the first mentioned company; or
(c) the first mentioned company is not a subsidiary within the meaning of clause (b), but
that other company holds more than half in nominal value of its equity share capital; or
(d) the first mentioned company is a subsidiary of a third company with is that other's
subsidiary.
(3) For the purposes of sub-section (2), the composition of a company's Board of Directors
shall be deemed to be controlled by another company if, that other company, by the exercise of
some power exercisable by it at its discretion without the consent or concurrence of any other
person, can appoint or remove the holders of all or a majority of the directors, and for the purposes
of this sub-section that other company shall be deemed to have power to appoint to a directorship
with respect to which any of the following conditions is satisfied, that is to say--
(a) that power of appointment cannot be exercised except in favour of an individual,
(b) that an individual appointment thereto follows necessarily from his appointment as
director, managing agent, secretary or manager of or to any other office of employment in,
that other company; or
(c) that the directorship is held by an individual nominated by that other company or a
subsidiary thereof.
(4) In determining whether one company is a subsidiary of another the following conditions
shall be applicable namely:-
 (a) any shares held or power exercisable by that other company in a fiduciary capacity shall
be treated as not held or exercisable by it.
(b) subject to the provisions of clauses (c) and (d) any shares held or power exercisable
shall be deemed to be the shares held or power exercisable by that other company, if--
(i) the shares are held, or the power is exercisable by a person as a nominee and on
behalf of that other company, but this clause shall not apply to the holding of such
shares or to the exercise of such powers by such person where that other company
is concerned in a fiduciary capacity.
(ii) the shares are held, or the power is exercisable by a subsidiary of that other
company or by a nominee of such subsidiary, but this clause shall not apply to the
holding of such shares or to the exercise of such powers by the subsidiary or by its
nominee where the subsidiary is concerned in a fiduciary capacity;
(c) any shares held or power exercisable by any person by virtue of the provisions of any
debentures of the first-mentioned company or of a trust deed for securing any issue of such
debentures shall disregarded;
(d) if any shares are held or power is exercisable, not being held of exercisable as
mentioned in clause (c),
(i) by that other company or by its subsidiary or by a nominee of that other or its
subsidiary as the case may be, and
(ii) the ordinary business of that other company or as the case may be of its
subsidiary includes the lending of money and such shares are held or the power is
exercisable by way of security of the loan [then such power shall not be treated as
being held or exercisable by such company or its nominee.]
(5) For the purposes of this Act' a company shall be deemed to be the holding company of
another if, and only if, that other is its subsidiary.

3. Jurisdiction of the Court.

(1) The Court having jurisdiction under this Act shall be High Court Division;
Provided that the Government may be notification in the Official Gazette and subject to such
restrictions and conditions as it thinks fit, empower any District Court to exercise all or any of the
jurisdiction by this Act conferred upon the Court, and in that case such District Court shall as
regards the jurisdiction so conferred, be the Court in respect of all companies having their
registered office in the district.
Explanation: For the purposes to wind up companies the expression "registered office" means the
place where the registered office of the company, during the six months immediately preceding
the presentation of the petition of winding up was situated.
(2) Nothing in this section shall invalidate a proceeding by reason of its being taken in a wrong
Court
 PART-II
CONSTITUTION AND INCORPORATION

4. Prohibition of partnership exceeding certain number:

(1) Nor company, association or partnership consisting of more than ten persons shall be formed
or the purpose of carrying on the business of banking unless it is registered as a company under
this Act or is formed by or under any other Act of Parliament.
(2) No company association or partnership consisting of more than twenty persons shall be formed
for the purpose of carrying on any other business that has for its objects the acquisition of gain by
the company, association or partnership, or by the individual members thereof unless it is
registered as a company under this Act or is formed by or under any other Act of Parliament.
(3) This section shall not apply to joint family carrying on joint family business or trade.
Provided that for the purposes of this section, in computing the number of persons of a partnership,
association or company comprising two or more joint families, minor members of such families
shall be excluded.
(4) Every member of a company, association or partnership carrying on business in contravention
of this section shall be personally liable for all liabilities incurred in such business.
(5) Any person who is a member of a company, association or partnership formed in contravention
of this section shall be punishable with fine not exceeding five thousand taka.
Memorandum of Association
5. Mode of forming incorporated company.
Any seven or more persons or, where the company to be formed will be a private company, any
two or more persons associated for any lawful purpose may, be subscribing their names to a
memorandum of association and otherwise with the requirements of this Act in respect or
registration form an incorporated company, with or without limited liability, that is to say, either-
a. a company limited by shares, that is to say, a company having the liability of its member
limited by the memorandum to the amount, if any, unpaid on the shares respectively held
by them; or
b. a company limited by guarantee, that is to say, a company having the liability of its
members limited by the memorandum to such amount as the members may respectively
thereby undertake to contribute to the assets of the assets of the company on the event of
its being wound up; or
c. an unlimited company, that is to say, a company having no limit on the liability of its
members.
6. Memorandum of company limited by shares.
In the case of a company limited by shares.
1. the memorandum shall state.
a. the name of the company, with "limited" as the last word in its name;
b. The address of the registered office;
 c. the objects of the company, and, except in the case of trading companies, the territories
to which they extend;
d. that the liability of the members is limited;
e. the amount of share capital with which the company proposes to be registered, and the
divisions thereof into shares of a fixed amount;
2. each subscriber of the memorandum shall take at least one share;
3. each subscriber shall write opposite to his name the number of shares he takes.
7. Memorandum of company limited by guarantee.
In the case of a company limited by guarantee-
(a) the memorandum shall state-
a. the name of the company, with "limited" as the last word in its name.
b. the address of the registered office;
c. the objects of the company, and, except in the case of trading companies, the territories
to which they extend;
d. that the liability of the members is limited;
e. that each member undertakes to contribute to the assets of the company in the event of
its being wound up while he is a member or within one year afterwards, for payment
of the debts and liabilities of the company contracted before he ceases to be a member,
and of the charges and expenses of winding up, and for adjustment of the right of the
contributories among themselves, such amount as may be required, not exceeding a
specified amount;
(b) if the company has a share capital-
a. the memorandum shall also state the amount of share capital with which the company
proposes to be registered and the division thereof into shares of a fixed amount;
b. each subscriber of the memorandum shall take at least one share;
c. each subscriber shall write opposite to his name the number of shares he takes.
8. Memorandum of unlimited company.
In the case of an unlimited company
a. the memorandum shall state-
a. the name of the company;
b. the address of the registered office of the company;
c. the objects of the company and, except in the case of trading companies, the
territories to which they extend.
b. if the company has a share capital-
a. each subscriber of the memorandum shall take at least one share;
b. each subscriber shall write opposite to his name the number of shares he takes.
9. Printing and signature of memorandum.
The memorandum of every company shall--
a. be printed;
b. be divided into paragraphs numbered consecutively; and
 c. be signed by each subscriber, who shall add his address and description in the
presence of at least two witnesses who shall attest the signature.
11. Name of company and change of name.
1. A company shall not be registered by a name identical with that by which a company
in existence is already registered, or so nearly resembling the name that there is
likelihood of using the name to deceive, except where the company in existence is in
the course of being dissolved and signifies its written consent in such manner as the
Registrar requires.
2. If a company, through inadvertence or otherwise, is, without the consent referred to in
sub-section (1), registered by a name identical with that by which a company in
existence is previously is registered, or so nearly resembling the name that there is
likelihood of using the name to deceive, the first mentioned company shall, on the
direction of the Registrar, change its name within a period of one hundred and twenty
days.
3. If a company makes a default in complying with the direction made under sub-section
(2), the company shall be punishable with fine of five hundred take for every day during
which the default continues and every officer who is in default shall be punishable with
fine of one hundred taka for every day during which the default continues.
4. Except with the previous consent in writing of the Government, no company shall be
registered by a name which is declared by the Government by notification in the official
Gazette, as undesirable:
Provided that nothing in this sub-section shall apply to companies registered before the
commencement of this Act.
5. No company shall be registered by a name containing in any form the name or any
abbreviation of the name of the United Nations or of any subsidiary body set up by the
United Nations or of the World Health Organisation unless the company has obtained
the previous authorisation in writing of the Secretary General in the case of the United
Nations or the subsidiary body as aforesaid or of the Director General of the World
Health Organisation in the case of that Organisation.
6. Any company may, by special resolution and subject to the approval of the Registrar
signified in writing, change its name.
7. Were a company changes its name, the Registrar shall enter the new name on the
register in place of the former name, and shall issue a certificate of incorporation in its
new name to meet the circumstances of the case and on the issue of such a certificate,
the change of name shall be complete.
8. The change of name shall not change any rights or obligations of the company or render
defective any legal proceedings by or against the company; and any legal proceedings
that might have been continued or commenced against it by its former name may be
continued or commenced against it by its new name.
9. A company may, on payment of such fee as may be prescribed, apply to the Registrar
for information whether any company is registered or proposed to be registered by a
name specified in the application and the Registrar shall furnish the required
information within a period of thirty days from the date of receipt of the application.