COMPANY ACT

Companies Act 1994 (Act XVIII of 1994) governs COMPANY LAW in Bangladesh. It
received the assent of the President of the People's Republic of Bangladesh on 11
September 1994 and was published in the Bangladesh Gazette, Extra, 12 September
1994. Before its enactment in 1994, company law was governed by the Companies Act
1913 which was amended in 1915, 1920, 1926, 1930, 1932, 1936, 1938, 1949 and 1969,
1973 and 1984.

The Companies Act 1994 has 11 parts.

Part-I contains the preliminary aspects of the act including the short title of the act,
commencement and extent, definitions of various terms.

Part-II is concerned with formulation and incorporation of companies, including bank

Part-III mainly narrates the rules for share capital, registration of unlimited company as
limited, and the limited liability of directors.

Part-IV states the framework for regulating the management and administration of
companies, the requirements for having a registered office of a company with a distinct
name at a specific place, the provisions for penalties for non-disclosure of name, and the
way to show the authorised, subscribed and paid up capital of companies. This part
includes the rules and conditions for appointment of managing agent, the provision for
contracts and execution of deeds, power of companies to use their seal abroad, rules
regarding company prospectus, the powers of a company to pay interests, commissions
and discounts and to allocate and issue additional shares, the provisions for information
and procedure as to mortgage and other unregistered charges.It also provides
requirements and rules to keep proper accounts, preparation and submission of balance
sheets, other statements and records, as well as provisions for penalty for not keeping
proper books of accounts.

Part-V of the act provides details of the mode and methods of winding up, liabilities of
contributories and their successors, procedures and options of winding up, ordinary and
extraordinary power of courts to be involved in the winding up process, appointment of
official liquidator and their powers and duties, settlement of debts of companies and
transfer and distribution of assets and liabilities.

Part-VI deals in matters relating to the registered offices of companies; appointment of

1
 Part-VII interprets the rules of application of the act to companies formed and registered
under former Companies Acts.

Part-VIII identifies and defines the companies capable of being registered, the various
aspects required for registration and the power to substitute memorandum and articles for
deed of settlement, etc.

The main concern of Part-IX of the act is the procedure for winding up of unregistered
companies. This part explains the meaning of unregistered companies; procedure for their
winding up; power to stay or restrain proceedings; suits stayed on winding up order;
directions as to property in certain cases; and the status of provisions of this part
cumulative.

The contents of Part-X include the requirements for establishing foreign companies in
Bangladesh, rules for regulating them, preparation, maintenance, audit and submission of
their accounts to the host country regulators; notice for closure of foreign companies in
Bangladesh; and restrictions on sales and offer for sale of shares.

Finally, Part-XI is supplemental and relates legal proceedings, offences, etc. The subject
matters elaborated in it are cognizance of offences, application of fines, power to require
limited company to give security for costs, and penalty for wrongful withholding of
property.

The Companies Act has twelve schedules. The following is a list of them along with the
section numbers: Regulation for management of a company limited by shares (sections 2,
17, 18, 86, 367); table of fees to be paid to the registrar (sections 348, 363); particulars of
prospectus and reports incorporated in it (section 135); statement in lieu of prospectus
(section 141); memorandum and articles of associations of the various types of
companies; summary of share capital and lists of shareholders/directors in accordance
with Part One of the Companies Act 1994 (section 36); specimen of company balance
sheets and instruction for profit and loss accounts (section 185); and statements to be
published by bank and insurance companies, deposits/provident/welfare associations
(section 192).

2
 FACTORY ACT

Factories Act 1965 (Act XXV of 1934) adopted with the objective of regulating the
appointment of workers, their wages and the working conditions in factories, including
health and hygiene, safety, welfare, working hours, leave and holidays, and punishments
and penalties for both the owners and workers for non-compliance of the requirements.
East Pakistan Factories Act 1965 was published in the Dhaka Gazette Extraordinary in
September 1965. The government of Bangladesh adopted the Act and declared it
enforceable throughout the country. It has 11 chapters and 116 main sections.

The Act defines and clarifies various terms included in it. Important among such terms
are: adolescent, adult, child, day, explosive substance, factory, machinery, manufacturing
process, occupier, prime mover, shift in factory, transmission machinery, working hour,
and wages.

The Act incorporates rules for appointing the chief inspector, inspectors and certifying
surgeons by the government for overseeing the purposes of the Act and certifying the
fitness of workers. According to the Act, every factory is to be maintained clean and free
from effluvia arising from any drain, privy or other nuisance. Effective arrangements are
to be made in every factory for the disposal of wastes and effluents, prevention of
accumulation of dust and fume, and proper ventilation and maintenance of room
temperature.

The Act requires that factory must ensure adequate fire safety measures, appropriate
means of escaping in case of fire, and protection against dangerous and accident-prone
parts of machinery, electric and mechanical devices, self-acting machines, etc. Workers
are to be given proper training before they are employed on dangerous machines.
Controlling appliances of cranes and other lifting machines, hoists and lifts must be of
good construction, sound material and adequate strength. Other sources of dangers, such
as pits, sumps, openings in floors, etc, should be securely covered or fenced and effective
screens or suitable goggles should be provided to workers to protect their eyes. Every
factory is to have adequate and suitable facilities for washing and bathing and provide
first-aid medicines and appliances. Canteens and rooms for children should also be
maintained. In every factory wherein five hundred or more workers are employed, the
occupier should employ a number of welfare officers as may be prescribed.

Under the Act prohibits employment of any child under the age of 14 in any factory. An
adolescent may be employed only after granting a certificate of fitness issued by a
certifying surgeon. Working hours for such young persons, if employed, shall not be
more than five hours a day. They shall not be allowed to work between 7 pm and 7 am. In
every factory, a notice of the periods of work for children shall be displayed and a
register maintained. The inspector of factories is empowered to order the medical
examination of a child worker if required.

3
Under different circumstances and conditions laid down in various sections of the Act,
workers are entitled to have certain days as annual leave with wages, festival holidays,
and casual and sick leave. However, the workers may be allowed some leave without
pay. The government is empowered to make rules regarding leave and holidays for
factory workers. The Act has provisions regarding dangerous operations in any factory,
notices of certain accidents, dangerous occurrences and certain diseases.

The Factories Act has provisions for making appeal by parties concerned in factories,
such as owner/occupiers, managers, inspectors and workers. The government can
formulate rules for factories for the submission of returns to regulatory authorities.
Workers are prohibited to interfere in any affairs of the factory, which may cause loss or
damage to the factory itself or to other workers. The Act also made a provision for repeal
and it declared that notwithstanding the repeal, any order or notification issued, any
action taken, any proceeding commenced or anything done under any provision of the
Act shall continue in force.