Observing that the Companies Act, 1994 is unenforceable in many cases, the High Court has suggested bringing radical changes to the present company act in order to take Bangladesh to the level of a developed country.
It has also suggested taking necessary steps to constitute one or more Company Law Tribunal in each district in proportion to the number of companies and one Company Appellate Tribunal in each division.
The 14-point suggestions came in the full text of the judgement delivered by the HC after disposing of two company matters filed by Md Uzzal regarding the ownership of ‘Top Ten Fabrics and Tailors Limited’.
Justice Md Ashraful Kamal delivered the short verdict on August 25 in 2022, while the 232-page full text of the verdict released on the SC website recently.
In the observation the court also said, “There is only one company court for millions of private and public limited companies in a country with a population of about 170 millions. Due to having only one company bench for numerous company disputes, the day-to-day operations are facing tremendous losses.”
“If the disputes can be settled quickly, the companies will be able to improve themselves and contribute to the development of the country.
It will take a long time to rise to the level of the developed world if our company laws are not molded on the model of the modern and developed world. An advanced and modern company law will develop a prosperous country,” also read the verdict.
The High Court has recommended the commerce ministry to immediately take necessary steps to draft a new company act amending the present law on the model of India's Company Act. It also asked the Ministry to take necessary steps to update the Act every year.
The HC advised the Ministry to take necessary steps to establish Special Criminal Courts for the offenses under the Companies Act, and to take appropriate steps to modernise and strengthen the legal framework of the Office of the Registrar of Joint Stock Companies and Firms (RJSC) and to improve its services.
It also directed the Ministry to issue necessary instructions for preservation of the Corporate Law Code in the offices of every company, by publishing it in Bangla.
It also asked the Ministry to issue instructions by making it mandatory to appoint a permanent legal officer by creating a post of a permanent legal officer in every company, and a lawyer experienced in company law as a consultant.
It suggested establishment of training centre in each district under the Ministry of Commerce for the training of company formation and management and to make it compulsory for the officers of every company to undergo regular training from the said training center at least once a year.
It also asked the Ministry to take necessary steps to mandate the appointment of one independent director, company secretary, internal auditor in every company, and every company with a paid-up capital above Tk 50 million to have a full-time company secretary (who will be a member of the ICSB).
