The ‘Companies (2nd Amendment) Bill, 2020’ was passed in parliament on Wednesday keeping a provision of formation of single-person companies, aiming to attract greater investment and do better in the global ease of doing business ranking.
Commerce Minister Tipu Munshi moved the bill to parliament and it was passed by voice vote, reports UNB.
According to the newly-passed bill, a one-person company can be formed and its owner and shareholder shall be a single entity (person).
The bill has also incorporated a separate part with provisions over registration, operation and management of single-person companies.
In the case of winding up of a company, the repayment of debts of the company shall be given priority, according to the law.
Another provision for an online registration system has been kept for companies in the bill.
In the law, the notice time for holding a board meeting was increased to a 21-day period from the existing 14-day one.
The government got a proposal from different quarters for giving recognition to one-person companies to attract more investment.
The government hopes that it will be possible to attract huge foreign investment in the country once the bill becomes a law.
According to the bill, the single-person company has to have paid-up capital of a minimum Tk 2.5 million to a maximum Tk 50 million. The minimum turnover of that company in the immediate past year will be Tk 10 million to Tk 500 million.
If the paid-up capital and turnover exceeds the amount, then the one-person company can be transformed into a private limited company or in some cases into a public limited company.
A single-person company has to hold at least one meeting of the board of directors every year. If the directors and the main person of this kind of company is one person then it will get relief in holding board meetings and decision-making processes.
If that one person dies then, as per the bill, the nominated person will get all the shares.
The proposed law mentioned that for handing over the shares of this kind of company, the presence of the particular person signing the signature on the handover papers through the commission has to be ensured.