The proposed amendment to the Companies Act allowing formation of a company by a single person is facing the first hurdle as the finance ministry is in favour of making a fresh review.
The government made a move to amend the Companies Act 1994 with a provision of forming a company by a single person mainly to attract local and foreign investment.
To this effect, the Cabinet approved a draft of the amendment in November 2018.
People at the legislative division that prepares acts for passage in parliament said the amendment is delayed as ministry concerned wants to review it again.
"The Ministry of Finance seeks to discuss it with stakeholders," an official familiar with the development told the FE on Thursday.
Finance minister AHM Mustafa Kamal, among others, attended a ministerial meeting in the first week of September. There was no development since then.
"In the circumstances, we cannot progress further…" he said.
So, this will go to the Cabinet again and then to legislative division to prepare a draft act for parliament that will give a final nod.
Meanwhile, there was a scheduled meeting on the matter on September 28, but people at legislative division said the meeting was also postponed as the ministry did not give details.
However, according to the draft act obtained by the FE, a new section named 'single person company' will be included in the 12th section of the companies act.
The company will be defined as an institution where a single natural person would be its lone shareholder, according to the proposed amendment.
It is believed to be an artificial person as per the Companies Act which is meant for a going concern as well.
OPC [one-person company] will be added at the end of such entities to indicate the limited companies.
The government moved to create an environment conducive to businesses and attract local and foreign investment in the country which witnessed a lean period recently.
Apart from this, such type of entities will help attain higher ranking in the 'Ease of Doing Business' of the World Bank, the draft said.
The memorandum and articles will be prepared for one-person company, a rare inclusion in the Companies Act of Bangladesh.
The registered documents must have a nominee which will take over the responsibly after the death of the main sponsor or subscriber, the draft said.
If the main subscriber dies or is unable to conduct the one-person business, the nominee will run it.
Under such company, the lone sponsor will be treated as first director of the company. He may appoint another directors, manager and company secretary.
Such company will hold at least one meeting in six months.
The main sponsor or first director will sign balance sheet and other financial statements.
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