The government looks to establish a separate appellate authority to resolve legal disputes that arise during the company formation or registration in the country.
This provision is set to be included in the latest Companies Act, which is currently at the final stage of formulation, officials said last week.
"Currently a lot of legal disputes arise between the start-ups and the Registrar of Joint Stock Companies and Firms during the company formation, which ends up in High Court", Additional secretary of the commerce ministry Md. Obaidul Azam said.
"Such disputes involve simple issues like rectifying a few words in the company's Memorandum of Understanding or making some changes in the company's objective clause", Mr Azam said.
"However, if we can form a separate appellate authority or arbitration body for resolving these disputes beforehand, then it would ease the process of company formation while also easing the backlog of cases in the top court", he added.
The official noted that such an appellate authority can be formed within the ministry or the government can form a separate entity for the purpose.
"We'll decide on the detailed modality of forming this appellate authority in the next meeting on the Companies Act with the relevant stakeholders", Mr Azam said.
"We are expecting to get the final draft of the new act by the end of this month, which will later be sent to the Cabinet for the next round of approval", he added.
The draft Companies Act, which is likely to be passed by parliament within this fiscal year, has already incorporated several recommendations for easing the process of forming a company and for protecting the interest of minority investors, officials said.
For instance, the new law is likely to eliminate the obligation to obtain an official seal as a precondition for forming a company.
The new law is also set to have a provision requiring shareholders' approval before the disposal of company assets.
In addition, the act is likely to have a provision requiring more detailed notices to be sent to shareholders at least 21 days before general meetings.
At the same time, the law would also ensure that shareholders are paid within a certain timeframe when dividends are declared, according to officials.
It had been reported earlier that the new law is likely to free up the business-registration procedures allowing sole-proprietorship companies-meaning even a single person can float a company.
Such provision, the officials said, would enable numerous sole-proprietorship companies to come under the tax net as well as formal auditing scheme.
They said this would enhance the culture of transparency in business activities and would also increase government revenue from sole proprietorships.
The latest law will have a provision for introducing an online single interface for business registration by integrating the name-clearance and incorporation processes with the tax and VAT-registration procedures.
Also, the law is set to promote digitisation of business processes through incorporating provisions for e-signature and promulgating the use of online-payment gateway.
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