Company Act to be amended soon to ensure transparency

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Nazmul Ahsan
The Ministry of Commerce (MoC) has initiated a move to amend the Company Act, 1994 with the objective of ensuring transparency in the operations of businesses in the country.
A six-member committee, headed by an additional secretary of the ministry, has been formed last week to make necessary recommendations to this effect. Representatives from different ministries and private sector have been included in the committee, according to an order issued by the MoC.
The committee has been asked to concentrate seriously on eight specific clauses of the company act for their updating. Besides, the committee would be free to make its recommendations on any of the 350 clauses incorporated into the act, the MoC order added.
Earlier, the Parliamentary Standing Committee on MoC suggested drastic revision and updating of the company act with a view to removing its lacunas that are often exploited by vested quarters to their advantage, sources said.
"The act will be amended soon, at least its eight clauses," a top commerce official said.
"As soon as the committee concerned makes available its report, technical cooperation and opinion may be sought from experts for amending the act."
The amendment to clauses that would receive top priority are ---alteration of Memorandum of Articles of Association of a company, power of court when confirming alteration, exercises of discretion by court, procedure on confirmation of the alteration, effect of failure to register within extended time, procedures of holding annual general meeting (AGM), penalty for default in complying with formalities in holding AGM and revision of the rates of different fees now applicable for registered companies, a top trade official said.
Officials in the MoC said different types of fees now realized for registration and renewal need to be doubled and clauses relating to offering of services to the private sector made easier.
Besides, the extended period for holding AGM, which is now 90 days, might be reduced to ensure transparency in the businesses. The penalty for failure to comply with the procedures for AGM, which is now Tk 10,000, should be five times higher, a committee member observed.
"We will sit soon to identify loopholes in the act, particularly those of the eight specific clauses," another committee member said.
"The suggestions of Parliamentary Standing Committee on MoC will be taken into account", he said.
However, a top MoC official said a senior lawyer might be included in the committee soon or the recommendations to be made by the committee placed before a panel of lawyers before sending the draft amendment to the act to law ministry for approval.