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Seminar on Reform of Companies Act 1994
DCCI President Barrister Md. Sameer Sattar said that the reform of the existing Companies Act 1994 is now the pressing demand of time to create wider business confidence in the country as well as to attract FDI. He told this at a seminar on “Reform of Companies Act 1994” organized by the Dhaka Chamber of Commerce & Industry (DCCI) held on 18 November, 2023 at DCCI auditorium. He also added that in order to fostering a pro-business environment with corporate governance in Bangladesh, formulation of relevant policies including Companies Act is instrumental. He also said that this century old Companies Act is limited to private and public limited companies and unable to cater cross-sectional and diverse businesses and competitiveness of private sector in the changing geo-economic business dynamics. He later recommended for incorporating full-fledged automation and maximum flexibility to use technology within the framework, provision of Alternate Dispute Resolution (ADR) for speedy dispute resolution, provision of incorporating Intellectual Property Rights (IPR). He also pleaded for separate section on Merger and Acquisition that needs to be incorporated at par global practice. Lastly, he stressed on increasing capacity of Registrar of Joint Stock Companies (RJSC) to better monitor and enforce company law compliance and governance.
Senior Secretary of the Ministry of Commerce, Government of Bangladesh Tapan Kanti Ghosh graced the seminar as the chief guest. He informed that the revised Companies Act is now at his Ministry after necessary vetting and scrutiny from Ministry of Law. Soon it will be sent to the Cabinet Division to appraise it to the National Parliament, he said. Regarding automation of RJSC, he told that the software of RJSC will be in place by December this year. He said “we don’t want to make businesses complicated, rather less interference brings more efficiency at the end, and we believe in this philosophy”. Too much restriction by the law will not bring positive result, he also added. Besides, he requested the businesses not to do profit only, rather, think about the community, society and well-being of mankind while doing business. He agreed that not all the companies are same in size, so the government has to give support to the SMEs as this category is the lifeline of our economy. He later emphasized that Intellectual Property Rights (IPR) is very crucial for fare competition in businesses.
Barrister Rashna Imam, Advocate, Supreme Court of Bangladesh presented the keynote paper. She highlighted few reform proposals like the need of robust legal framework for merger and acquisition to fill the legislative vacuum. Currently winding up procedures for a company is a lengthy and expensive process. She recommended to make it much easier. She also pleaded for mandatory provision of alternative dispute resolution (ADR) or mediation to be inserted in the new Companies Act. She also said that “Independent Director” should be mandatory for publicly unlisted companies for better transparency. Provision of appointment, qualifications, roles and responsibilities of Company Secretary for all companies needs mandatory, she added.
Md. Shahadat Hossain, FCA, Council Member & Former President, ICAB said that timely execution of Annual General Meeting is very important for compliance. Winding up of a company should be easier and the process should be short. In maximum private companies independent director can be introduced for transparency, he opined. There is no unique definition of SME in the country, but it is very essential, he said.
Md. Abdur Rahman Khan, FCMA, President of ICMAB said that reform of the Companies Act will ease the business processes. Companies Law is a dynamic law in nature, with the changes of time, the law needs to be updated with the changing dynamics of world businesses. The Companies Law should be amended in every two to three years to make it more subjective with the businesses. All companies are not same so in terms of implementation of regulations, it should be kept in mind.
Md. Abdus Samad Al Azad, Registrar (joint Secretary), RJSC said that automation of RJSC will bring more efficiency of this institution. He also said that at least seven to eight more functions of RJSC should be streamlined to give better services. The matter of confidentiality in connection with business account and password should be maintained by the Act, he mentioned.
Martin Holtmann, Country Manager, IFC Bangladesh said that the current Act is not fit for modern financing instruments. First of all we need to reduce the risks, he added. We need to formalize the informal sector outside the data, he added. In recent past Bangladesh did a tremendous improvement in terms of economy. If Bangladesh can do a radical changes in the Companies Act it will bring enough confidence on businesses, he added.
Chairman and Managing Director of Unilever Bangladesh Zaved Akhter emphasized on integration and compliance of Company Act. He also underscored the need of implementing ADR for any business dispute settlement.
In the open discussion session, other speakers also urged for effective and timely implementation of Companies Act to ease business process aligned with modern rules and regulations. DCCI Senior Vice President SM Golam Faruk Alamgir (Arman) and Vice President Md. Junaed Ibna Ali were also present during the seminar.
Published on: 2023-11-18