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Commerce Minister Tipu Munshi introduced the ‘Business Bill (Second Amendment) 2020’ in Parliament on Monday. The bill was subsequently examined and sent to the Standing Parliamentary Committee of the Ministry of Commerce for reporting to Parliament.
Under the Corporations Law, private corporations are now governed by boards of directors. The directors and chairmen of this board must follow certain rules.
According to the definition of the proposed law, ‘sole proprietorship’ is a company whose board of directors has only one member.
Fakhrul Imam, a member of the opposition Jatiya party, opposed raising the bill in Parliament. He demanded that the definition of person be defined as “a person with a natural being”.
Fakhrul Imam also expressed doubts about the enactment of the law, as there are businessmen in the cabinet.
In response, said the trade minister, these issues will be discussed in the parliamentary committee. Referring to his political life, the minister said: “He does business without touching anyone.”
In Parliament, said the Minister, there are companies of this type in different countries of the world. The government has taken the initiative to modify this law to increase foreign investment in the country.
The proposal to oppose raising the bill was later rejected in a vote in Parliament.
According to the bill, the paid-up share capital of an individual company will be at least Tk 50 lakh and not more than Tk 10 crore. Immediately, the annual turnover of the previous financial year will be at least Tk 2 crore and Tk 100 crore.
If the amount of paid-up share capital and annual turnover is higher, a person’s company can become a limited liability company or, where appropriate, a public limited company, subject to conditions.
As the director and the main person are one, these companies will be exempt from the rules in the process of meeting the board and making decisions. However, a sole proprietorship must hold at least one board meeting a year. If the sole director dies, all shares will be owned by his nominee.
In the case of transfer of shares of said company, the bill seeks to ensure the personal presence of the transferor and the signing of the transfer deed through the commission. The bill states that creditors should be given priority in repaying loans if the company goes up.
The company law has been amended to provide for online registration. Current law provides for a board meeting with 14 days notice. The proposed law proposes that it be 21 days.
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