COMPANY LAW:

Company registration in Bangladesh

A private limited company in Bangladesh is a separate legal entity and shareholders are not
liable for the company’s debts beyond the amount of share capital they have contributed.
According to the Companies Act 1994, any person (foreign or local) above the age of 18 can
register a company in Bangladesh.
PRE-REGISTRATION
Company Name. The name must be approved (cleared) before incorporation of the company in
Bangladesh.
Directors. Minimum two directors are mandatory. Directors can be either local or foreign.
Directors must be at least 18 years of age and must not be bankrupt or convicted for any
malpractice in the past. The law requires that a director must own qualification shares stated in
the Articles of Association. A shareholder which is not a natural person (i.e. a company) can
select nominee director.
Shareholders. A private limited company in Bangladesh can have a minimum of 2 and
maximum of 50 shareholders. A director and shareholder can be the same or a different person.
The shareholder can be a person or another legal entity such as another company. 100% local or
foreign shareholding is allowed in most sectors. New shares can be issued or existing shares can
be transferred to another person anytime after the Bangladeshi company has gone through the
incorporation process.
Authorized Capital. You must state the authorized capital in the Memorandum of Association
and Articles of Association. It is the maximum amount of share capital that the company is
authorized to issue (allocate) to shareholders. Part of the authorized capital can remain unissued.
There is no minimum or maximum limit for authorized capital in Bangladesh.
Paid-up Capital. Minimum paid-up capital for registration of a Bangladeshi company is Taka
1. Paid-up capital (also known as share capital) can be increased anytime after the incorporation
of the company.
Registered Address. In order to register a company in Bangladesh, you must provide a local
address as the registered address of the company. The registered address must be a physical
address (can be either a residential or commercial address) and cannot be a P.O. Box.
Memorandum and Articles of Association. The company to be incorporated must prepare a
memorandum of association (MoA) and articles of association (AoA).
REQUIRED DOCUMENTS
For the purpose of company incorporation in Bangladesh, the following information is required
by the company registrar:
Company Name. A name clearance must be obtained.

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Memorandum of Association and Articles of Association. RJSC requires that the object clause
in the MoA to be within 400 words and 7 clauses.
Shareholders Particulars (National ID if the shareholder is a Bangladeshi)
Directors Particulars (including Tax Identification Number)
Registered Address

Resolution:
The word “resolution” is not defined in our Companies Act 1994. Usually, in terms of company
law, a resolution means the formal decision of a body (either the board of directors and/or
shareholders) which has been taken in a meeting after proper deliberations. If the agenda is
approved by a majority of the directors/shareholders, it becomes a resolution.
Kinds of resolutions:
Under the Companies Act 1994, (the “Act”) there are three kinds of resolutions for general
meetings – i) Ordinary; ii) Special; and iii) Extraordinary resolution.
There is also resolution of board meetings. But in this post, I will only discuss resolutions of
general meetings.
Ordinary resolution:
In the Act it is not clarified what kind of resolution can be called ‘Ordinary Resolution’. An
ordinary resolution is a resolution which is passed by a simple majority of the shareholders who
are entitled to vote at a general meeting of the company. In the Act there are certain business
which is required to be approved by resolution in a general meeting. Those resolutions mean an
ordinary resolution unless the context otherwise provides.
Extraordinary resolution:
According to section 87 (1) of the Companies Act, a resolution is an extraordinary resolution if -
i) in the notice it was mentioned that this would be an extraordinary resolution; ii) passed by a
majority of three fourth of the members who are entitled to vote as are present in person or by
proxy, where proxy is allowed.
Special Resolutions:
Special resolution is described in section 87(2) of the Companies Act. A special resolution is a
resolution -i) which has been passed by such a majority as required for passing an extraordinary
resolution; ii) in the notice it was mentioned that the resolution would be a special resolution;
and iii) a notice of not less than 21 days’ has been given.
So, from section 87(1) and 87(2) of our Companies Act, it transpired that the basic difference
between extraordinary resolution and special resolution is that for special resolution, you must
serve a 21 days’ notice to the shareholders.
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But, for holding a valid shareholder meeting (except Annual General Meeting), you must serve a
21 days’ notice to the shareholders. (There is also the option of calling a shareholder meeting
with a short notice.

Corporate Veil:
A legal concept that separates the personality of a corporation from the personalities of its
shareholders, and protects them from being personally liable for the company’s debts and other
obligations. Salomon v. A Salomon & Co. Ltd

Lifting Of Corporate Veil:

At times it may happen that the corporate personality of the company is used to commit frauds and
improper or illegal acts. Since an artificial person is not capable of doing anything illegal or
fraudulent, the façade of corporate personality might have to be removed to identify the persons
who are really guilty. This is known as ‘lifting of corporate veil’.

Judicial Provisions Or Grounds For Lifting The Veil-

Fraud or Improper Conduct

For Benefit of Revenue-“
Enemy Character-
Where The Company Is a Sham-
Company Avoiding Legal Obligations-
Single Economic Entity-
Agency or Trust-
Avoidance of Welfare Legislation-
Public Interest-

Statutory Provisions for Lifting The Veil-

Reduction of Number Of Members-

Fraudulent Trading-
Misdescription of The Company-
Premature Trading-
Failure To Refund Application Money-
Holding And Subsidiary Companies

BASIS FOR PRIVATE

PUBLIC COMPANY
COMPARISON COMPANY
Meaning A public company is a A private company is
company which is owned a company which is
and traded publicly owned and traded
privately.

Minimum members 7 1

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 BASIS FOR PRIVATE
PUBLIC COMPANY
COMPARISON COMPANY
Maximum members Unlimited 200
Minimum Directors 3 2
Suffix Limited Private Limited
Start of business After receiving certificate After receiving
of incorporation and certificate of
certificate of incorporation.
commencement of
business.
Statutory Meeting Compulsory Optional
Issue of prospectus / Obligatory Not required
Statement in lieu of
prospectus
Public subscription Allowed Not allowed
Quorum at AGM 5 members must present 2 members must
in person. present in person.
Transfer of shares Free Restricted

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Difference between Heba and Heba-bil-Awaz:
Heba Deed: Dead of Muslim gift without receiving any consideration and handover the actual
possession of gift is required for enforcement.
Heba-bil-Awaz: Dead of Muslim gift with receiving some (religious books or things)
consideration and handover the actual possession of gift is not required for enforcement.

Appellate Division
High Court Division

In Metropolitan Area: Other than Metropolitan Area:

Metropolitan Session Judge Session Judge
Additional Metropolitan Session Judge Additional Session Judge
Joint Metropolitan Session Judge Joint Session Judge
Chief Metropolitan Magistrate Chief Judicial Magistrate
Additional Chief Metropolitan Additional Chief Judicial Magistrate
Magistrate Magistrate 1st Class -5y & 10000/-
Metropolitan Magistrate (1st Class) Magistrate 2nd Class -3y & 5000/-
Magistrate 3rd Class-2y & 3000/-

Difference between void and voidable contract:

Void contracts are unenforceable by law. Even if one party breaches the agreement, you cannot
recover anything because essentially there was no valid contract. Some examples of void
contracts include:
• Contracts involving an illegal subject matter such as gambling, prostitution, or
committing a crime.
• Contracts entered into by someone not mentally competent (mental illness or minors).
• Contracts that require performing something impossible or depends on an impossible
event happening.
• Contracts that are against public policy because they are too unfair.
• Contracts that restrain certain activities (right to choose who to marry, restraining legal
proceedings, the right to work for a living, etc.).

Voidable contracts are valid agreements, but one or both of the parties to the contract can void
the contract at any time. As a result, you may not be able to enforce a voidable contract:

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 • Contracts entered into when one party was a minor. (The law often treats minors as
though they do not have the capacity to enter a contract. As a result, a minor can walk
away from a contract at any time.)
• Contracts where one party was forced or tricked into entering it.
• Contracts entered when one party was incapacitated (drunk, insane, delusional).

Delegated legislation:
Delegated legislation is recognized by article 65(1) of the Bangladesh Constitution- “Nothing
shall prevent parliament from delegating to any person or authority, by Act of parliament, power
to make orders, rules, regulations, by-laws or other instruments having legislative effect”.
In conclusion it can be said that, delegated legislation refers to all law making which takes place
outside the legislature. Delegated legislation may also be expressed as rules, regulations,
notification, bye-law, scheme and direction. These terminologies are confusing because different
words are used for the same thing and same words are used for different things.
1. Rule: The term ‘rule’ is defined in the General Clauses Act, 1897 as a rule made in exercise of
power conferred by any enactment. It also includes a regulation made as rule under any enactment.
These rules may be applicable to a particular individual or to the general public.
2. Regulation: This term is not confined to delegated legislation only. It means an instrument by
which decision, orders and acts of the government are made known to the public. But in the sphere
of delegated legislation, the term relates to the situation where power is given to fix the date for
the enforcement of an Act or to grant exemption from the Act or to fix prices etc.
3. Order: This term is used to cover various forms of legislative and quasi-judicial decisions.
Orders may be specific or general. The specific orders refer to administrative actions while the
general order refers to administrative rule-making.
4. Bye-laws: The term has been used to mean the rules made by autonomous bodies.
5. Directions: The term ‘direction’ is an expression of administrative rule making under the
authority of law or rules or orders made there under. These may be recommendatory or mandatory.
If mandatory, they have the force of law.
6. Scheme: The term ‘refers’ to a situation where the law authorizes the administrative agency to
lay down a frame work within which the detailed administrative action is to proceed.

Statutory law: Statutory law or statute law is written law passed by a body of legislature. This is
as opposed to oral or customary law; or regulatory law promulgated by the executive or common
law of the judiciary.[1] Statutes may originate with national, state legislatures or local
municipalities.

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What is the Difference Between Civil vs Criminal Law?
Criminal law relates to the offences that negatively affect society as a whole, rather than just
one person. Criminal laws are put in place by Parliament to prevent breaches of conduct which
they deem as harmful towards the whole of society.
If a person breaches criminal law, then they will face criminal prosecution by the state. Criminal
proceedings are brought by the Crown Prosecution Service and will be heard in Magistrates’
Court or the Crown Court. If you are then convicted, you may receive a prison sentence or a
community order.
The standard of proof for criminal law cases is “beyond a reasonable doubt” or “certain so you
can be sure.” These both mean the same thing.
Examples of criminal offences include: Murder, Manslaughter, Fraud, Assault, Sexual Offences,
Burglary
Civil law is more concerned with cases between individual people where one person commits an
offence which is harmful towards another person, their rights or their property. Civil law also
settles disputes between individuals and organisations.
If you are convicted of a civil offence, you are not likely to be sent to prison, but most often will
become liable for compensation.
The standard of proof for civil law cases is “the balance of probabilities.” However, certain civil
offences such as disciplinary proceedings for solicitor misconduct can use the higher standard of
“beyond reasonable doubt.”
Examples of civil offences include: Personal injury, Breaches of contract, Employment tribunals,
Negligence,
What Are the Differences?
The most noticeable difference between the two systems is what the aim of the cases seems to
be. In Civil law, the aim is to put the person who has suffered harm back in the position they
were in before the harm occurred – in other words, the aim is to set right an unfair situation.
On the other hand, Criminal Law has the aim of punishing the offender in a way that is designed
to prevent them from carrying out the offence again. Moreover, the existence of laws preventing
crime has a more general aim of creating a stable and law-abiding society.

Impact of doctrine of frustration upon COVID-19 Situation:

A force majeure event means an extraordinary event which is beyond the control of the contracting
parties. Examples include, inter alia, acts of God (like a natural calamity) or events such as a war,
strike, riots etc. In simple terms, a successful invocation of a force majeure clause generally
relieves the parties from their respective contractual obligation and/or liability.

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Under English Common Law, the applicability of force majeure is purely contractual. It is
understood that a generalised doctrine of force majeure does not exist and it is up to the parties to
define the events as to what constitutes force majeure events. In Bangladesh, the position is similar
as there is no direct statute that directly governs the doctrine of force majeure or gives effect to it
in express terms. Since the doctrine of force majeure does not have any direct statutory basis under
the laws of Bangladesh, its reliance is based primarily on the parties' agreement and the respective
terms of the contract entered into between the contracting parties.

All contracts, which are governed by Bangladeshi law, are regulated by the Contract Act 1872 (the
"Act of 1872"). The doctrine of frustration is enshrined in Section 56 of the Act of 1872 which
provides that a contract becomes void when, inter alia, it becomes impossible to perform. So, if
the contract becomes impossible to perform for any reason whatsoever, it shall be treated as void
under the laws of Bangladesh, provided that the defaulting party did not know or could not have
known that the contract would be so frustrated. The effect of a void contract is that it cannot be
enforced by law and the parties are relieved from their respective obligations.
It is clear that, to attract the doctrine of frustration, the performance of the contract must become
absolutely impossible due to the happening of some unforeseen event. This was clearly held by
the Supreme Court of Bangladesh where it stated that to attract the doctrine of frustration of
contract, the performance of the contract must become absolutely impossible due to the event
(subsequent to the making of the agreement) which are not in contemplation of the parties and
which could not be foreseen with reasonable diligence.
Common Law:
In law, common law (also known as judicial precedent or judge-made law, or case law) is the body
of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written
opinions.[1][2][3][4][5][6] The defining characteristic of “common law” is that it arises as
precedent. In cases where the parties disagree on what the law is, a common law court looks to
past precedential decisions of relevant courts, and synthesizes the principles of those past cases as
applicable to the current facts. If a similar dispute has been resolved in the past, the court is usually
bound to follow the reasoning used in the prior decision (a principle known as stare decisis). If,
however, the court finds that the current dispute is fundamentally distinct from all previous cases
(called a "matter of first impression"), and legislative statutes are either silent or ambiguous on the
question, judges have the authority and duty to resolve the issue (one party or the other has to win,
and on disagreements of law, judges make that decision).

Tort Law:
A tort, in common law jurisdiction, is a civil wrong that causes a claimant to suffer loss or harm,
resulting in legal liability for the person who commits the tortious act. It can include intentional

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infliction of emotional distress, negligence, financial losses, injuries, invasion of privacy, and
many other things.
Tort law involves claims in an action seeking to obtain a private civil remedy, typically money
damages. Tort claims may be compared to criminal law, which deals with criminal wrongs that
are punishable by the state. A wrongful act, such as an assault and battery, may result in both a
civil lawsuit and a criminal prosecution. Tort law may also be contrasted with contract law,
which also provides civil remedies after breach of duty that arises from a contract; but whereas
the contractual obligation is one agreed to by the parties, obligations in both tort and criminal
law are more fundamental and are imposed regardless of whether the parties have a contract. In
both contract and tort, successful claimants must show that they have suffered foreseeable loss or
harm as a direct result of the breach of duty.

• Tort law is that branch of the law that deals with civil law, including law suits but
excluding issues involving contracts.
• Tort law is considered to be a form of restorative justice since it seeks to remedy losses or
injury with monetary compensation.
• In general tort law falls into three categories: those complaints dealing with negligence;
intentional harm; and unintentional but non-negligent acts known as strict liability.

Principle of fiduciary:
A fiduciary is a person in a position of financial trust. Attorneys, accountants, trust officers,
pension plan trustees, stockbrokers and insurance agents are all considered fiduciaries. Insurance
agents and brokers may owe a fiduciary duty to both to the companies they represent and to the
insurance buying public. Agents who make recommendations to clients have an obligation to be
knowledgeable about the features and provisions of the products they sell, as well as the prudent
use of these products. Agents also must take the time to become acquainted with the client's
financial needs, situation and objectives. Agents collect premiums on behalf of the insurers they
represent, so they also have a fiduciary duty to submit those monies to the insurer promptly.
Insurance agents and brokers voluntarily accept this fiduciary responsibility and implicitly agree
to carry out that duty in good faith. That has been interpreted by the courts to mean that
fiduciaries must act reasonably to avoid negligence and to not favor anyone else's interest
(including their own) over that of their clients or the companies that appointed them.
Fiduciaries owe their principals (the person they represent):
Utmost Care. One standard applied to fiduciaries is the "prudent man rule", which states that the
fiduciary should behave as a "prudent person" would under the same circumstances. This can be
a very vague standard, but it is one that courts have relied on over the years. Professionals are
usually held to a higher standard of conduct — to exercise "utmost care". This higher standard is
warranted because professionals are assumed to be more knowledgeable and experienced than an

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ordinary prudent person. One can argue that clients seek out and are willing to pay for
professional advice precisely because of the added knowledge and experience the professional
brings to the decision-making process — and therefore should be held to that higher standard.
• Integrity — this applies to the fiduciary's soundness of moral principle and character: the
agent must act with fidelity to the principal's interest and with complete honesty.
• Honesty and Duty of Full Disclosure of all material facts, either known, within the
knowledge of or reasonably discoverable by the agent which could influence in any way
the principal's decisions, actions or willingness to enter into a transaction.
• Loyalty — An obligation to refrain from acquiring any interest adverse to that of a
principal without full and complete disclosure of all material facts and obtaining the
principal's informed consent. This precludes the agent from personally benefiting from
secret profits, competing with the principal or obtaining an advantage from the agency for
personal benefit of any kind.
• Duty of Good Faith — includes total truthfulness, absolute integrity and total fidelity to
the principal's interest. The duty of good faith prohibits taking advantage of the principal
through the slightest misrepresentation, concealment, threat or adverse pressure of any
kind.
In the case of conflicting interests, the agent must disclose the "dual agency" (acting for two
parties at the same time) or risk being accused of fraud from either or both principals. Most
brokers are compensated by commissions. This, in itself, creates a difficulty since there is an
inherent conflict of interest. It is common knowledge to most insurance purchasers that agents
and brokers earn a sales commission, which may mitigate the conflict somewhat.
In Moss v Appel, a broker helped a small business set up a pension funded with an annuity
contract, and the broker was also hired to handle administrative paperwork for the pension plan.
The broker received notice from the annuity company that it was in seeking additional capital to
remain in business, but he did not alert the clients to that notice. The annuity company later became
insolvent. The courts ruled that the broker owed a fiduciary responsibility to his clients based on
the sale of the annuity and the ongoing consulting/administrative contract. As the court noted:
"It is undisputed that [the broker] was acting as an insurance broker, not an insurance agent
employed by a particular company, when he sold the plaintiffs the annuity." Presumably that
distinction means that the broker should have placed the client's interests above any duty he may
have felt to keep the contract in force with the troubled annuity company (even if it was the
company that compensated him for the sale). In this case, there was a contract with the clients to
administer the plan. The court did not indicate how that continuing relationship affected its ruling
— or for how long after the sale a broker (in the absence of a continuing relationship) owes that
duty to his clients.

Formation of Contract:
Firstly, offer and acceptance where one party makes an offer for an arrangement that another
person with his free consent accepts then and offer and acceptance happens and this can be
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called ‘ad idem’ means a meeting of two or more parties. Whereas an offer means the making
of a proposal and acceptance is a final and unqualified of assent to the terms of an offer. As
per the Contract Act, the offer must be certain, definite, it should be communicated to the
offeree and unambiguous and the acceptance must be absolute and expressed.
Secondly, the capacity of parties section 11 of the Contract Act, 1872 states that a minor
person, unsound person and if any person is disqualified by any other law which he is subject
is incapable of doing any contract. Therefore a contract by any of those people is absolutely
void ab initio also in the case of MohoriBibee vs. DharmodasGhose (1903) 30 Cal(P.C) held
that a contract by minor is absolute void not voidable on the basis of section 10,11,0183 and
184 of the Contract Act. Therefore, it can be said that if an agreement is made between the
parties who are competent to contract then that agreement will become a valid contract.
Thirdly, Genuine and Free Consent where two or more person agrees upon the same thing
in the same sense is said to be free constant. Section 14 of the Contract Act, 1872 defined the
free consent where the consent is given without coercion, undue influence, fraud, and
mistake is called to be free consent. It is to be said that where a person says that the offeree
entered into a contract with his free will but the offeree refuses of such than the burden of
proof lies to the offeror to prove also can be seen in the case of SrimatiBidhumukhiBassaya
vs. SrimatiSaralaSundariDassya& another 6 DLR 97.
Fourthly, Lawful Consideration, if something in return is given or obtained that called
Consideration. In every contract, the agreement must be supported by consideration and it
must be lawful and real. According to section 2 of the Contract Act 1872 consideration may
be classified into three types they are past consideration, present consideration, and future
consideration.
Fifthly, Lawful Object a contract is not like only mutual assent of competent parties but also
have a lawful object. Therefore the object of a contract should be lawful and must not be
illegal or doing with immoral purpose or opposed to public policy. Where the object of a
contract is not lawful then the contract is void. In the case of Susmitra Devi vs.
SulekhaKundu A.I.R (1976) Cal. 197 held that if the object of which is immoral than the
contract is void and it is upon the consideration of the court to decide which is unlawful and
immoral.
Lastly, Legal Formalities, the legal formalities for a particular contract is it must be written
along registration and they must be followed. It is to be mentioned that written contract is
essential in order to effect of any sale, lease, mortgage, gift of immovable property etc and
Registration is also required in such cases. For this, the legal formalities should be strictly
followed as relevant legislation of those.
In concluding remark it can be said that the above-mentioned conditions or elements should
be followed for entering into any valid contract. The validity of a contract is not necessary
only for enforcement but also the court will not interfere or will give the right to any party
where the contract is not valid.

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Difference between wager and insurance contract:
1. ENFORCEABLE
A contract of insurance is legally enforceable, a wager is not.
2. INSURABLE INTEREST
There must be insurable interest in the subject matter under a contract of insurance. This is
not necessary for a wager, where the interest is limited usually to the stake won or lost.
3. UTMOST GOOD FAITH
A contract of insurance requires the parties to observe utmost good faith but in case of a
wagering contract, good faith need not be observed.
4. PREMIUM
In case of a wagering contract, no consideration by way of premium is given by the insured
to the insurer, whereas in the case of an insurance contract, there is consideration due to the
presence of insurable interest.
5. SOCIAL APPROVAL
Insurance contracts have the general approval of the society and are encouraged as they
benefit the community as a whole, while wagering contracts are not approved by the society.
6. INDEMNITY
Indemnity and nothing more than indemnity is obtained under a policy of insurance other
than life or persona accident; this does not enter into a wager. The sum paid under a contract
of insurance represents the actual loss sustained; he who wins a bet has his stake returned,
together with some addition.
7. HAPPENING OF EVENT
An insured event (except death) against the risk of which the insurance is taken may or may
not take place at all. The wagering event is bound to happen.
8. RISK
Insurance is meant for protection, if the risk which is already there, materializes. But the risk
is oriented in wagering contracts.

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