Modernise companies act for ease of doing business

The government should update the companies act to ensure a business-friendly atmosphere in Bangladesh, speakers told a seminar yesterday.

“A comprehensive companies act should be formulated to ensure transparency and accountability,” said one of the speakers, Ajit Kumar Paul, additional secretary (financial institution division) to the finance ministry.

He said the government was working hard to bring changes to the act to develop the economy further.

“We should plan for a company law keeping an eye on the changing business scenario of the country. It should also reduce the cost of doing business,” he said. 

The Institute of Chartered Accountants of Bangladesh (ICAB) organised the seminar titled “Modernisation of the Companies Act for Ease of doing Business” on its premises in Dhaka.

Under the Companies Act, 1994, companies are not allowed to buy its own shares or provide financial assistance to make such purchases.

The government is going to amend the act considering the changes in the global economic system and to attract more foreign direct investment, said Commerce Secretary Shubhashish Bose.

He said the Office of the Registrar of Joint Stock Companies & Firms (RJSC) would be strengthened and the problems in the share transferring process will be addressed in the new act.

The ICAB said modernisation of the companies act was required to ensure a business-friendly atmosphere in the country.

ICAB President Dewan Nurul Islam urged the government to put more importance in accounting and auditing standards and in ensuring that publicly listed companies appoint a company secretary.

The institute called for full automation of the RJSC and easing of share transferring process and the taxation policy.

It recommended better coordination among the RJSC, Bangladesh Bank, the Bangladesh Securities and Exchange Commission, the National Board of Revenue, Bangladesh Investment Development Authority, city corporations and other regulators concerned.

Speakers said facilitating electronic communications and modern technology in the companies act would be supportive for the rise of small and medium enterprises (SME).

The keynote paper presented at the seminar said there should be a mandatory requirement for publicly listed companies to appoint a company secretary so that investors can see how companies maintain corporate documents.

It recommended recognition and accommodation of international standards already in place for accounting, financial reporting and auditing.

Other recommendations include introduction of corporate governance to establish orderly and efficient management of companies and provision for enforcement of contracts and taking punitive measures against wrongdoings or manipulations.

Provision for enforcement of contracts and taking punitive measures against manipulations will boost the confidence of investors, enable the right to get recovery and increase local and foreign investment, according to the paper.

Humayun Kabir, a former president of the ICAB, and Mahamud Hosain, vice-president, also spoke.