Bill passed giving go-ahead to one-man company

The parliament yesterday passed Companies (2nd Amendment) Bill, 2020, keeping a provision related to the formation of one-man companies as part of efforts to boost investment and improve in the global ease of doing business index.

Commerce Minister Tipu Munshi placed the bill which was passed by voice vote.

The government hopes that this bill, once comes out as a law, will be able to attract huge foreign investment in the country, the minister said while placing the bill.

In the one-man companies, owner and shareholder would be a single entity, according to the bill.

A separate part with provisions over registration, operation and management of one-man companies were incorporated in the bill.

In case of winding up of a company, the repayment of debts of the company shall be given priority, says the bill. Another provision for an online registration system has been kept for companies.

According to the bill, the one-man company has to have a paid-up capital of at least Tk 25 lakh to a maximum of Tk 5 crore. The minimum turnover of that company in the immediate past year should be Tk 1 crore to Tk 50 crore.

If the paid-up capital and turnover exceeds the limit, then the one-man company can be transformed to a private limited company or in some cases to a public limited company.

A one-man company has to hold at least one meeting of board of directors every year.

If the directors and the main person of this kind of one-man company is one person then it will get relief in holding board meetings and decision-making processes.

The nominated person will get all the shares if that one person dies, according to the bill.

The proposed law mentioned that for handing over the shares of this kind of company, the presence of the particular person signing the signature on the handover papers through the commission has to be ensured.

As per the proposed law, the notice time for holding a board meeting was increased to a 21-day period from the existing 14-day.

There was a demand from the foreign investors to extend the notice time to 21 days.

The government has got a proposal from different quarters for giving recognition to one-man companies to attract huge investment.