Two Rival Boards, One Institution: Who Can Sign Contracts and Operate Bank Accounts?
Summary. Two minutes of governance theatre can become two months of operational paralysis. When rival boards claim the same Bangladesh institution, the immediate question is not which faction has the louder press release. It is which constitution, meeting, filing, mandate and court process can lawfully move money and bind the organisation. The answer depends first on the institution’s legal form, then on its constitutional rules and the evidence of appointment. A bank may suspend disputed instructions without deciding the merits. A donor may pause a grant. Employees may remain owed wages while each side insists it is the only lawful employer. This article sets out a source-led route through that risk as at 23 September 2026: preserve the status quo, identify the operative authority, protect essential services, and obtain a targeted order or negotiated protocol where the documents do not yet resolve the dispute.
The commercial problem is operational, not ceremonial
A contested election or attempted removal rarely stays inside the minute book. It reaches the organisation’s bank accounts, payroll file, tax and regulatory submissions, donor certifications, premises, email systems, grant portals and every contract that needs a signature. Counterparties then face an uncomfortable choice: follow one board, follow the other, or do nothing. Each choice carries risk if the signatory later proves unauthorised.
The practical issue is therefore not whether one group calls itself the “executive committee” or has possession of the seal. It is whether that group can demonstrate a continuous chain of authority from the institution’s legal form and governing instrument to the act now required. That chain may include valid membership, notice of meeting, quorum, voting entitlement, election or removal mechanics, acceptance of office, regulator filings and a bank mandate. A registry entry is important evidence, but it is not a universal substitute for the constitution or a court’s determination of a disputed election.
Bangladesh has no single “rival board” statute that answers every case. A society registered with the Registrar of Joint Stock Companies and Firms (RJSC), a company limited by guarantee, a trade organisation, a voluntary social welfare agency regulated by the Department of Social Services, and an NGO holding foreign-grant approvals may face different statutory controls. The first discipline is classification. The second is document control. The third is an immediate operational plan that does not prejudge the merits.
The legal framework and administrative practice discussed here were checked against the sources identified below as at 23 September 2026. The assignment’s suggestion that a September 2026 change has automatically rewritten board authority is not supported by the primary material opened for this article. Nor does this article assume that any new data-protection statute, political announcement or regulator notice silently changes the rules for corporate or association signatories. Any later gazette, court order, regulator direction or entity-specific constitution must be checked before action.
Start with the institution’s legal form
A society is governed by its filed constitution and governing body
For a society registered under the Societies Registration Act, 1860, the memorandum must state the society’s name, objects and the names, addresses and occupations of the governors, council, directors, committee or other governing body entrusted with management. A certified copy of the rules and regulations is filed with the memorandum.[1] The constitution is not background reading. It is the first place to test who may call a general meeting, who may vote, how office bearers are elected or removed, what constitutes quorum, and who may operate an account.
The Act also requires an annual list of the names, addresses and occupations of the governing body then entrusted with management to be filed with the Registrar within the statutory period after the annual general meeting, or in January where the rules do not provide for an annual general meeting.[2] That filing is a powerful operational checkpoint. It is not, on its own, a complete adjudication of every challenge. A purported annual list filed after a defective meeting may be disputed; an old list may not reflect a valid later election. The point is to obtain the historical record and compare it with the constitution, minutes and actual acts.
The same Act provides that a registered society may sue or be sued in the name of the president, chairman, principal secretary or trustees as determined by its rules. If the rules do not determine the position, the governing body may appoint a person for the occasion.[3] This matters when a rival secretary signs a plaint, a lawyer’s authority or a settlement. The question is not simply whether the person has used a familiar title. It is whether the rules and a valid decision support that procedural act.
RJSC’s own FAQ confirms that it administers societies under the Societies Registration Act, 1860 and describes returns as including annual returns and returns for changes in the entity. It also states that a person may apply for certified copies of historical entity records.[4] In a dispute, certified copies should be treated as evidence in a chain, not as a shortcut around a contested constitutional process.
Companies, trade organisations and guarantee companies have a different architecture
If the institution is a company, including a company limited by guarantee, the Companies Act, 1994 and the memorandum and articles provide the starting point. The statute contains distinct rules on meetings, minutes, directors, contracts, registers, accounts and filings.[5] A company board’s apparent authority cannot be assumed merely because a person was historically a director. The relevant questions may include whether the appointment or removal was valid, whether a meeting was properly convened, whether a resolution was passed, whether a filing was made, and whether the articles impose additional signing controls.
A trade organisation can also be administered through the Companies Act framework while having licensing or sector-specific requirements. The RJSC FAQ separately lists trade organisations among the entities it handles and identifies the need for constitutional documents and particulars of directors or managers.[4] The operational investigation should therefore ask both what RJSC records show and what the Ministry of Commerce or another competent authority requires for that category. A bank, grant-maker or counterparty may ask for more than a registry extract because its own risk controls do not disappear when an internal election becomes contested.
For a company, contracts signed during a dispute can create difficult questions about the company’s obligations, the signatory’s authority, and the counterparty’s notice of the irregularity. The safest commercial response is not to announce that every rival-board contract is void. It is to identify the transaction, the constitutional approval required, the counterparty’s knowledge, the value and urgency, and whether interim relief or a ratification can address the risk.
A voluntary social welfare agency may face direct regulatory intervention
The Voluntary Social Welfare Agencies (Registration and Control) Ordinance, 1961 defines a “governing body” as the council, committee, trustees or other body entrusted by the agency’s constitution with executive functions and management.[6] That definition reinforces the central proposition: the constitution and the appointment process matter.
The Ordinance requires registered agencies to maintain audited accounts, submit annual reports and audited accounts, pay money into a separate account in the agency’s name at a bank approved by the Registration Authority, and furnish information about accounts and records when required.[7] A private faction cannot treat a welfare agency’s funds as a personal war chest. Its access to funds must be tied to the agency’s lawful governing structure and its regulatory obligations.
The Registration Authority can suspend a governing body after inquiry for irregularities in funds, maladministration or non-compliance. It may then appoint an administrator or caretaker body, with the authority and powers of the governing body under the constitution. The suspension order is placed before a government-constituted board, which can order reinstatement or dissolution and reconstitution, subject to the statutory appeal structure.[8] That is materially different from a society dispute in which members may need to use civil proceedings to establish or restrain authority. A regulator’s intervention must be identified quickly and not confused with a faction’s self-declared caretaker arrangement.
NGO registration does not make every board dispute an NGO Affairs Bureau decision
An organisation may have an NGO Affairs Bureau registration, foreign-donation approval or project clearance in addition to another legal form. The Bureau’s official site publishes registration, renewal, project proposal and foreign-expert clearance services and notices.[9] Those regulatory records may be decisive for grant administration, but they do not automatically answer every internal question about an election or contract. The organisation’s constituting statute, certificate, constitution, governing body and applicable project terms still require analysis.
The practical distinction is important. A donor may require the signatory to be the person recognised in the latest approved board record. The Bureau may require a particular filing, approval or project document before foreign funds move. A court may be asked to preserve funds or records while the internal dispute is tried. These are connected tracks, not interchangeable ones.
Build an authority matrix before anyone signs
The fastest way to turn a noisy dispute into a decision is to prepare a document-and-authority matrix. It should show each disputed act, the proposed signatory, the claimed source of power, the evidence, the opposing objection and the immediate consequence if the act is delayed.
| Decision or asset | Authority to test | Immediate evidence | Risk if mishandled |
|---|---|---|---|
| Bank withdrawals and online transfers | Current account mandate, constitutional signing rule, valid board resolution and bank KYC | Account-opening file, mandate cards, resolutions, specimen signatures, bank correspondence | Unauthorised debit, bank refusal, personal exposure and recovery dispute |
| Payroll and statutory payments | Employment contracts, approved budget, payroll controls and lawful operational signatory | Payroll register, prior approvals, tax and social records, payment history | Wage claims, staff departures and loss of essential services |
| Grant drawdown | Grant agreement, approved project documents and regulator or donor conditions | Award letter, project approval, prior reports and authorised-signatory schedule | Funding suspension, default, audit finding or repayment demand |
| New contracts | Constitution, delegation limits, board resolution and counterparty notice | Draft, procurement record, conflict declaration and signing policy | Non-binding or contested commitment; counterparty claim |
| Litigation and settlement | Rules on who sues or is sued, board authority and lawyer appointment | Certified constitutional documents, minutes, power of attorney and court filings | Procedural challenge, missed deadline or compromised claim |
| Records and digital systems | Custody rules, employment authority and preservation duties | Registers, backups, access logs and handover record | Spoliation allegation, data loss and operational sabotage |
The matrix should separate authority to act from authority to access information. A former treasurer may not be entitled to transfer funds, but the institution may still need a controlled handover of accounting records. A rival secretary may not be able to approve a new contract, but a court or agreed protocol may allow both sides to inspect the existing contract file. Conflating these issues encourages overreaction.
It should also separate ordinary-course preservation from new discretionary commitments. Paying an undisputed salary or a utility bill is not the same as buying a new asset, hiring a related party, settling litigation or moving grant money to a new account. A sensible interim protocol can allow essential expenses within a verified budget while placing extraordinary transactions on hold or subjecting them to two-party approval.
Banks do not have to choose a faction on a handshake
A bank’s first concern is whether an instruction matches its account mandate and customer-identification records. Bangladesh Bank’s AML/CFT materials emphasise customer due diligence and account controls, while its official regulations index collects the relevant banking, AML and customer-service framework.[10] Those materials do not create a general rule that a bank must decide an internal election dispute. They explain why a bank may seek updated documents, pause an instruction, escalate to compliance or require a court order when the customer’s authority is genuinely contested.
That is why sending two contradictory board resolutions to a branch is not a strategy. It is a way to create a compliance impasse. The institution should instead provide a controlled pack: certificate and constitutional documents, the last accepted mandate, the meeting notice, attendance and quorum evidence, minutes, resolutions, filings, any regulator decision, and a short chronology identifying the precise disputed act. The pack should distinguish documents accepted by the institution from documents asserted by one faction.
A bank may maintain the last undisputed mandate pending clarification, impose dual controls, decline disputed withdrawals, or require a court or regulator direction. The precise response is fact- and bank-policy-dependent. A bank letter saying that it will not act on competing instructions is not necessarily a ruling on which board is lawful. Nor does a branch’s informal willingness to process a cheque prove that the signatory had substantive authority.
The immediate objective should be to keep money safe and essential payments moving. Where the bank will not release funds for payroll or utilities, the organisation should present evidence of the necessity and propose a narrow protocol rather than demand an unlimited mandate for one faction. The protocol might identify a fixed account, a capped budget, dual signatories from agreed nominees, direct payment to employees or suppliers, and a short reporting cycle. It should reserve the parties’ merits positions.
Protect contracts, grants and payroll without prejudging the merits
Existing contracts need a continuity decision
A counterparty should not be left to guess which board can issue a purchase order, certify performance or approve a variation. The organisation should notify counterparties of the dispute in neutral terms, state what remains undisputed, identify any interim contact channel and request that no material change be made without written confirmation under the agreed protocol or a court order. The notice should avoid defamatory allegations and avoid declaring the opposing board criminal or nonexistent without evidence.
For a contract requiring immediate performance, the parties can consider a short standstill, escrow, dual-signature certificate or narrowly framed interim authority. A counterparty is more likely to cooperate when it receives a coherent record and a clear answer to the commercial question: who can approve this particular act, by what evidence, for how long, and with what liability allocation?
Grant money is not ordinary cash
A grant agreement may make the donor’s approval of a change in governing body, bank account, authorised signatory, project director or budget a condition of drawdown. A rival board should not assume that a domestic filing automatically satisfies a donor’s contract. Conversely, a donor should not treat a disputed announcement as proof that one board has won.
The operational response is to preserve grant funds, notify the donor and relevant authority where the agreement or law requires, and propose a monitored arrangement. That may include a frozen discretionary budget, direct payment of project-critical suppliers, independent sign-off, a jointly appointed finance officer or a temporary administrator recognised by the competent authority. The arrangement should preserve audit trails and avoid creating an implied admission about the underlying governance merits.
Payroll has priority as a continuity issue, not as a factional prize
Employees should not become collateral. The payroll file should be secured, the undisputed employment relationship documented, and essential wages and statutory remittances prioritised. Where an account freeze makes payment impossible, the organisation should ask the bank and, if necessary, the court or regulator for a tightly defined payment route. The request should be supported by payroll schedules, contracts, prior payment practice and evidence that the proposed payments are ordinary-course obligations.
This is also the point to check who is named as employer in contracts and registrations. A board dispute does not automatically change the employer. A rival board’s attempt to terminate staff or change payroll access may create separate employment and fiduciary risks. The response should preserve records and avoid retaliatory dismissals while authority is unresolved.
The court route is about preservation first
Bangladesh’s Code of Civil Procedure allows a court, in order to prevent the ends of justice from being defeated, to grant a temporary injunction and make other interlocutory orders that appear just and convenient.[11] The Specific Relief Act describes preventive relief as injunction, temporary or perpetual, and contains the statutory framework for that relief.[12] These provisions do not guarantee an injunction for every disputed election. They provide procedural tools whose application depends on pleadings, evidence, jurisdiction, balance of convenience, urgency and the relief sought.
A well-framed application should ask for the smallest order that prevents irreversible harm. Examples may include restraining either faction from changing the bank mandate, transferring assets, removing records, entering a specified high-value contract, altering a regulator filing, or representing that it alone controls the institution pending determination. Another application may seek a neutral mechanism for essential payments. The more the requested order looks like a final victory disguised as interim relief, the more difficult the proportionality question may become.
The evidential package should normally include the constitution, certificate, historical filings, membership register, notices, attendance records, minutes, ballot papers or election materials, resignations or removal notices, correspondence with the bank and regulators, transaction history, payroll exposure, grant terms, and a chronology of threatened acts. Screenshots of social media posts can be relevant to urgency, but they are not a substitute for the underlying records.
The applicant should identify the legal interest it seeks to protect. That may be the institution’s property, members’ contractual or statutory rights, the right to a properly constituted governing body, the integrity of an ongoing project, or a counterparty’s contractual position. It should also address undertakings, damages and the risk that an injunction obtained on insufficient grounds may cause loss. The Code expressly contemplates compensation where arrest, attachment or a temporary injunction was sought on insufficient grounds or without reasonable grounds.[11] Urgency is not a licence to overstate.
Writ or civil suit?
A dispute involving a private association will often require a civil analysis. A public-authority decision, statutory regulator action or failure to perform a public duty may raise a constitutional or writ question. The label should follow the source of power and the relief, not the applicant’s preferred forum. If an authority has suspended a governing body under a statutory power, the statutory appeal and judicial-review limits must be checked together. If members challenge a private election under the constitution, a civil remedy may be central.
TRW’s Dispute Resolution practice page correctly frames the starting point as the operative documents, immediate issue, people or entities involved and jurisdictions connected with the dispute. Its Banking & Finance Litigation page also emphasises account, payment, regulatory and communications records when a finance dispute becomes contentious. Those are useful practical disciplines, not a promise that any one route will succeed.
An interim governance protocol can be better than a victory speech
Litigation can determine authority, but it may not pay Friday’s salaries. A protocol can preserve the institution while the merits are resolved. It should be written, time-limited and capable of audit. It should state that it is without prejudice to each side’s position and should identify who may do what.
A workable protocol commonly covers five areas. First, banking: one named account, dual approvals, payment caps, no change of mandate and delivery of monthly statements to both sides. Second, ordinary expenses: payroll, rent, utilities, insurance, tax, audit and safety obligations, with a defined budget. Third, new commitments: no related-party transaction, asset disposal, borrowing, settlement, senior appointment or grant variation without agreed approval. Fourth, records: mirrored access to ledgers, minutes, registers, contract files and digital backups, with an independent custodian if trust has collapsed. Fifth, communications: one neutral notice to staff, donors, banks and counterparties explaining the temporary process and the next review date.
The protocol must not accidentally create a new board. It should identify the authority under which it operates, the consent of the parties or the court or regulator order supporting it, the expiry trigger and the mechanism for renewal. If no agreement is possible, the application should ask for a narrow court-directed mechanism rather than leaving the organisation to drift.
A disciplined 72-hour response
The first 24 hours should be used to stop irreversible acts. Notify the bank’s appropriate office, preserve the account mandate and online access logs, suspend non-essential payments, secure the seal and digital systems, and issue a document-preservation instruction. Do not destroy, rewrite or backdate minutes. Do not change passwords in a way that erases evidence. Do not circulate accusations that could create defamation or employment exposure.
The next 24 hours should establish the record. Obtain certified registry copies, the constitution, the last undisputed minutes and resolutions, meeting notices, membership and attendance materials, regulator and donor records, account statements, payroll schedules and all competing signatory documents. Create a single chronology with document references. Identify deadlines: payroll, grant reporting, court limitation, contract notice, audit, tax and regulator filings.
The final 24 hours should produce a decision tree. If the constitutional record clearly supports one board and no contrary order exists, prepare a controlled request to the bank and counterparties. If the record is genuinely contested, propose a standstill and interim protocol. If funds, records or a critical contract are at immediate risk, prepare a targeted injunction application. If a regulator has acted, check the statutory appeal and response route before filing elsewhere. If the dispute concerns a company, confirm RJSC filings and articles. If it concerns a society or social welfare agency, confirm the relevant Act, authority and constitution. If it concerns foreign grants, notify the donor and NGO Affairs Bureau where required.
What to do next
A rival-board dispute should be treated as a live control problem with a legal endpoint, not as a contest of confidence. Identify the institution’s legal form. Match each act to the constitution, the latest reliable record and the applicable authority. Preserve money, payroll, grants and records. Give the bank and counterparties a verifiable pack. Use a narrow interim protocol or court order where the merits cannot be resolved quickly.
For a Bangladesh-related governance or operational dispute, start with the verified TRW contact route and provide only non-confidential context until an appropriate engagement is confirmed. TRW’s corporate law and business formation resource may also help frame the entity-classification and governance questions, but it is not a substitute for reviewing the institution’s own constitution, filings, contracts and current procedural position.
Frequently asked questions
1. Can a bank choose one of two rival boards in Bangladesh?
A bank may require evidence, maintain the last undisputed mandate, restrict disputed transactions or seek a court or regulator direction. It should not be assumed that a branch employee’s informal acceptance proves which faction is legally entitled. The account mandate, customer records, constitutional documents, resolutions and any court or regulatory order must be considered together.
2. Does the latest RJSC filing automatically prove which board is valid?
No. For a society, the Societies Registration Act requires an annual governing-body list, and RJSC provides access to historical records. Those records are important evidence. They do not necessarily decide a challenge to notice, membership, quorum, election procedure or a later court or regulatory order. The filing must be tested against the constitution and the events that produced it.
3. Can one rival board sign a new contract while the dispute is pending?
It may expose the institution and the counterparty to avoidable risk. The answer depends on the legal form, constitution, delegation, resolution, urgency and the counterparty’s knowledge of the dispute. Existing essential obligations should be separated from new discretionary commitments. A standstill, dual approval or targeted court order may be safer than unilateral signing.
4. Can an injunction stop a rival board operating an account?
A court may grant temporary or other interlocutory relief where the statutory and procedural requirements are met, but an injunction is not automatic. The applicant should show the legal interest, threatened harm, urgency, evidence and why the proposed order is proportionate. A narrow order preserving funds and essential payments may be more workable than an order purporting to decide the whole election immediately.
5. What changes if the organisation is a voluntary social welfare agency?
The 1961 Ordinance defines the governing body and gives the Registration Authority powers to suspend a governing body and appoint an administrator or caretaker body in specified circumstances. The organisation should check whether a formal statutory order exists. A faction’s private claim to be a caretaker body is not the same as an appointment under the Ordinance.
6. What should a donor or contractor do before accepting a new signature?
Ask for the certificate and governing instrument, the latest reliable governing-body record, the meeting and resolution supporting the signature, any regulator or donor approval, and a clear explanation of the dispute. Keep the request neutral. If the risk remains, pause the material commitment or use an agreed escrow, dual-signature or court-approved protocol rather than relying on a title alone.