Company Law in Bangladesh: The Companies Act 1994, Directors, Shareholders and 2026 Reforms

Company law in Bangladesh: the 2026 framework

Company law in Bangladesh is built on one statute, the Companies Act 1994, which governs how companies are formed, run, financed, restructured and closed. Thirty-two years after it replaced the colonial Companies Act 1913, the Act still decides who may sit on a board, how shareholders exercise control, what must be filed with the Registrar of Joint Stock Companies and Firms each year, and what a minority investor can do when the majority acts unfairly. In 2026 it is also the subject of the most significant reform effort in a generation, with a draft Third Amendment now in consultation.

This guide is the hub for TRW's corporate insights. It maps the structure of the Act, the 2020 amendments that introduced the one person company and removed the common seal, directors' duties, shareholders' rights and meetings, the annual compliance cycle, share transfers, the minority remedy in section 233, winding up and the reforms on the table for 2026. Registration itself is covered in our separate guides, linked below, so this article concentrates on what happens after incorporation: running a company lawfully and protecting the people who own it.

Summary: The Companies Act 1994 governs private, public and one person companies in Bangladesh. The RJSC keeps the register and receives annual filings; the High Court Division hears statutory company matters. Boards must manage conflicts, hold an AGM every calendar year and file annual returns, while shareholders holding one-tenth of the issued capital can requisition meetings and seek court protection against oppression under section 233. A draft Third Amendment published in 2026 would digitise registers, require beneficial-ownership declarations and raise penalties.

Key point: Most corporate disputes in Bangladesh begin with a compliance failure: a missed AGM, an unfiled return, an unregistered transfer or an undisclosed conflict. The statutory thresholds are strict. In July 2026 the High Court Division confirmed that the one-tenth shareholding needed for a section 233 petition is jurisdictional and must be held in the petitioners' own names.

At a glance

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Table of Contents

Why company law in Bangladesh matters after incorporation

Most founders and foreign investors meet company law in Bangladesh at the registration stage, when they choose a name, settle the memorandum and articles and file with the RJSC. That is the shortest part of a company's life. The riskier part is ongoing governance: valid meetings, director changes, share issues and transfers, statutory registers, returns and, eventually, restructuring or closure. Each step is regulated by the Companies Act 1994 and leaves a paper trail that a court, bank or buyer will later examine.

The scale of non-compliance is striking. Of roughly 300,000 companies registered with the RJSC, only about 57,000 to 58,000 have filed audited accounts since the Digital Business Identification system was introduced in 2020, according to figures discussed at the FBCCI consultation on the 2026 draft amendment.[9] Companies in that gap face daily fines, shareholder challenges and problems with banks that check RJSC records.

For registration steps and fees, see our guides to company registration in Bangladesh and private limited company registration. For an overview of choosing a business vehicle, see corporate law and business formation in Bangladesh.

How the Companies Act 1994 is structured

The Companies Act 1994 was enacted on 12 September 1994 as Act No. 18 of 1994 and is written in Bangla.[1] It is a consolidated code covering incorporation, the memorandum and articles, share capital, management and meetings, accounts and audit, winding up, registration offices and foreign companies. Schedule 1 contains the model regulations that apply to a company limited by shares where its own articles are silent.

The forms of company

Section 2 defines a private company as one whose articles restrict the right to transfer shares, prohibit any invitation to the public to subscribe for its shares or debentures and limit membership to fifty, excluding employees, with joint holders counted as one member. A public company is simply a company that is not a private company.[2] Since 2020, section 2 has also defined a one person company as a company whose only shareholder is a single natural person.[2] Foreign companies with a place of business in Bangladesh register separately; see our guide to foreign company registration.

The court with jurisdiction

Under section 3, the court with jurisdiction under the Act is the High Court Division of the Supreme Court. The government may, by gazette notification, transfer any of those powers to a district court for companies whose registered office lies in that district.[1] In practice, winding-up, oppression, rectification and scheme petitions are heard by the company bench in Dhaka. In 2023 the High Court Division itself observed that a single bench handling company matters had left many cases pending, and recommended dedicated company law tribunals.[7]

Company regulations beyond the Act

Company law in Bangladesh is not confined to the 1994 Act. Listed companies also answer to the Bangladesh Securities and Exchange Commission; banks and finance companies to sector statutes and Bangladesh Bank; and companies with foreign shareholders to foreign exchange rules. Tax compliance with the National Board of Revenue runs in parallel, and our guide to corporate income tax in Bangladesh covers that side.

The 2020 amendments and the one person company

The Act was amended twice in 2020, and those amendments remain the most important changes to company law in Bangladesh since 1994.[8]

Companies (Amendment) Act 2020: the end of the common seal

The Companies (Amendment) Act 2020 (Act No. 7 of 2020) removed the mandatory common seal from the Act, including from the notice provisions in section 85.[3] Companies may still adopt a seal under their articles, but documents and deeds no longer fail for want of one, and companies may authorise attorneys to execute deeds on their behalf.[6] Older articles that still require a seal should be updated.

Companies (Second Amendment) Act 2020: OPCs, PLC suffix and meetings

Parliament passed the Companies (Second Amendment) Bill on 17 November 2020, introducing the one person company.[5] It became Act No. 24 of 2020.[2] As enacted, an OPC must have paid-up capital of between Tk 25 lakh and Tk 5 crore, or an annual turnover in the immediately preceding year of between Tk 1 crore and Tk 50 crore; when it exceeds those limits it may convert into a private or public limited company.[5] The sole shareholder must name a nominee who will take the shares on death or incapacity, the company must use "OPC" at the end of its name, and public companies must now end their names with "PLC".[6]

The same Act raised the minimum notice for an AGM and other general meetings from 14 to 21 days, required notices to state the venue, date, time and business, and gave holders of at least 5 per cent of the share capital the right to propose AGM agenda items.[3] It also introduced in-person confirmation of share transfers before the Registrar, strengthened the rules on fraudulent preference in liquidation and allowed deeds and documents to be executed electronically.[6] Our guide to the one person company in Bangladesh covers OPC formation and operation in detail.

The RJSC: registry, regulator and record

The Registrar of Joint Stock Companies and Firms operates under the Ministry of Commerce and registers companies, trade associations and partnership firms. Its online system now handles name clearance, incorporation and most post-registration filings, and its records are the starting point for any due diligence on a Bangladeshi company. When a bank, a buyer or a court asks who the directors and shareholders are, the answer it relies on is the RJSC record, not the company's own minute book.

The Registrar receives annual returns under section 36, registers charges, records changes of directors and registered office, grants limited extensions for AGMs and financial periods, and strikes defunct companies off the register.[1] Under the current Act, alterations to the memorandum often require court confirmation; the 2026 draft would move several of those approvals to the Registrar and allow the Registrar to impose fines directly.[8]

The practical lesson is that filings matter as much as decisions. A board resolution appointing a director, or a transfer approved by the board, is legally fragile until the corresponding return is filed and the RJSC record updated. Our guide to corporate secretarial compliance in Bangladesh lists the routine filings.

Directors' duties under company law in Bangladesh

Company law in Bangladesh does not codify directors' general duties in the way the UK Companies Act 2006 does. Directors' obligations come from three layers: specific rules in the Act, the articles, and the fiduciary principles of good faith, proper purpose and care that courts apply from the common law tradition. The statutory rules carry fines and are invoked most often.

Board composition and eligibility

Under section 90, a public company and any private company that is a subsidiary of a public company must have at least three directors, and every other private company at least two. Only a natural person may be appointed as a director.[1] Section 94 disqualifies a person of unsound mind declared by a court, an undischarged insolvent, a person with a pending insolvency application, a minor, and a shareholder who has left a call unpaid for 180 days after the due date; the articles may add further grounds.[1]

Conflicts of interest

Section 130 requires a director who is directly or indirectly interested in a contract or arrangement of the company to disclose the nature of that interest at the board meeting where it is decided, or at the first board meeting after the interest arises. A general notice of interest in a named firm or company is sufficient for later dealings with it. The company must keep a register of such contracts open to members' inspection.[1] Whether an interested director may vote or count in the quorum depends on the articles, so boards should check their own constitution before approving related-party transactions.

Loans to directors

Section 103 generally prohibits a company from lending to, guaranteeing or securing loans for its directors, firms in which they are partners and private companies in which they are directors or members. Narrow exceptions exist, but even then the transaction needs board sanction, general meeting approval and balance-sheet disclosure, and is capped at half the paid-up value of the director's own shares. Those involved face fines or imprisonment and joint liability to repay.[1]

Listed companies

For listed companies, the BSEC corporate governance code adds independent directors, board committees and disclosure obligations on top of the Act. The code requires every listed company to have at least one female independent director; in December 2025 only 138 of 360 listed companies had complied and the deadline had been extended to 31 December 2025.[14] For a full treatment of board duties and liability, see our guide to corporate governance and directors' duties in Bangladesh.

Shareholders' rights and general meetings

Shareholders exercise control through general meetings, and the Act sets mandatory minimums that the articles cannot reduce.

The annual general meeting

Section 81 requires every company to hold an AGM in each calendar year, with no more than fifteen months between one AGM and the next. The first AGM may be held within eighteen months of incorporation. On an application made within thirty days after the deadline, the Registrar may extend the time for any AGM other than the first by up to ninety days or to 31 December of that year, whichever is earlier. If a company fails to hold its AGM, any member may apply to the court for an order calling one.[1]

Notice, agenda and resolutions

Section 85 requires at least 21 days' written notice of an AGM, any other general meeting or a meeting to pass a special resolution. Shorter notice needs written consent from all members entitled to vote for an AGM, or from holders of 95 per cent of the voting capital for other meetings.[3] Under section 87, extraordinary and special resolutions require three-fourths of the votes cast, and a special resolution requires 21 days' notice stating the intention to propose it.[1] Special resolutions are needed for the most consequential decisions, including altering the articles and resolving on voluntary winding up.

Requisitioning an extraordinary general meeting

Under section 84, holders of at least one-tenth of the paid-up share capital, with all calls paid, may require the directors to call an extraordinary general meeting. If the directors fail to do so, the requisitionists may convene it themselves within three months of depositing the requisition, and the company must reimburse their reasonable expenses, which it may recover from the defaulting directors.[1]

Information and inspection rights

Members may receive the audited accounts, inspect the register of members and the register of directors' contracts, and vote in person or by proxy. Accounts must be available at the registered office for at least fourteen days before the AGM.[1] Our guide to shareholder disputes in Bangladesh covers litigation strategy.

The annual compliance cycle

Annual compliance under the Companies Act 1994 revolves around the AGM. The audited balance sheet and profit and loss account must be laid before it, covering a period ending no more than nine months before the meeting, or twelve months for a company with business interests outside Bangladesh; a financial year may not exceed fifteen months without the Registrar's leave.[1] Auditors are appointed at each AGM to hold office until the next, and the board must appoint the first auditor within one month of incorporation.[1]

Within 21 days after the AGM, a company with share capital must file its annual list of members and summary with the Registrar under section 36, with details of past and present members, share capital, calls, directors, managers and auditors, and charges. A private company must certify that it has not invited the public to subscribe. Breach carries a fine of up to Tk 200 for every day of default, for the company and each officer in default.[1] OPCs follow a lighter regime, but must still prepare financial statements within 180 days of the year end.[6]

The following sequence is the minimum annual cycle we recommend for a private company:

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Event-driven filings sit alongside the annual cycle: changes of directors and registered office, allotments of shares, registration of charges within the statutory period, and alterations to the memorandum or articles. A late charge registration is particularly dangerous, because an unregistered charge may be void against a liquidator and other creditors.

Share transfers and foreign shareholders

Section 38 governs the registration of share transfers. A company may register a transfer only on receipt of a properly stamped instrument signed by transferor and transferee, together with the share certificate, and must notify both parties within thirty days if it refuses registration, failing which a daily fine applies. Since 2020 the Act has required the transferring party to confirm the transfer in person before the Registrar, with embassy certification for transferors who are abroad or foreign nationals.[1] [6] The articles of a private company will also contain pre-emption rights and board discretion to refuse transfers, which must be complied with first.

Where a non-resident is buyer or seller, foreign exchange rules apply in addition. Bangladesh Bank's FEID Circular No. 01 of 8 March 2026 consolidated the rules for unlisted companies: transfers must reflect fair value, a valuation report is required above Tk 1 crore in most cases, the transfer must be completed within 45 days, and repatriation of sale proceeds by the authorised dealer bank depends on the price falling within prescribed valuation limits.[11] Our guide to share transfer in Bangladesh covers the full procedure and stamp duty.

Minority remedies under section 233

Section 233 is the central minority remedy in company law in Bangladesh. Members or debenture holders may apply to the court on the ground that the company's affairs are being conducted, or the directors' powers exercised, prejudicially to their interests, or that the company has taken or is about to take action that unfairly alters their interests.[4] If the court finds unfair prejudice, it may set aside or modify a decision or transaction, regulate the future conduct of the company's affairs, or amend the memorandum or articles. Once the court amends the constitution, the company may not alter it inconsistently without the court's permission, and it must notify the Registrar within fourteen days.[4]

The one-tenth threshold is jurisdictional

Standing is borrowed from section 195: in a company with share capital, applicants must hold at least one-tenth of the issued share capital, with calls paid. In Abul Kalam Azad v Neptune Land Development Ltd, Company Matter No. 465 of 2026, judgment of 13 July 2026, the High Court Division dismissed a section 233 petition as not maintainable. The petitioners claimed about 11 per cent by adding their beneficial interest through a corporate shareholder to their own registered holdings; the court held that indirect economic interest does not count as membership, and that the threshold is a condition precedent and jurisdictional.[10]

Investors holding through a vehicle should secure a direct registered shareholding or contractual protection in a shareholders' agreement, and smaller shareholders should act together, because only aggregated registered holdings meet the test.

Other minority tools

The section 84 requisition, the right to apply for an AGM under section 81, the rectification of the register, an application for investigation, and a just and equitable winding-up petition under section 241 complete the toolkit. A winding-up petition is a last resort, usually used to force a negotiated exit.

Winding up, dissolution and striking off

A company in Bangladesh may be wound up by the court, voluntarily, or struck off by the Registrar as defunct. Under section 241 the court may wind up a company where it has resolved by special resolution to be wound up by the court; it has failed to file the statutory report or hold the statutory meeting; it has not started business within a year of incorporation or has suspended business for a whole year; its membership has fallen below two for a private company or seven for any other; it is unable to pay its debts; or the court considers it just and equitable.[1]

Under section 286 a company may be wound up voluntarily when the period fixed by its articles expires or a specified dissolving event occurs, when it passes a special resolution to wind up voluntarily, or when it passes an extraordinary resolution that it cannot continue its business because of its liabilities.[1] The 2020 amendments allowed creditors to object to the appointment of an official liquidator, adjusted creditor priorities and strengthened the power to set aside fraudulent preferences and transfers made shortly before liquidation.[6]

Striking off is the cheaper route for a dormant solvent company, but it requires up-to-date filings first. Our guide to winding up a company in Bangladesh explains each route and its timeline.

The 2026 reforms to company law in Bangladesh

The government has published a draft Companies (Third Amendment) Act 2026, prepared with input from the Bangladesh Financial Intelligence Unit and in light of High Court Division directions in a related writ petition. The commerce ministry said in August 2026 that it would proceed through the approval process.[8] It has not been enacted at the date of writing.

What the draft proposes

The draft would allow electronic registers, share transfers and meeting notices; automatic registration on model articles; declarations where a registered shareholder is not the beneficial owner, with fines of up to Tk 50,000 for non-compliance; and a framework for sharing company data with domestic and foreign authorities to counter money laundering. It would require a company secretary for listed companies and companies with paid-up capital above Tk 50 crore, and a CSR committee on boards.[8]

For OPCs, the paid-up capital range would widen to between Tk 5 lakh and Tk 50 crore, with conversion required only when both capital and turnover exceed Tk 100 crore. Defunct companies could be struck off after two years' inactivity, with newspaper notice, or voluntarily with the consent of three-fourths of members. Penalties would rise substantially, with the daily fine for name-change defaults rising from Tk 500 to Tk 5,000, and several deadlines would lengthen, including qualification shares from 60 to 120 days and charge registration from 21 to 30 days.[8]

The business response

At an FBCCI consultation on 7 September 2026, Commerce Minister Khandakar Abdul Muktadir said the law would be modernised on the basis of business feedback. Businesses asked for simpler deregistration of inactive companies, opposed easier auditor changes, sought to cut AGM notice from 21 to 14 days and asked for one definition of "company group". BSEC noted that its December 2025 proposals, including share buybacks by listed companies, which section 58 currently prohibits, were missing from the draft.[9]

The direction of travel is clear even if the final text is not: digital filing, disclosure of real ownership and stronger enforcement by the Registrar. Companies with nominee arrangements or stale RJSC records should regularise them now.

Where company disputes are heard in 2026

Statutory company matters remain with the High Court Division under section 3.[1] The Commercial Courts Ordinance 2026, issued on 1 January 2026 and replaced by the Commercial Courts Act 2026 (Act No. 23 of 2026), created dedicated commercial courts for listed categories of dispute, including joint venture and shareholder agreements and investment contracts, while excluding matters within the High Court Division's original jurisdiction.[12] The Act was passed in April 2026, and in May the Law Minister acknowledged gaps in it that the government intends to address.[13]

Company disputes therefore now face a split forum. A petition for oppression, winding up or rectification goes to the company bench; a claim for breach of a shareholders' agreement may belong in a commercial court, or in arbitration if the agreement says so. A clear dispute resolution clause avoids most forum fights.

The role of corporate lawyers in Bangladesh

Corporate lawyers turn company law in Bangladesh into working documents and defensible decisions. The best corporate law firm for a matter understands both the statute and how the RJSC, the courts, Bangladesh Bank and BSEC apply it. The work falls into four practice areas.

Corporate advisory and governance

Drafting and updating memorandums and articles, board and shareholder resolutions, related-party approvals, director appointments and removals, and annual compliance. Most governance disputes we see could have been avoided by articles that matched how the company actually operated.

Transactions

Share acquisitions, joint ventures, group restructurings, mergers and schemes of arrangement, due diligence and foreign exchange approvals. See our guides to mergers and acquisitions law in Bangladesh and holding and subsidiary companies.

Shareholder and boardroom disputes

Section 233 petitions, meeting requisitions, rectification of registers, injunctions against irregular meetings and negotiated exits. Speed matters here: the first weeks often decide who controls the board and the bank accounts.

Restructuring and insolvency

Voluntary and court winding up, creditor petitions, liquidator appointments, striking off and pre-insolvency negotiation with lenders.

TRW advises across each of these areas through its corporate and commercial advisory practice, its corporate governance and compliance practice and its corporate and shareholder disputes practice.

Mistakes to avoid under company law in Bangladesh

• Skipping the AGM: holding no AGM, or holding it on paper only, invites a member's application to the court and undermines every resolution passed since.
• Treating filings as optional: a director change or share transfer that is not reflected in RJSC records will be disputed later, often by the person who benefits from the gap.
• Short notice without consent: since 2020 the minimum is 21 days, and a meeting held on short notice without the required written consents is vulnerable.
• Indirect minority holdings: after the July 2026 Neptune decision, shares held through another company do not count towards the section 233 threshold.
• Ignoring foreign exchange rules: a transfer to or from a non-resident that does not meet Bangladesh Bank's valuation rules can block repatriation.

If your company needs a governance health check, a shareholder dispute strategy or advice on the 2026 reforms, contact TRW.

Frequently asked questions

What is the main law governing companies in Bangladesh?

The Companies Act 1994 (Act No. 18 of 1994), as amended in 2020 by the Companies (Amendment) Act 2020 and the Companies (Second Amendment) Act 2020. Sector laws and BSEC and Bangladesh Bank rules apply in addition for listed, banking and foreign-owned companies.[1] [3]

Which court hears company matters in Bangladesh?

The High Court Division of the Supreme Court is the court with jurisdiction under section 3 of the Companies Act 1994, unless the government transfers powers to a district court by gazette notification.[1]

How many directors does a company need?

A public company, and a private company that is a subsidiary of a public company, needs at least three directors; other private companies need at least two. Directors must be natural persons.[1]

When must a company hold its AGM?

Every calendar year, with no more than fifteen months between AGMs. The first AGM may be held within eighteen months of incorporation, and the Registrar may grant a limited extension for later AGMs.[1]

How much notice is required for a general meeting?

At least 21 days' written notice since the Companies (Second Amendment) Act 2020, unless the members give the written consents section 85 requires for shorter notice.[3]

What is a one person company?

A company whose only shareholder is a single natural person. It must name a nominee, use "OPC" in its name and, as enacted in 2020, stay within capital and turnover limits beyond which it may convert into a private or public company.[2] [5]

Who can bring a section 233 oppression petition?

Members holding at least one-tenth of the issued share capital in their own names, with calls paid. In July 2026 the High Court Division held that holdings through another company do not count.[10]

When is the annual return due?

Within 21 days after the AGM, under section 36. Late filing attracts a daily fine for the company and each officer in default.[1]

Is there a new Companies Act in 2026?

Not yet. A draft Companies (Third Amendment) Act 2026 has been published for consultation, proposing digital registers, beneficial-ownership declarations, wider OPC limits and higher penalties. It has not been enacted at the date of writing.[8] [9]

Can a company still use a common seal?

Yes, if its articles provide for one, but the Companies (Amendment) Act 2020 removed the statutory requirement, so documents no longer fail merely because no seal was affixed.[3] [6]