Move to allow one-man companies makes progress; bill placed

The ‘Companies (2nd Amendment) Bill, 2020’ was placed in Parliament on Monday keeping a provision of formation of one-man companies aiming to attract greater investment and do better in the global ease of doing business ranking.

Commerce Minister Tipu Munshi placed the bill and it was sent to the respective scrutiny for further examination. The Committee was asked to submit its report within 30 days.

The Bill says a one-man company could be formed and its owner and shareholder would be a single entity (person).

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

In the case of winding up of a company, the repayment of debts of the company shall be given priority, according to the proposed law.

In the Bill, another provision for an online registration system has been kept for companies.

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

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

The provision of formation of one-man companies and extending the notice time to 21 days will help Bangladesh climb up notches in the ease of doing business ranking and attract greater foreign investment.

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

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

According to the bill, the one-man company has to have paid-up capital of at least 50 lakh taka to maximum 10 crore taka. The minimum turnover of that company in the immediate past year will be 2 crore taka to 100 crore taka.

If the paid-up capital and turnover exceeds the amount. then the one-man company can be transformed into 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 the 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.

If that one person dies then, as per the bill, the nominated person will get all the shares.

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 Jatiya Party MP Fakhrul Imam opposed the bill, Commerce Minister Tipu Munshi said such is seen in many parts of the world. The government has taken the initiative to amend the law for encouraging foreign investment in the country.