Ajit Kumar Paul FCA...Ajit Kumar Paul FCA Topics DB 2018 Rank DB 2017 Rank DB 2016 Rank info outline Change in Rank DB 2017 DTF (% points) info outline DB 2016 DTF (% points) info

Ajit Kumar Paul FCA

Topics DB 2018

Rank

DB 2017

Rank

DB 2016

Rank info

outline

Change in

Rank

DB 2017

DTF (%

points) info

outline

DB 2016 DTF (%

points) info outline

Overall 177 176 178 2 40.84 40.68

Starting a Business 131 122 115 7 81.74 81.72

Dealing with

Construction Permits 130 138 138 0 61.60 61.25

Getting Electricity 185 187 187 0 16.17 15.22

Registering Property 185 185 186 1 27.58 27.48

Getting Credit 159 157 152 5 25.00 25.00

Protecting Minority

Investors 76 70 69 1 56.67 56.67

Paying Taxes 152 151 148 3 55.56 56.07

Trading Across

Borders173 173 173 0 34.86 34.86

Enforcing Contracts 189 189 189 0 22.21 22.21

Resolving Insolvency152 151 153 2 27.02 26,36

Ease of Doing Business – Bangladesh Status

2017 SingaporeRank 01

NewZealandRank 02

Korea Rep.Rank 04

BhutanRank 71

BangladeshRank 176

IndiaRank130

2018 Rank 02 Rank 01 Rank 04 Rank 75 Rank 177 Rank100

Procedures (no.)

3 1 3 8 9

Time (Days) 2.5 0.5 4.0 15.0 19.5

Cost (% of Per Capita Income)

0.6 0.3 14.5 4.0 13.9

Paid In Min-Capital (% of Per Capita Income)

0.0 0.0 0.0 0.0 0.0

Private investment flows limited

FDI inflows low conversions of intentions to actual even lower

Weak industrial and connectivity infrastructure

$7.5 billion locked up in commercial and tax disputes

Weak reform and policy making /coordination capacity

Lack of enforcement capacity of government agencies

Weak private sector voice

Poor Investment facilitation/promotion

Government has been working hard with full commitment to bringchanges by promulgating appropriate enactments and dueenforcement to achieve the following Objectives:

To promote the development of the economy,

To encourage transparency and accountability,

To promote high standards of corporate governance,

To recognize new concepts and procedures to support businesswhile protecting interests of all the stakeholders,

To set up institutional structure in the form of various authorities,bodies and panels, and

To enforce stricter action against fraud and gross non-compliancewith legal provisions.

Vigil (Whistle Blower) mechanism provides a channel to theemployees and directors to report to the management concernsabout unethical behavior, actual or suspected fraud or violation ofthe Codes of conduct or policy.

The Act simplified procedure for merger and amalgamation ofcertain class of companies such as holding and subsidiary and smallcompanies

Minimum Capital Requirement: Private or public company can beincorporated without the need for minimum paid up share capital

Common Seal: The requirement of having common seal madeoptional

Declaration of Dividend: no company shall declare dividend unlesscarried over past losses and depreciation in previous year or yearsare set off against profit of the company for the current year.

We should plan for a Company Law keeping an eye on thechanging business scenario of Bangladesh and reducingbusiness cost.

The importance on giving emphasis on a multi jurisdictional,comprehensive and updated Companies Act that will easenew entry, reduce cost of doing business.

Keep stressed on facilitating electronic communication andmodern technology in the Companies Act.

The new Companies Act should be supportive to SMEs.

Full automation of the Office of the Registrar of Joint StockCompanies (RJSC) .

The annual reports should be uploaded in the website of therespective company.

The method of paying interim dividend should be included inthe Act.

Formulate a comprehensive Companies Act ensuringtransparency and accountability.

Coordination of the trade and business related regulationsbefore finalizing the Act may help ensuring a businessfriendly environment in the country.

We need to customize the Companies Act to our own way.

In formulating the new Companies Act, we need to focus oneasing share transferring process, taxation policy, reducingfees, etc

We need to go for corporate governance and corporatemanagement system. Modernizing the Companies Act isessential to attract FDI

For better functioning, coordination among RJSC, BangladeshBank, SEC, NBR, BIDA, City Corporations and other concernedregulators is a must.

Introduction of Auto systems in all stages as a policyinitiatives.

The new Act should benefit the new generation. We shouldthink about the next 50 years

For ensuring a business-friendly atmosphere, they demandedinclusion of provisions, like - streamlining registrationprocess of companies, and forming special tribunal or raisingthe number of benches to settle company disputes.

The companies are burdened with multiple audits likestatutory, commercial and tax.

Provision of secretarial audit is just creating an additionalburden for the businesses.

Colossal backlog of cases in the High Court (HC) division aserious concern for doing business in the country.

Promote two digit EODB ranking for two digit growth.

The current (companies) act does not support new typesof financing mechanism, like - private equity andemployer stock scheme.

Bangladesh now needs to move towards strongercorporate governance and management.

Registration and Regulation of Foreign Company ,Branch of Foreign Companies, Liaison Offices of ForeignCompanies- Now BIDA & BB- coordination ?

Conflict between Companies Act section 28, 29 with theSocieties Act 1860 – both being managed by RJSC –duplication ?

Regulatory role of RJSC ?

Strong Database, Websites of companies ?

One person Company vs. Small Company ?

Foreigners are forming charitable company, Trading company ?

Accommodation of all related laws- FRC, BSEC, Bank / Insurance Companies, Professionals, NGO Affairs Bureau, Industrial policy etc, Standard setting and applicability, Preparation & responsibility of Financial Statements.

Company secretarial matters and compliances of laws , rules and regulations should be ensured through Internal Audit process.

Functional – fully automation, Cost , Process and time reduction.

Discretion of RJSC, Responsibilities of management, Electronic communication, less notice period, Areas for general meeting and special resolution should be clearly designed.

Ceiling of number of audit clients for the Auditors.

The Companies Act should provide the Governance of companies through :◦ Rights and Obligations of Shareholders;

◦ Reporting Obligations of the Company;

◦ Procedural functions of the company;

◦ Investment and Financial functions of the company.

SL. New Provision Rationale Impact

1. Share buy-back and treasury shares

Under the current Companies Act, 1994 a company is not allowed to buy its own share or provide financial assistance for purchasing its own share. Lack of the facility to buy back shares exposes the capital market to secure stability and the regulators are prevented from directing the listed company to buy back certain portion of its shares to prevent drastic fall or sudden rise of share prices.

This provision will enable the regulator to control abnormal price fall or hike in the capital market ensuring a stable capital market.

2. Employee stock scheme In this age of venture capital and intellectual property based service industry, in order to retain talented employees, paying salary is not enough. To motivate the employees, it is necessary to encourage them by offering shares of the company. This will help the company to minimize cost as well.

Growth of intellectual property based companies and encouragement to the higher management staff.

3. Reducing the provision of object clauses

Since the company is always allowed to alter its object clause at any time, keeping a stringent provision of object clause causes delay in business decision of running companies.

Speedier business decision opportunity and greater certainty to third party.

4. Specific provision on Directors Duties

Lack of clarification as to the extent of director’s duties and consequence of breach of such duties leads to a weak corporate culture.

This will bring certainty in the law.

5. Specific provisions on holding meeting and circular resolution

Stringent requirement of holding meetings may not be practical all the time in case of small private companies. Allowing them to meet the formalities through alternative means would ease the compliance requirement.

Corporate structure as a means of doing business will be encouraged

6. Single Member Company In order to create scope for doing business through corporate structure, it is necessary to provide utmost flexibility in structuring the entity.

Sole proprietors and SMEs will be encouraged to incorporate company.

SL. New Provision Rationale Impact

7. Mandatory requirement of appointing Secretary by public listed companies (PLCs)

Securing corporate transparency Retain investors will be able to see how the company is maintaining its corporate documents.

8. Abolition of requirement of taking approval for holding AGM

Current requirement of obtaining approval from the Court causes unnecessary delay and waste of court time.

Simplification of compliance requirements.

9. Abolition of taking approval from the High Court for altering object clauses

Current requirement of obtaining approval from the Court causes unnecessary delay and waste of court time.

Simplification of compliance requirements.

10. Restriction on declaration of dividend without first adjusting cumulative losses

It is necessary to introduce this restriction to ensure maintenance of capital

Corporate governance will be secured.

11. Specific provisions on the adoption of company’s name

To prevent fraud and abuse of intellectual property rights, it is necessary to provide specific rules regarding the name of the company.

Corporate governance will be secured.

12. Simplifying winding up procedure

Business exit process currently requires a lengthy procedure involving at least 6-8 months and substantial amount of money. For a thriving economy, entry and exit from the business should be made as smooth as possible.

Lots of defunct companies will be benefited and the company registry will be able to monitor the activities of the companies in the register.

SL. New Provision Rationale Impact

13. Recognition and accommodation of International Accounting Standards, International Financial Reporting Standards & International Auditing Standards

Already these standards are in practice. It ensures fair and true view of the Financial Statements and enhance investors confidence.

Transparent and accountable accounting and auditing will take place.

14. Introduction of Corporate Governance Establishment of an orderly and efficient management of the company

Corporate culture would be visible

15. Provision for Social Corporate responsibilities Contribution to build a equitable society Image building16. Protection of Minority Interest It is necessary to introduce due

mechanism to protect minority interestBuilding Investors

confidence17. Recruitment of CEO, CFO, Company Secretary,

Internal Auditor as part of EEE style management.To ensure effective management and right placement of the manpower

Corporate governance will be secured.

18. Role of Independent Director To ensure best practices within the entity Will increase oversight role.

19. Provision for enforcement of contracts and

taking punitive measures on mis- doings /

manipulation

It will increase confidence of the

investors. This enables right to get

recovery.

Increase investment

both local and foreign

20. Provision for resolving Insolvency Disputes need to be mitigated as per

law.

Ensure equitable

solution of financial

litigations.

21. Strengthening capacity of RJSC , Setting up

Tribunals.

Regulatory oversight and stringent

measures required for speedy delivery

Wheeling impact

22. Contributory Role of Professionals should be

treated as an aid to the Regulatory Services

Regulator alone can not make the

market convergence.

Belongingness &

Ownership

Impact of Modernizing The Companies Act

Companies ActCritical Reforms for Private Sector Development

Heightened Due Diligence

at Financial Institutions

Heightened Business

Confidence

Greater Corporate

Governance

Greater Efficiency,

Transparency, Participation

Lowers Cost of Doing

Business

Positive Impact on

Ease of Doing Business

Growth story of Bangladesh

Parameters What we were As of now

Per capita (USD ) 129.71 (1971) 1610 (2016-17)

Population under the poverty line 82% (1970) 12.9%

Literacy Rate 29.23% (1981) 70% (estimated 2015 )

Female Literacy Rate 27(1971) 77% (estimated 2015 )

GDP growth 4.62% (1976) 7.28%

Export (USD ) 0.4bn (1976) 34.24 bn (2015-16)

FDI (USD ) 7 million (1977) 2985 million (30.06.17)

Forex Reserve (US$) 7.50 bn (2009) 33.407 bn ( June ’2017)

Electricity Gen. Capacity 3362 MW (2009) 15,755 MW (Jun’17)

(Mx. Gen. 9479 MW)

To become a Middle Income Country by 2021 we need to move faster…

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