Commerce Minister Khandakar Abdul Muktadir on Monday said the Companies Act 1994 needs to be amended and updated in line with the changing times, as the legal framework has seen only minor changes since its enactment.
Speaking as the chief guest at a stakeholder consultation on the draft amendments to the Companies Act, 1994 at the FBCCI boardroom in the city, he said good examples could be drawn from countries where business rules and regulations are being implemented effectively to simplify trade practices in Bangladesh.
The dialogue was organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
The minister said the Companies Act has undergone only two minor reforms since it was enacted in 1994, and stressed the need to make the law more effective and business-friendly in line with the changing times.
There is no need to spend excessive time devising an entirely new model, he said, noting that many countries, including Singapore, already have effective laws and regulations governing company operations and business, whose experiences could be reviewed to adopt a suitable framework for Bangladesh.
Muktadir told business representatives that before amending the Companies Act, a thorough review of how similar laws function in other countries is necessary, following which amendment proposals should be made based on the opinions and experiences of businesspeople.
Noting that businesspeople have sought 30 days to give their opinions on the draft amendments, he said if more time is needed, it could be extended to 60 days.
However, the minister said formulating a good and realistic proposal is more important than the time it takes.
He said there is no need to rush the amendment process. “Proposed and existing laws of different countries need to be compared, following which a framework should be built with advice from businesspeople to make doing business in the country easier and improve the investment climate.”
Muktadir further said the government has set a number of targets for implementation over the next three years, keeping in mind Bangladesh's graduation from the group of least developed countries (LDCs).
There are various challenges in achieving these targets, he said, adding that the Companies Act amendment is only a part of that larger action plan.
Highlighting the importance of the private sector in the country's economy, the minister said the private sector is the main driving force of the economy, and creating a suitable environment for entrepreneurs to conduct business smoothly is essential in keeping pace with the times.
He also noted that the government did not inherit substantial foreign currency reserves, a significant revenue surplus, or adequate budget allocations when it took office, while private sector entrepreneurs are also going through various challenges.
"This is a time of change for all of us. We have to get through this period with a calm mind and good planning. We need to build a realistic platform and develop an effective framework for the future," Muktadir said.
He also said discussions on reforms with businesspeople will continue, adding that the business community will be consulted before any major changes are introduced in the future.
At the event, FBCCI Director Barrister Nihad Kabi presented various proposals, including one to make it mandatory for companies with annual income exceeding Tk 50 crore to appoint a company secretary.
She also proposed that professionals such as chartered accountants, cost and management accountants, and company secretaries should not be allowed to represent companies.
Proposals for changes to the Annual General Meetings (AGMs) of companies were also placed, suggesting that shareholders be notified at least 21 days before the AGM date is announced.
A proposal was also made to allow flexibility in appointing independent directors in public limited companies other than listed ones.
A businessperson present at the event proposed reducing the AGM notice period from 21 days to 14 days, a proposal supported by Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
FBCCI Administrator Md Fazlul Hoque presided over the event, which was attended by representatives from various business organisations, regulatory bodies, stock exchanges, and audit firms.