This article will focus on explaining the Board Resolution Process in Bangladesh . It is very important to follow the proper process of Board Resolution in line with the Companies Act 1994. This is because the decision of a board resolution has a great impact on every company. Therefore, the objective of this article is to help Business/Company Owners and Directors to have a better understanding of the Process of Board Resolution.
What is Board Resolution Process in Bangladesh ?
Board resolution is a formal document that identifies and contains the outcome of a decision or any vote given in the board meeting regarding the company. Resolution passed in the board meeting is called board resolution. Generally, Board Resolutions are written or prepared when a new member is voted into the board. Board Resolutions are also prepared when the Company wants to expand, hire, or let go of a large number of workers; sell shares; buy any form of intellectual property rights; and/or any other major decision that will affect the company in a significant way.
How are board resolutions held?
Written notice of every board meeting must be sent to all the directors who are staying in Bangladesh for the time being. It is such an essential requirement that failing to send notice to all the directors staying in Bangladesh at that time makes the resolution taken in that meeting invalid (Ittefaq Group of Publications Limited & others vs Arab Bangladesh Bank Limited & others; 50 DLR 597) .
Afterward, the matter of the resolution is discussed in the meeting and a decision is reached by the directors on that matter. The decision is recorded in a formal document and the company needs to comply with a few requirements in order to make it a valid board resolution which will be followed by the company thereafter.
Types of resolution
Extraordinary resolution
A resolution is an extraordinary resolution when it is passed by at least 75% of the majority of members and in the notice of the meeting the intention of proposing the resolution as an extraordinary resolution has been specified.
Special resolution
A resolution is a special resolution when it is passed by at least 75% of the majority of members (i.e “special majority’’) but the notice of the meeting must be given at least 21 days before the meeting and the notice must specify the intention of proposing the resolution as a special resolution.
Ordinary resolution
Resolution which is passed by ‘simple majority’ of members is an ordinary resolution. For a simple majority the number of vote in favor of the resolution needs to be more than the number of vote against the resolution.
Registration of special and extraordinary resolution
A copy of every resolution shall within fifteen days of passing be printed or typewritten and properly certified under the signature of an officer of the company and then it must be filled with the registrar (RJSC) who shall record the same. In this way, a valid board resolution is formed.
Consequently, it is important that companies are aware of these requirements. This is because if these procedural requirements are not complied with, the board resolution may not be valid and the company will be liable to penalty.
RJSC requirements for Board resolution
Certain board resolutions need to be submitted to the RJSC along with other specified documents in order to get return for change from RJSC. There are various forms in the RJCS which must be filled in depending on the change on which board resolution is done within a specified time. For instance, in order to transfer shares Form 117 must be filled in the RJSC at the presence of the officials of RJSC. In addition to the Form, Affidavit by the seller; Board Resolution by the company approving the transfer of the shares; and Certificate of Transfer of Shares needs to be submitted in the RJSC.
Legal Advice regarding Board Resolution by CLP
The Barristers, Advocates, and lawyers at CLP in Gulshan, Dhaka, Bangladesh are highly experienced at assisting clients through the entire process and legal provisions relating to Board Resolution in Bangladesh .
For any queries or legal assistance, please reach us at:E-mail: info@counselslaw.com
Phone:+8801700920980. +8801947470606. Address: House 39, Road 126 (3rd Floor) Islam Mansion, Gulshan 1, Dhaka.
