COMPANY SECRETARIAL PRACTICE IN BANGLADESH

Legal status

According to The Companies Act, 1994, Section 2(u) - Secretary means- any individual
possessing the prescribed qualifications appointed to perform the duties which may be
performed by the secretary under this act and any other ministerial or administrative duties.

Scope of work of a Company Secretary

1. Company Secretaries works at the center point of the decision-making process in an

organization, which is a powerful position of influence.

2. Generally, the Company Secretary assists and guides the directors in their quest of profit
and growth but also act with integrity and independence to protect the interests of the
company, its shareholders and employees.

3. Today’s Company Secretary plays a pro-active and central role in the governance of the
company. This requires excellent communication skills, a thorough knowledge of the
company’s business and applicable regulations, strength of character, integrity, and
above all a professional approach.

4. The appointment of Company Secretary is the responsibility of the board of directors;

yet despite this legal requirement, the law, whether in the form of the Companies Acts,
does not state overtly what the Company Secretary should do once appointed.

5. The limited number of references to the Company Secretary in the Companies Acts and
in some circular by Securities and Exchange Commission (SEC) might lead a person
newly appointed to the post to underestimate the scope of the responsibilities acquired.

6. All directors should have access to the advice and services of the Company Secretary,
who is responsible to the board for ensuring that Board procedures are followed and
that applicable rules and regulations are complied with.

7. Any question of the removal of the Company Secretary should be a matter for the board
as a whole. Company Secretary is the key to the efficiency and effectiveness of the board
and to the smooth running of the company. To fulfill the role, the Company Secretary
must not only keep up to date with relevant legal, statutory and regulatory
requirements but also be able to give impartial advice and support to directors (in
particular, non-executive directors who might not have such detailed knowledge of the
company as the executive directors).

8. To distinguish between the duties which all Company Secretaries should perform (core
duties) and those which they often perform (additional duties).Core duties are defined
as those for which the Company Secretary is responsible as an officer of the company
and those undertaken by the Company Secretary as a matter of established and best
 practice. The list of core duties is therefore a refinement of statute, common law and
good practice.

9. There has been an increasing need over the recent years for the Company Secretaries in
the corporate sectors.

10.  Since long the role of Company secretary is recognized by the developed countries but
in Bangladesh there are so many invisible obstacles to get the Chartered Secretaries Act
approved/passed by the parliament. As we know that it is better if we can set one or
more control points in business houses to check every unlawful activity by the other
professional services or management of a company.

11. This type of control points can help Government to check whether the company comply
every legal obligation, Owner to check if there is any malpractice or fund defalcation,
employees to get their wages paid appropriately and shareholders to have their
dividend on timely and in terms of amount actually.

12. As the secretary is an officer of the company, they may be criminally liable for defaults
committed by the company. The liability could include failure to file: in the time
allowed; any change in the details of the company's directors and secretary; and the
company's annual return.

The company secretary generally performs following duties

1. To maintain statutory registers of members, directors and directors' interests

2. To ensure statutory forms to file & submit promptly & properly

3. To Send the Registrar copies of resolutions and agreements

4. To safeguard and protect such interests of the company at all levels viz. legal, statutory,
administrative, arbitrational and in other policy matter 

5. On approval of Board-

i. To convene Board or Shareholders meetings in time

ii. To sign notices of such meetings

iii. To send annual and half yearly accounts to shareholders

iv. To prepare minutes of the meeting timely and correctly

v. To make sure that the quorum requisite is present in the meeting etc.

6. Before execution to verify all agreements/deeds/contracts are properly framed &

worded.

7. To work as public relations officer of the company etc.

Role of the Company Secretary

The three main areas, a Company Secretary has the role to play viz. to the Board, to the
Company and to the Shareholder. Within each, the Company Secretary’s role can be very
diverse.

i. To the Board

A Company Secretary must ensure that the procedure for the appointment of directors is
properly carried out and assist in the proper induction of Directors, including assessing the
specific training needs of directors/executive management. Secretary needs also to be available
to provide comprehensive practical support and guidance to directors both as individuals and
as a collective with particular emphasis on supporting the non-executive directors. He/she
should also facilitate the acquisition of information by all board and committee members so that
they can make best use of their ability to have a say to board meetings, discussions etc. Further
to these tasks, he/she needs to assist in the compilation of board papers and to filter them to
ensure compliance with the required standards of good governance. It may also be part of the
Company Secretary’s role to raise matters which may warrant the attention of the board

ii. To the Company

Secretary ensures compliance with all relevant statutory and regulatory requirements and that
due regard is paid to the specific business interests of the company, for example, a
manufacturing company may require a different approach from that of a bank or a financial
services company or from that of a charitable company. Secretary also need to assist in the
implementation of corporate strategies by ensuring that the board’s decisions and instructions
are appropriately carried out and communicated. Further to this, he/she should be available to
provide a central source of guidance and advice within the company on matters of business
ethics and good governance.

iii. To the Shareholder

The Company Secretary needs to communicate with the shareholders as appropriate and to
ensure that due regard is paid to their interests. He/she also need to act as a primary point of
contact for institutional and other shareholders, especially with regard to matters of Corporate
Governance.

iv. Duties as an Administrative Officer

The Companies Act 1994 imposes numerous obligations on companies regarding, the conduct
of their affairs. As an officer of the company, the Company Secretary can be prosecuted for most
of these offences. Responsibility for ensuring compliance with these matters ultimately rests
with the directors. However, by making the Company Secretary liable, the Act not only
recognizes that the directors usually rely on the Company Secretary in this regard, but also
provides a strong indication that they should give the Company Secretary responsibility for (or
an involvement in) these matters. This is reinforced in the case of public companies by the
requirement that the directors appoint as Company Secretary someone they believe is capable
of performing the functions. Indeed, a director will often escape personal liability if they are
able to show that the breach was not caused by their own acts or omissions and that the board
had appointed a suitably qualified Company Secretary with responsibility for these matters. It is
clear that, in view of their potential liabilities, Company Secretaries should not close their eyes
to cases of non-compliance even if the directors have purported to make someone else
responsible for those matters. Company Secretary should draw such cases to the attention of the
directors and advise on the company's duties and obligations. It can therefore be argued that
the Company Secretary has a duty as an officer of the company to keep an eye on these matters,
regardless of the terms of their employment control. Company Secretaries should also ensure
that where certain of their responsibilities are delegated, such tasks are properly executed, since
they can still be held accountable in law for any failure by the company to comply. The
fiduciary duties of directors can apply equally to executives occupying senior management
positions in the company and authorized to act on its behalf. This usually includes the
Company Secretary who, in any occasion, as an officer of the company has the following
fundamental duties:

• act in good faith in the interests of the company;

• not to act for any collateral purpose

• to avoid conflicts of interest

• not to make secret profits from dealings for or on behalf of the company.

Core Duties of the Company Secretary

Below mentioned duties includes both those duties which are legal obligations as well as those
which result from best practice. Besides, a Secretary may have to use his/her inventiveness to
ensure that all core duties are fulfilled.

i. Meetings of the Board of Directors

ii. General Meetings

iii. Memorandum and Articles of Association

iv. Requirements of Stock Exchanges & Regulatory bodies

v. Maintenance of Statutory Registers

vi. Statistical Books

Company Secretary has to maintain the following statistical books also-

 a. Application and allotment register

b. Register of share transfer

c. Attendance record book

d. Agenda book

e. Proxy register

f. Index cards for maintaining specimen signatures of members

g. Share certificate and debenture book. etc.

vii. Submission of Statutory Returns

Following periodic statutory returns required to file with certain changes, to RJSC, like:

a. Annual returns (Schedule X): within 21 days of general meeting

b. Filing of Audited Accounts: within 30 days of general meeting with the annual

return

c. Return of Allotment (Form XV): within 60 days of allotment of shares

d. Amended Memorandum and Articles of Association

e. Notices of appointment, removal and resignation of directors (Form

XII): within 14 days of any change therein

f. Consent of Directors to act (Form IX) : at the time of appointment of director

g. List of persons consenting to be Directors: at the time of appointment of

director

h. Agreement to take qualification shares in a proposed company (Form XI)

i. Notices of appointment, removal or resignation of auditors

j. Change of registered office (Form VI), within 28 days of incorporation or of any

change thereon

k. Special resolution (Form XIII) within 15 days of passing resolution thereof 

l. Increase of Authorize Capital (form IV), within 15 days of passing resolution

thereof etc.

ii. Report and Accounts

A Company Secretary has also to co-coordinate the publication and distribution of the
company’s annual report, accounts and interim statements, in consultation with the company’s
internal and external advisers, in particular, when preparing the directors’ report.

iii. Registration of Shares

He/she has to maintain the company’s register of members; dealing with transfers and other
matters affecting share-holdings; dealing with queries and requests from shareholders and
different stakeholders.

iv. Communications to and from Shareholder 

Communicating with the shareholders (e.g. through circulars); arranging payment of dividends,
interest; issuing documentation regarding rights issues and capitalization issues; maintaining
good shareholder relations; maintaining good relations with institutional shareholders and their
investment committees.

v. Shareholder Monitoring

Monitoring movements on the register of members to identify any apparent ‘stake-building’ in

the company’s shares by potential take-over bidders; making appropriate inquiries of members
as to beneficial ownership of holdings.

Present performers In Bangladesh

Company Secretarial practice are being performed by professionals of-

 Chartered Secretary (ACS / FCS)

 Chartered Accountants (ACA/FCA)
 Cost Management Accountants (ACMA/FCMA) and
 Experienced Officials of different Disciplines.

Duties of Company Secretary:

 to work as a Custodian
 to safeguard interest of the company
 to work for share issue, transfer
 to work for deed finalization & execution
 to work as a PRO
Responsibilities of Company Secretary:

 responsible for all lapses, frauds or wrong doing in legal works

 responsible for meeting convening different statutory meetings
 responsible for maintaining strict secrecy on company info
 responsible for filing various statutory returns
 responsible for maintaining various statutory registers
 responsible for compliance with different authorities like RJSC, BOI, SEC etc.
 responsible for maintaining statutory time requisite for shareholders notice etc.