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UNIVERSITY OF DHAKA

Management Studies
BBA Program Company Law.
Course Code: 105 Course Name: Business Law

Prepared For
Professor Dr. Md. Ataur Rahman Dept. of Management Studies University of Dhaka

Prepared By
Mithun Maitra144 Ajit Chandra Barman...121 Nilay Pandit165 S. M. Abraham Lincoln 175. Bappi Faysal170 Md. Hasanujjaman 215
Group No # 10

Date of Submission: August 12, 2010

Letter of transmittal

We are from the group number ten. We are assigned to prepare a report on Company Law on the reference of our respected course teacher. We all, the group members, have tried our level best to bring out excellence in the report. We tried to work by Company Act included in Commercial Law and Industrial Law . We also took the required information from the internet in preparing the report. We also took help from the Business Law of Bangladesh. We all the group members are in highly gratitude with the help of our honorable course teacher. Your direction and instruction went a long way to prepare the report to the fullest possible way. Though we tried to prepare the report meticulously even so there may be some mistakes so we all expect you to consider it with your sympathetic consideration.

Table of Contents

Serial No. 01 02 03 04 05 06 07 08 09 10 11 12 13

Title Management of the Company AGM/EGM and Statutory Meeting Share/ Debentures Features & types of shares Rights, Liabilities & Duties of Shareholders Stock/ Difference between Stock and Share Managing Agency Board of Directors Distribution of wealth & Liability Appointment of Liquidity Liabilities of Liquidity Winding up of a Company Bibliography

Page No. 04-05 05-07 07--08 08-10 10-13 13 14-26 26-28 28 29 29 29 30

Models of management of a company

The usual and normal practices is to entrust the management of a company to a Board of Directors. The company act of 1956 formerly recognized and provided for four alternatives forms of management, viz (1) (2) (3) (4) by Managing Directors or Whole time Directors by Managing Agents by Secretaries and Treasurers and by Managers.

But no company can have at the same time more than one of the above categories of managerial personnel.

Managing Agent
Section 2(35) defines a managing agent as an individual, firm or body corporate, entitled to the management of the whole or substantially the whole, or the affairs of a company by virtue of an agreement with the company.

The Secretary
The secretary is the keeps of secret any work. The administrative work in a company can be divided into two parts (1) management of the business and (2) secretarial work. The latter includes maintenance of the books and registers required by the companies act, issue of share certificates, certification of shares, the recording of transfer of shares etc. The secretary is in charge of this branch of administration.

Manager
Sec 2(24) defines a Manager as an individual who, subject to the superintendence, control and direction of the board of directors, has the management of the whole company. The term includes a director or any other person occupying the position of a manager, by whatever name called and whether under a contract of service or not. It should noted that M.D. or W.D is a
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Director on Board, while manager may or may not be a Director on Board. A Director may also be appointed as Manager.

Annual General Meeting [AGM]

General meeting of a company means a meeting of its members for specified purposes. There are two kinds of General Meeting, (1) the Annual General Meetings and (2) other General Meetings. The statutory provisions regarding the Annual General Meeting are summarized below (a) Section 166: The first Annual General Meeting of a company may be held within a period of not more than 18 months from the date of its incorporation. If such a meeting is held within period it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation or in the following year. Subject to the above mentioned provision a company must hold an annual general meeting each year. Not more than 15 months shall elapses between the date of one annual general meeting and the next. The Registrar may, for any special reason, extend the time of holding an annual general meeting (other than the first annual general meeting ) by a period not exceeding 3 months. The notice, by which an annual general meeting is called must specify it as such. Every annual general meeting shall be called during business hours, on a day which is not a public holiday, at the Registered Office of the Company or at some other place within the town or village where the Registered Office is situated. The Central Government may exempt any class lf companies from the provisions mentioned in this paragraph. The time of holding of the annual general meeting may be fixed by the articles of the company. A public company or a private company which is a subsidiary of a public company may, by a resolution passed in one general meeting , fix the time for its subsequent general meetings. Other private companies may do so by a resolution agreed to by all the members thereof. (b) Sec.167: If default is made in holding an annual general meeting in accordance with Sec ,166 the Regional Director of the Company Law Board may (on the application of any member of the
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company ) call or direct the calling of a general meeting. He may also give directions regarding the calling , holding and conducting the meeting. Such a meeting shall be deemed to be an annual general meeting of the Company. (c) Sec 168: If the provisions of Sections 166 and 167 are not complied with the company and every officers of the company in default be fined. Maximum fine- RS 5000 for continuing default further fine 250 per day. (d) Sec 171: A general meeting may be called by giving not less than 21 days notice in writing. The annual general meeting may be called with a shorter notice if it is agreed to by all the members entitled to vote in the meeting.  The court has no power to direct the calling of the annual general Marketing. In re Coal Marketing Company of India (p) Ltd.

Extraordinary General Meeting [EGM]

The board of directors can be compelled to hold a general meeting upon request or requisition made for it , under the following conditions-Sec: 169: (a) The requisition must be signed by members holding at least 1/10th of the paid up capital of the company , in the case if companies having a share-capital ; and by members holding at least 1/10th of the total voting power in other cases. (b) The requisition must set out the matters which will be considered at the meeting. (c) The requisition must be deposited at the registered office of the Company.

The Board must , within 21 days of the receipt of a valid requisition, issue a notice for the holding of the meeting on a date fixed within 45 days of the receipt of the requisition. If the board does not hold the meeting as aforesaid the requisitions can call a meeting to be held on a date fixed within 3 months of the date of requisition.

Resolutions , properly passed at a meeting called by the requisitionists, are binding on the Company.

Statutory Meeting
Within a period of not less than one month and not more than three months from the date on which a public company is entitled to commerce business a meeting is known as THE STATUTORY MEETING has to be convened. This requirement applies to every public company limited by share.

Purpose of statutory meeting:


The object of the statutory meeting is to put the shareholders of the company at as early a date as possible, in possession of all the important facts relating to the company. In the notice convening this meeting is must be called the statutory meeting. The section accordingly requires that known as THE STATUTORY REPORT shall be sent to every member of the company at least for fourteen days before the date of the meeting.

Share

Share means a share in the capital of the company and includes stock except when a distinction between stock and shares is express are implied [clause.(v) sec 2] A share is an expression of proprietary relationship between a shareholder and the company [Commissioner of Income Tax vs Associated Industrial Com. (1969) 2 Com. L J. 19= 39 Comp. Cas. 401.] Share is a movable property, with all attributes of such property. It is well established that a share in a Company is an item of property freely alienable in the absence of express restrictions

under the articles when a mortgagor failed to pay the mortgage debt within time the mortgagee has implied authority to sale the shares [(Stubbs Vs salatter) (1910) 1 Ch. 632.]

Debentures

The issue of debentures is a particular mode of borrowing money by Companies. A debenture is a document which shows on the fact of it, that the company has borrowed a certain sum of money from the holder thereof upon certain terms and conditions. A debenture is generally issued as a part of a series. Palmer defines a debentures as any instrument under seal evidencing a deed, the essence of it being the admission of indebtedness . Sec 2(12) of the company Act states that a debenture, includes debenture stock, bonds and any other securities of a company, whether constituting a charge on the assets of the company or not .

Features of a share

Proprietary character of share: A share in a company is the expression of a proprietary relation. The shareholder is the proprietary owner of the company but he does not own the companies assets which belong to the company as a separate and independent legal entity. Rights and duties carried by a share: Although the rights and duties carried by a share are, on principle indivisible, it is often convenient to regard as a bundle of several rights and liabilities and to consider these separately. The principal right which a share may carry are . 1. The right to dividend if while the company is going concern, a dividend is duly declared.
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2. The right in the winding up of the company after the payment of the debts to receive a proportionate part of the capital or otherwise to participate in the distribution of assets of the company.

The main features of share are given below

A share is not a sum money, but is an interest measured in a sum of money and made up of various rights, contained in the contract. A share is an interest having a money value and made up of diverse rights specified under the Articles of Association The holder of a share has certain rights, duties and liabilities, as stated in the companies Act an in the Memo and Articles of a company. A share is transferable and heritable subject to regulations framed in the Articles of the company. The shares in a company is movable property, transferable in the manner provided by the articles of the company. The shares must be numbered so as to distinguish them from one another.

Types of Share
The companies Act provides that there can be only two types of shares capital--

1. Equity Share Capital 2. Preference Share Capital

Preference Share Capital


Preference shares are those shares which are given, by the articles of the company, two privileges viz., (1) Priority in the payment of dividends over other share, and (2) Priority as regards return of the capital in the event of liquidation. Sec 85 Presence Share can be classified as given below: 1. Cumulative or Non Cumulative 2. Participating or Non Participating 3. Convertible or Non Convertible 4. Redeemable or Irredeemable

Equity Share
All shares other than preference shares are called Equity share. The rights and privileges of Equity shareholders are laid down in the articles subject to the provisions of the Act.

Rights of Shareholders

The companies Act gives varies rights to the shareholders of a company. The important rights are mentioned below-

1. To receive notice of general meetings unless the articles otherwise provide. 2. To receive a copy of every balance sheet (and of the documents annexed thereto) which is to be laid before the general meeting. 3. To receive a copy of the memorandum and the articles company and after the return of the capital of all classes of shares unless preference share are given, by the term of issue, the distribution of these surplus assets.

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4. A shareholder is entitled to inspect the minutes of the proceedings of any general meeting without any charge. 5. A shareholder can transfer his share, subject to any restrictions that may be contained in the articles. 6. The holder of a Share Warrant does not ordinarily possess the right to vote, but the article of a company may give him that right. 7. Preference shareholders are entitled to get dividends. 8. Shareholders have the right to apply to the Central Government for relief and redress under certain circumstances, if the annul general meeting is not held; if there is mismanagement and oppression by the majority etc. In the letter case, the shareholder can also apply to the court. 9. The Articles of Association of a company may give various other rights and privileges to the shareholders.

Liabilities of shareholders
The liabilities of a shareholder depends on the type of the company. In a Company Limited by Shares, the shareholders are not liable to pay anything more than the normal value of the share, whatever may be the liabilities of the company. In a company Limited by Guarantee, the shareholders is liable to pay up to the amount of the guarantee and the nominal value of the share if there is a share. In an Unlimited Company, the shareholder is liable to an unlimited extent for the debts of the company. The capital clause of the Memorandum of Association contains provisions regarding the liabilities of shareholders.

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DUTIES OF SHAREHOLDERS
Duties and obligations: A shareholder has certain duties and obligations .They are summarized below: 1.A shareholder must pay the unpaid amount due on the share ,when calls are made . 2.In case of liquidation of accompany contributors Sec.426 the shareholders are to be placed in the list of

3.In certain cases a transfer of a share is still liable for the unpaid shares of accompany 4.The memo and the articles constitute a binding contract between the shareholders and the company. Sec 36. 5.ALL the shareholders are bound to follow the decision of the majority of the shareholders, unless the are guilty of mismanagement and oppression. Secs.397,398. 6.Cases of unlimited liability.

(a) Under the articles ,directors and managers can be made liable to an unlimited extent. (b) If the number of membership of the company falls to below 7 in public companies and below 2 in private company ,the existing members become liable for the debts of the company to an unlimited extent. Sec 45 STOCK: When all the shares of a company have been fully paid up, they may be converted into stock if so authorized by the articles . Sec .94(1)(c)

Conversion into stock is made because it is a convenient method of denoting the capital of the company and the interest of the members . It does not effect the rights of the members in any way . When shares are converted into stock , notice must be given to the Register. The register of members must thereafter show the amount of the stock held by the each member instead of the amount of shares . sec .150. The provisions of the act relating to shares only cease to apply to shares which have been converted into stock . Sec.96.
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The use of the term STOCK merely denotes that the company have recognized the fact of the complete payment of the shares , and that the time has come when these shares may be assigned in fragments , which for obvious reasons could not be permitted before. . Per Lord Cairns in morris v. Aylmer.

Difference between share and stock


Share and stock are two methods of denoting the interest of a member of a company .According to Sec .2(46) of the act , the term share includes a stock, except where a difference between them is expressed or implied .

The differences between share and stock is given below.


Point distinction Equality of SHARE STOCK

Transferability Payment Numbering Issuance Holding

The shares of the same company are of Stock may be divided into unequal equal nominal value. value. Shares cannot be issued or transferred in A stock can be transferred in fragments . fragments . Shares may be partly paid . Stock cannot be issued when a company is Initially formed. Shares are numbered consecutively . Stock are not numbered. Shares can be directly issued to the public Stock can not be issued directly. whereas. A member cannot hold a half share. A stock can be transferred in fragments.

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MANAGING AGENCY
The usual and normal practice is to entrust the management of a company to the board of directors. The companies act of 1996 formerly recognized and provided for four alternative forms of management , viz., (1)By managing directors of whole time directors. (2)By managing agent . (3)By secretaries and treasurers. (4)By managers . But no company have at the same time more than one of the above categories of managerial personnel . Sec.197A. The amended Act of 1969 abolished (2) and (3) of the mode from 3rd April,1970. Sec .324A.

APPOINTMENT OF MANAGING AGENT


Managing agent plays an important role in an organization. Every company shall keep at its registered office a managing agents containing with respect to the following particulars, that is to say 1.(a) In the case of an individual, his present name in full, any former name or surname in full, his usual residential address, his nationality and, if that nationality is not the nationality of origin, his nationality of origin and his business, occupation, if any, and if he holds any other directorship or directorships the particulars of such directorship or directorships; (b) In the case of a body corporate its corporate name and registered or principal office, and the full name address and nationality of each of its directors; and (c) In the case of a firm, the full name, address and nationality of each partner, and the date on which each became a partner.
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(2) The company shall within the periods specified below send to the Registrar a return in the prescribed form containing the particulars specified in the said register and a notification in the prescribed form of any change its managing agents or in any of the particulars contained in the register (3) No managing agent shall, after, the commencement of this Act, be appointed to hold office for a term of more than ten years at a time and no managing agent shall hold office for more than twenty years. (4). Notwithstanding anything to the contrary contained in the articles of a company or in any agreement with the c(a) in the case of the particulars specified in sub-section (1), within a period of fourteen days from the appointment of the first directors of the company;

(b) In the case of any change in such particulars, within a period of fourteen days from the day change takes place.

(1) The register to be kept under this section shall, during business hours and subject to such reasonable restriction, as the company may by its articles or in general meeting impose so that not less than two hours in each day be allowed for inspection, be open to the inspection of any member of the company without charge and of any person on payment of ten taka or such less sum as the company may impose for each inspection. (2) If any inspection required under this section is refused or if default is made in complying with sub-section (1) or (2) of this section, the company and every officer of the company who is knowingly and willfully in default shall be liable to a fine of five hundred taka. (3) In the case of any such refusal, the Court, on application made by the person to whom inspection has been refused and upon notice to the company, may, by order, direct an immediate inspection of the register. A managing agent of a company appointed before the commencement of this Act shall not continue to hold office after the expiry of ten years from such commencement unless than reappointed thereto.

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(5) A managing agent whose office is terminated by virtue of the provisions of sub-section (2) shall, upon such termination, be entitled to a charge upon the assets of the company by way of indemnity for all liabilities or obligations property incurred by the managing agent on behalf of the company subject to existing charges and encumbrances, if any. (6) The termination of the office of a managing agent by virtue of the provisions of sub-section shall not take effect until all moneys payable to the managing agent for loans made to or remuneration due up to date of such termination from company are paid. (7) Nothing in this section shall apply to a private company which is not the subsidiary company of a public company. There are some conditions of the appointment of managing agent. These are given bellowNotwithstanding anything to the contrary contained in the articles of the company or in any agreement with the company

(a) a company may, by resolution passed at a general meeting of which notice has been given
to the managing agent in the same managers as to members of the company, remove a managing agent if he is convicted of an offence in relation to the affairs of the company and the offence is non-bail able within the meaning of the provisions of the code of Criminal Procedure, 1898 (Act V of 1898): Provided that where the managing agent is a firm or company and offence committed by a member of such firm or a director or an officer holding a general power of attorney from such company shall be deemed to be an offence committed by such firm or company: Provided further that a managing agent shall not be liable to be removed under the provisions thereof if the offending member, director or officer as aforesaid is expelled or dismissed by the managing agent within thirty days from the date of his conviction or if his conviction is set aside, on appeal;

(b) the office of a Managing agent shall be deemed to be vacant if he is adjudged insolvent; (c) a transfer of his office by a managing agent is a firm, a change in the partners thereof shall
not be deemed to operate as a transfer of the office of managing agent, so long as one of the original partners shall continue to be a partner of the managing agent's firm;

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(d) (e)

a charge or assignment of his remuneration of any part thereof effected by a managing

agent shall be void as against the company: if a company is wounded up either by the Court or voluntarily, any contract of

management made with a managing agent shall be thereupon determined without prejudice, however, to the right of the managing agent to recover any moneys recoverable by the managing agent from the company: Provided that where the Court finds that the winding up is due to the negligence or default of the managing agent himself, the managing agent shall not be entitled to receive any compensation for the premature termination of his contract of management; and

(f) the appointment of a managing agent, the removal of managing agent and variation of a
managing agent's contract of management shall not be valid unless approved by the company by a resolution at a general meeting of the company notwithstanding anything to the contrary in section 104: Provided that nothing contained shall apply to the appointment of a company's firs agent made prior to the issue of the prospectus or statement in lieu of prospectus where the terms of the appointment of such managing agent are set forth therein.

118. Investigation of managing agents, etc. (1) If the Government has reason to believe that the managing agent of a public company-(a) has, in connection with the conduct or management of the affairs of the company, been guilty of fraud, misfeasance or breach of trust: or (b) has been conduction the affairs of the company for a fraudulent or unlawful purpose; or (c) has so conducted or managed the affairs of the company as to deprive the shareholders thereof of a reasonable return on their investment; the Government may, after giving the managing agent an opportunity of being heard, appoint and investigator to enquire into the affairs of the company and to report on the conduct of the managing agent in such manner and within such period as the Government may direct.

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Explanation.---The shareholders of a company shall be deemed to have been deprived of a reasonable return on their investment if, having regard to enterprises similarly placed for a continuous period of three years.

(2) The investigator appointed under sub-section (1)-(a) may, at any time, for the purpose of making any enquiry which he considers necessary, enter the premises of the company or the office of the managing agent and may call for and inspect the books of accounts or documents in the possession of the company or managing agent and may seal or take into custody any books of accounts or documents for so long as may be necessary; (b) shall have the same powers as are vested in a Court when trying a suit under the Code of Civil Procedure, 1908 (Act V of 1908), in respect of the following matters, namely:-(i) summoning and enforcing the attendance of any director or officer of the company or of the managing agent and examining him on oath or affirmation; (ii) compelling the production of any books of accounts or documents; and (iii) issuing commissions for the examination of witnesses; (3) Any proceeding before the investigator shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 or the Penal Code (Act XLV of 1860). (4) If the Government after considering the report submitted under subsection (1), is of opinion that it is necessary to do so in the interest of the efficient management of the affairs of the company, the Government may, without prejudice to any other action that may be taken under this Act or any other law, by order in writing

(a) modify the terms of the managing agent's agreement of management with the company. (b) require the managing agent to carry out such changes in the management or accounting procedures, within such time, as may be specified in the order; or (c) remove from office the managing agent or the director of the company nominated by the managing agent, or both the managing agent or the director so nominated:

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Provided that before taking any action under this sub-section, the managing agent shall be given an opportunity of presenting his case as to the proposed action. (5) A managing agent or director removed from office under sub-section (4), shall not be entitled to or be paid any compensation or damages for loss or termination of office. (6) A managing agent of a company who is removed from office under sub-section (4) shall not be appointed to such office of that company until after the expiration of a period of five years from the date of such removal. (7) Where the managing agent removed from office under sub-section (4) is firm or a company, no partner of such firm and no director or officer holding a general power of attorney from such company shall hold the office of a director or any other office connected with the conduct or management or the affairs of the company of which it was managing agent, until after the expiration of a period of five years from the date of such removal. (8) Where the managing agent of a company is removed from office under sub-section (4), the Government may by order in writing, appoint an Administrator, hereinafter referred to as the Administrator, to manage the affairs of the company subject to such terms and conditions as many be specified in the order. (9) The Administrator shall receive such remuneration as the Government may determine. (10) The management of the affairs of the company shall, on and from the date of appointment of the Administrator, vest in him. (11) Where it appears to the Administrator that any purchase, sales or agency contract has been centered into, or any employment given to benefit the managing agent or his nominees and to the detriment of the interest of general shareholders, the Administrator may, with the previous approval writing of the Government, terminate such contract or employment. (12) No person shall be entitled to or be paid any compensation or damages for the termination of any contract or employment under sub-section(11). (13) If at any time it appears to the Government that the purpose of the order appointing the Administrator has been fulfilled, it may permit the company to appoint another person to the office of managing agent, and on the appointment of new managing agent, the Administrator shall cease to hold office. (14) Save as provided in sub-section (15), no suit, prosecution or other legal proceeding shall lie against the Administrator personally for anything which is in good faith done or intended to be

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done by him in pursuance of this section or of any rules made hereunder, and anything so done shall be deemed to have been done by the company. (15) Any person aggrieved by any order of the Government under sub-section (4) or of the Administrator under sub-section (11) may, within sixty days from the date of the order, appeal against such order to the High Court Division. (16) If any person fails, without reasonable cause, to furnish any books of accounts or documents called for under clause (a) of sub-section (2) or to comply with any order under clause (a) of clause (b) sub-section (4) or contravenes the provisions of sub-section (6) or subsection (7) the Government may, by order in writing, direct that such person shall pay by way of penalty a sum which may extend to ten thousand taka, and in the case of continuing failure or contraception, a further sum which may extend to one thousand taka for every day after the first day during which the failure or contraception continues. (17) The Government may, by notification in the official Gazette, direct that any power conferred upon it by this section shall, subject to such conditions, if any, as may be specified in the direction, be exercisable also by such person or authority as may be so specified. (18) The Government may, by notification in the official Gazette, make rules to carry out the purpose of this section. (19) The provisions of this section shall have effect notwithstanding anything contained in any other provision of this Act or any other law, contract, or the memorandum or articles of a company.

119. Remuneration of managing agent.

--(1) Where a company appoints a managing agent, it shall, in the documents of appointment specify the following--(a) the remuneration of the managing agent which shall be a sum based on fixed percentage of the net annual profits of the company; and (b) a minimum payment, in the case of absence or inadequacy of profits, together with office allowance.

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(2) Any stipulation for remuneration additional to, or in any form other than, the remuneration specified in sub-section (1) shall not be binding on the company unless sanctioned by a special resolution of the company. (3) For the purpose of this section net profits' means the profits of the company calculated after allowing for all the usual working charges, interest on loans and advances, repairs and outgoing, depreciation, bounties, depreciation, bounties or subsidies received from Government or from a public statutory body profits by way of premium of the whole or part of the undertaking of the company, but without any deduction in respect of income-tax or super-tax, or any other tax or duty on income or for expenditure by way of intersection debentures or otherwise on capital account or on account of any sum which may be set aside in each year to of the profits for reserve of any other special fund. (4) This section shall not apply to a private company except a private company which is the subsidiary company of a public company or to any company whose principal business is the business of insurance.

123. Restriction on managing agent's powers of management.


A managing agent shall not exercise, in respect of any company of which he is a managing agent, a power to issue debentures or, except with the authority of the directors and within the limits fixed by them, a power to invest the funds of the company and any delegation of any such powers by a company to a managing agent shall be void. Managing agent not to engage in business competing with the business of managed company. A managing agent shall not on his own account an engage in any business which is of the same nature as and directly competes with the business carried on by a company under his management or by a subsidiary company of such company.

125. Limit on number of director appointed by managing agent.---

Notwithstanding anything contained in the articles of a company other than a private company, the directors appointed by the managing agent shall not exceed in number one-third of the whole number of directors.

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Managing Agents Duties

The duties of the Managing Agent shall be defined as follows:

Administrative
The Managing Agent undertakes, on behalf of the Body Corporate, to:
y y y y y y y

y y

Prepare an annual estimate of income and expenditure for submission to the Trustees and the Body Corporate for determination of monthly levies and approval; Periodically review the Budget; Open an account with a Financial Institution in the name of the Body Corporate; Assist the Trustees on replacement values of improvements for insurance purposes and arrange for valuations when requested to do so by the Trustees; Arrange for the insurance of buildings and improvements and any other insurance which the Body Corporate may require, when requested to do so by the Trustees; Assist with the submission of all insurance claims on behalf of the Body Corporate when requested to do so by the Trustees; Assist the caretaker in arranging for such repairs and maintenance of the Common Property, not requiring the advice and supervision of professional engineers, architects or other professional bodies, when instructed by the Body Corporate or the Trustees to do so and to call for quotations when so instructed; Assist the caretaker in negotiating with professional firms and others for the determination of specifications of work to be done when requested to do so by the Trustees; Assist the caretaker in negotiating with outside contractors at the request of the Trustees to perform certain services on behalf of the Body Corporate; Assist and advise the Trustees on the enforcement of the Rules adopted by the Body Corporate in terms of Section 35 of Act 95 of 1986, as amended, when requested to do so by the Trustees.

Collection
The Managing Agent undertakes, on behalf of the Body Corporate, to:
y

Collect into a Praetor Trust Account all income due to the Body Corporate including levies and any other income due from all current and future owners and to on a monthly

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y y

basis deposit surplus income into an interest bearing account in the name of the Body Corporate. All interest earned on such account shall accrue to the Body Corporate; Verify and pay all accounts due by the Body Corporate, as also to exercise control over the budget, subject to any restrictions imposed or directives given by the Trustees; Exercise credit control in respect of all amounts owing by owners to the Body Corporate to the extent of timorously addressing Letters of Reminder to owners who are in arrear and instituting legal action for the recovery of arrears and interest where necessary. In the case of serious defaulters, such legal action shall include the appointment of and correspondence with attorneys which may, inter-alia, lead to the sequestration of owners. The Managing Agent furthermore undertakes to take such other reasonable steps as may be directed by the Trustees for the recovery of arrear amounts, and interest where necessary; o The defaulting debtor shall be charged an administration fee for each reminder or demand issued by the Managing Agent. The Managing Agent will follow the procedure set out hereunder to give effect to paragraph above : o Levies are to be paid monthly in advance on or before the 1st day of each month; o Letters of Reminder will be sent by the Managing Agent to those owners who are in arrears as at approximately the 8th day of any month, or on the first working day thereafter; o A Final Demand will be sent by the Managing Agent to any owner who remains in arrears on approximately the 8th day of the following month, or on the first working day thereafter, requesting immediate payment, following which such owner will be handed over to attorneys for legal procedures to be instituted, including the issuing of Summons; o In the event of any owner being handed over to an attorney for collection, such owner will be liable for all legal fees incurred on the attorney-and-own client scale, as well as interest on arrear amounts calculated monthly in advance at First National Bank s prime overdraft rate, as may apply from time to time.

Accounting
The Managing Agent undertakes, on behalf of the Body Corporate, to:
y y y

Keep proper books of account; Prepare and submit a monthly un-audited levy schedule to the Board of Trustees reflecting the amount due by and received from each owner; Arrange the annual audit with the Body Corporate auditors and, on completion, to submit the audited statements to the members of the Body Corporate;
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y y y y

Control the monthly budget of expenses and to correlate same against the approved budget as referred to in 4.1.1 above, as and when requested by the Trustees to do so; Attend to statutory payments to the Receiver of Revenue; Grant access by appointment at all reasonable times to any member of the Body Corporate to inspect the said books and or records; Attend to the lodging of Income Tax and other Returns, as required, to the Receiver of Revenue at fees determined from time to time by the managing agent.

Secretarial
The Managing Agent undertakes, on behalf of the Body Corporate, to:
y y

y y y y y

y y y y

Attend at the Annual General Meeting of the Body Corporate; Attend at meetings of the Trustees in an advisory capacity as and when requested, but not exceeding three (3) times per year and not exceeding one hour. Additional hours or part thereof will be charged at the rate referred to in Schedule 1 to this agreement; Attend additional meetings of the Body Corporate when requested by the Trustees to do so, at the hourly rate as reflected in Schedule 1 with annual escalation as determined by Pretor will be applied from 1 June each year. Attendance at meetings by Departmental heads and/or Directors may be charged at the rates reflected in schedule 1. Keep proper Minutes of meetings attended, as referred to in paragraphs 4.4.1, 4.4.2 and 4.4.3 above, and dispatch copies of same to all persons entitled to receive such Minutes; The Trustees shall furnish the Managing Agent with copies of Minutes of all meetings of the Trustees and of the Body Corporate not attended by the Management Agent; Arrange venues of meetings, if requested to do so by the Trustees; Assist and advise the Trustees on procedural matters including, inter-alia, General Meetings, Special General Meetings, Quorums, Proxies, Resolutions, Voting Rights, amendment to the registered Body Corporate Rules and the statutory requirements of the Sectional Titles Act, Rules and any Annexure thereto; Attend to Proxies, Nominations, Agendas and Notices; Attend to the drafting and distribution of notices and circulars to owners and to queries, suggestions and complaints, as also the normal correspondence of the Body Corporate; Furnish the Trustees when requested to do so, with copies of correspondence entered into on their behalf; Maintain the Minute Books, Attendance Registers, the Register of Sectional Bond Holders, who have notified the Managing Agent of their interest, and the register of Exclusive Use Areas linked to units or sections in the scheme.

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Labour
The Managing Agent undertakes, on behalf of the Body Corporate, to:
y

Pay salaries, wages, PAYE, UIF and Workman s Compensation, etc. It is expressly agreed that the Managing Agent will employ employees on behalf of the Body Corporate when request to do so, which employees are employed by the Body Corporate and not by the Managing Agent. Any disputes which may arise between the Body Corporate and any of its employees in terms of any legislation shall not involve the Managing Agent as a party thereto and it cannot be cited as being the employer of any of the said employees in any action or proceedings as may be instituted, and is therefore not to be held liable or responsible in any way. Any payments as mentioned above, due by the Body Corporate, will be made by the Managing Agent on their behalf; The Trustees will be responsible for supplying Service Contracts, a Disciplinary Code and Grievance Procedures, as well as the conducting of disciplinary hearings. The Managing Agent can assist in this regard, when requested to do so by the Trustees; The Managing Agent will be granted the opportunity to appoint other contractors to perform the duties mentioned above, approval of the Trustees

RIGHTS OF MANAGING AGENTS


1. Enforceable of rights: The agents can enforceable all the duties of the principal. The principal s duties are the agent s rights. 2. Agent s rights of retainer : An agent may retain, out of any sums received on account of the principal in the business of the agency, all moneys due to himself in respect of advances made or expenses properly incurred by him in conducting such business, and also such remuneration as may be payable to him as acting as agent.-Sec.217 3. When agent s remuneration becomes due : In the absence of any special contract, the agent s remuneration does not become due until he has completed the act for which he was appointed agent. But an agent may detain moneys received by him on account of goods sold, although the whole of goods consigned to him for sale may have been sold, or although the sale may be complete.Sec-219.

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4. Agent not entitled to remuneration for business misconducted: An agent who is guilty for misconduct in the business of agency is not entitled to any remuneration in respect of the part of the business which he has misconducted.-Sec.220.

EXAMPLE (a) A employs B to recover Rs.2000 from C. Through B s misconduct the money is not recovered. B is entitled to no remuneration for his services, and must make the loss. 5. Agent s lien : In the absence of any contract to the contrary, an agent is entitled to retain goods, paper and other property, whether movable or immovable of the principal, received by him, until the amount due to himself for commission, disbursements and services in respect of the same has been paid or accounted for to him.

BOARD OF DIRECTORS
The Directors of a company are selected according to the Articles of Association of the Company and provision of the Companies Act. They are in charge of the management of the affairs of the company. The directors are collectively called the board of directors The board of the Company s executive authority. A directors is an officer of the company within the meaning of section 2(30). Section 2(13) states that a director includes any person occupying the position of the director by whatever name called. The number of directors to be appointed to the board of directors of a company is determined by the articles. The act provides that there must be at least 3 directors in a public company ( other than a public company which has become such by virtue of sec. 43A) and at least 2 directors in other companies.-Sec 252. The company can increase the number of directors beyond the maximum fixed by the articles provided previous sanction of the central government is obtained. Where the maximum fixed by articles is 12 or less, the number can be increased to 12 without Government approval.-Sec 259.
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APPOINTMENT OF BOARD OF DIRECTORS


1. First directors
Persons named in the articles of association as director become the first directors of the company. In case of public companies, the persons named as directors must file with the Registrar, their

consent in writing to become directors and must agree to pay for the minimum number of shares which by the articles, a director is required to have.

Person who sign the Memo


If no person is named in the articles of directors, the person who sign the memorandum of the association of the company ( and who are individuals, not companies) become the first directors.-Sec.254.

Election
The normal mood of appointing directors is election by the numbers at the annual generation meeting. The manner of holding the election must be provided for in the articles.Sec.255. 2. Appointment of directors by company According to Sec.255 directors must be appointed by the company in a general meeting.

3. Appointment of directors by the Board of directors


The Board of directors may appoint directors in the following circumstances : (a) Additional directors : The board of directors can appoint additional directors subject to the maximum number, fixed by the articles of the company. Such additional directors hold office only up to the date of the next annual general meeting of the company.Sec.260. (b) Casual vacancy : Casual vacancies among directors in public companies and private subsidiaries of public companies may be filled by the board of directors by nomination. The person appointed to a causal vacancy holds office for the period during which the directors, whose post is vacant, would have remained in office.-Sec.262. (c) Alternate directors: The board of directors of a company may, if so authorised by its articles or by a resolution passed by the company in a general meeting, appoint an
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alternative director to act for a direct during his absence for a period not less than three months from the states in which meeting of the board are ordinarily held. The alternate cannot hold office longer than the original directors and vacate his office if and when the original returns to the state.-Sec.313.

4. Appointment of directors by the third parties


The articles under certain circumstances empower the debenture holders or other creditors who have advanced loans to the company to appoint their nominees to the Board.

5.Appointment of directors by proportional representation


The articles of a company may provide for the appointment of not less than two-thirds of the total number of directors of a public company, according to the principle of proportional representative whether by the single transferable vote by a system of cumulative voting or otherwise.

6.Nomination by the Central Government


Under section 408 of the act, the Central Government can ( in case of mismanagement and oppression) nominate some directors to the board of a company as The Company Law Board may specify as being necessary to effectively safeguard the interest of the company, it s shareholders or the public interest. The directors so appointed are not required to hold any qualification shares. Besides, they are required to keep the Company Law Board informed of the affairs of the company to take such timely action as may be required.

7. Nomination in Statutory Corporations


The Government can nominate a director to the board of a company coming within the purview of the industries( Development and Regulation) Act of 1951. Certain statutory corporation possess similar powers. For example, The Industrial Finance Corporation Act of 1947empowers to corporation to nominate a director to the board of a company to which it has advanced money.

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Distribution of Liabilities among the Parties

1. Liabilities of a partner for acts of the Firm:


Every partner is liable, jointly with all the other partners and also severely for all acts of the firm done while he is a partner-Sec.25 This section lays down the rule that every partner is liable , to an unlimited extent, for all debts due to third parties from the firm incurred while he was a partner. As between the partner the liabilities adjustable according to the terms of the agreements. Thus if a partner is entitled to receive 1/4th share of profits he is liable to pay 1/4th share of the loses. There is no differences between working partners and dormant partners as regard liability to third parties. A dormant partner also is liable to an unlimited extent for all debts of the firm.

Winding Up a Company
The winding up of a company means the termination of the legal existence of a Company by stopping its business, collecting its assets and distributing the asset among creditors and shareholders, in the manner laid down in the Act. According to Professor Gower winding up of a company represents the process whereby its life is ended and its property admission for the benefits of its creditors and members.

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Bibliography
1.Commercial Law and Industrial Law .Arun Kumar sen & Jitendra Kumar Mitra 2. Company Law.. 3. Internet Explorar 4- Bangladesh Industrial Law

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