CORPORATE LAWS & PRACTICES

Time allowed – 2½ hours

Maximum marks – 100

[N. B. – Question must be answered in English. Figures in the margin indicate full marks. Examiner will take
account of the quality of language and of the manner in which the answers are presented. Different
parts, if any, of the same question must be answered in one place in order of sequence.]
Marks
1. XYZ Company Limited is a Private Limited Company having five shareholders. The Board of directors of
the company is constituted of two directors. XYZ Company Limited wants to increase its paid up capital to
Tk. 200.00 million from existing paid up capital of Tk. 100.00 million. The Board of Directors of the
Company recommended issuance of right shares for the purpose of raising the paid up share capital.
a) Describe the procedures to be followed for converting XYZ Company Limited into a Public
Limited Company. 8
b) What regulatory procedures should be followed for the purpose of raising the capital? 7
c) One of the directors of XYZ Company Limited is in ill health. He cannot attend the board
meetings of the company regularly. Moreover, he needs to stay outside the country for the
purpose of his treatment for about 2-3 months in a year. Therefore,he wants to appoint an
Alternate Director to represent him in his absence. Describe the legal procedures in this regard. 5

2. ‘A’ is a friend of B, C & D who are directors of XYZ Company Limited. B, C & D decided to take ‘A’
as a shareholder as well as a director with the object to utilize his expertise. B, C & D in their board
meeting allotted shares to ‘A’ and co-opted him as director, issued share certificates, filed Return of
Allotment, Particulars of Directors & Consent Form. Accordingly, name of ‘A’ was also shown in the
annual list of members. After some years B, C & D decided to get rid of ‘A’ because ‘A’ has now
become a burden for the company & he (‘A’) has been acting contrary to the decisions of B, C and D.
Please answer the followings in line with provisions of Companies Act, 1994:
a) Can `A` be removed from the directorship by B, C and D? 6
b) Can `A` be removed from the membership who in fact did not pay any money against the shares
issued to him? 6
c) Is there any other remedy in company law to get rid of ‘A’ as desired by B, C & D? 3

3. (a) What is Price Sensitive Information? Mention the events or transactions which will be considered
as price sensitive information. 5
(b) Discuss the procedures of issuing shares at a premium. How does the Companies Act provide for
application of `Receipts’ from premium? 5
(c) Describe the provisions of Companies Act 1994 regarding vacation of office of a director. 5

4. (a) As envisaged in the Public Issues Rules, 1998, mention the various risk factors to be disclosed in the
prospectus for IPO by a public limited company. How the proceeds of the IPO fund can be used? 6
(b) Discuss the provisions of Appeals as provided in the Securities and Exchange Commission Act, 1993? 4
(c) What is insider trading? What steps can companies take to prevent insider trading? 5
(d) State the regulations as to holding of Annual General Meeting by a listed company of Dhaka
Stock Exchange in addition to provisions of the Companies Act, 1994. 5

5. (a) Describe the circumstances under which Bangladesh Bank may apply for winding up of a bank. 6
(b) Narrate the circumstances under which the Bangladesh Bank can dissolve the Board of Directors
of a banking company. 5

6. (a) State the restrictions on payment of dividend by a banking company other than a new bank or
specialized bank. 5
(b) Discuss the procedure to be followed by the Bangladesh Bank to disqualify an auditor. 4

7. (a) Enumerate the provisions of The Insurance Act, 2010 relating to : (i) determination of premium
and (ii) collection of premium. 5
(b) Discuss the power of the Insurance Development and Regulatory Authority (IDRA) to inspect
and ask for information etc. under section 49 of the Insurance Act, 2010. 5

– The End –