Tlir draft of the Cotfipanlra 1994 is expected to be placed as a bill during the Jatiya Sangsad session begin nlng today

•According to an official source, preparations for plat ing the bill are now complete and following Its passage, the new Act will be effective, repealing the existing Companies Act of 1913

The Cabinet okayed the draft of the new Act on 29 Novembei last year However i he Commerce Ministry was asked to prepare an authentic version In English for the ben efit of the foreign Investors and entrepreneurs Accor dingly. the English version and its vetting by the Law Ministry have been done and the draft has been finalised

The new law aimed at en surlng smooth functioning of the companies Incorporates major changes In the I for ululated by the British rulers some 80 years ago

The new Act will substan tially simplify the procedure of floating new companies ' said the source, pointing out that the process under the existing Act of 1913 ix complicated and also cumbersome The Registrar of Joint Stock Companies has been fully authorised to handle matters re latkd to the formaUon of corn parties while the stales power to control them has been am ply reduced

Provisions to protect the rights of minority share hold ers in companies have also been added Under such provi

slon. one-tenth of the share holders of a company can appeal to the High Court Individ ually or jointly IT the Directors nin the company affairs against tlieir interest The court can issue necessary orders in such cases.

Other provisions to protect the Interests of the share . holders have also lieen added Payments of dividends to the share holders wtthln two months of Its declaration has been made mandatory under I tie proposed law

According to the draft, a person can continue as rnanag ing Director of a company for five years at a stretch after which he must be reappointed with the approval of the General Meeting. However, under the. draft, one cannot continue as Managing Director for more tharuJO years.

"Such provision has been incorporated to curb the coterie system in company management." said sources concerned.

The draft Act is expected to facilitate foreign investment In local companies since the related regulations have been simplified. However, any foreign company willing to cease operation in Bangladesh must notify the Registrar well in time before doing so. Under the existing Act. any foreign company can wirid up activities without Informing the authorities.

The new Act. which has been drafted to meet the present-day needs, will help to strengthen the sharp market and boost investments to a large extent, the government authorities Hope.