Protecting Your Ideas

» Registration, Zoning, Licensing and Taxes

» Step One: Choosing the Right Legal Structure
» Step Two: Fictitious Name
» Step Three: State Licensing
» Step Four: Federal Employer Identification
» Step five: Local Licensing
» Insurance

Patents
Original machines, technical processes or methods, manufactured items, and chemical
compositions may be patented. “Utility patents,” for inventions with movable parts,
remain in effect for 20 years; “design patents” are effective for 14 years. The key
elements of patent applications are “claims” which describe all essential features that
distinguish the new invention.
Trademarks
Words, symbols, names, interest domain names, packaging and labeling that distinguish
one business’ products from another business’ products. Although registration provides
greater protection, trademarks that are not registered still legally protect owners. A
trademark or service mark may be registered through the Bangladeshi business.
Copyrights
Original writing, musical works, artistic designs and other works of expression are
protected under federal copyright law, which gives the author exclusive rights to use the
works.

Step One: Choosing the Right Legal Structure

To get a business up and running, you must first decide on its legal structure. The choice
determines what kind of taxes the business must pay, who is liable, and what forms to
file. Out-of-state corporations are considered foreign corporations and need to file
incorporation documents to do business in Florida. The following are brief definitions of
legal structures. It is recommended you consult with an attorney or accountant to
determine the best structure for your business. To find an attorney best suited to your
needs call the Lawyer Referral Service of the Collier County Bar Association, (239) 774-
8711,
General Partnerships
A partnership exists when two or more persons join together in the operation and
management of a business venture. Partnerships, like sole proprietorships, are subject to
relatively little regulation and are fairly easy to establish. Under a general partnership,
each partner is liable for all debts of the business. All profits are taxed as income to the
partner based on the percentage of ownership. The downside of a partnership is that each
partner has unlimited personal and financial liability without the protection of a
corporation.
Limited Liability Companies (“LLCs”)
An LLC combines selected corporate and partnership characteristics while still
maintaining status as a legal entity distinct from its owners. As a separate entity, it can
acquire assets, incur liabilities and conduct business. As the name implies, however, it
provides limited liability for the owners. LLC owners risk only their investment. Personal
assets are not at risk.
Sole Proprietorships
Easy to set up and easy to disband. The profits are taxed at the owner’s individual federal
tax rate, with the amount reported on Forms 1040 Schedule C or Schedule C-EZ. Sole
proprietorships do not file Florida corporate income tax returns, but owners have
unlimited personal liability for any debts or other obligations the business incurs. In
Florida, the state’s Homestead Rights laws limit liability, preventing creditors from
seizing an owner’s home. To understand the federal income tax implications of the above
legal structures, the following Internal Revenue Service publications are available online:
Step Two: Fictitious Name
A Fictitious Name registration is required of individuals who do business under any name
other than their legal personal name or under a properly registered corporate name,
partnership, trademark or service mark. Applicants may contact the Division of
Corporations or check the website for a complete index to see if the name is already in
use. (Keep in mind that if you are going to put your business on the web, you may want a
business name that is also an available website domain name. You can easily check this
by searching for your proposed “.com” name.)

Step Three: State Licensing

Florida requires state licenses or certificates of competency for many professions and
occupations, ranging from hairdressers to accountants to day care workers. Many require
special training and prior examinations. The Florida Department of Business and
Professional Regulations has jurisdiction over most occupations, but some fall under the
jurisdiction of other state agencies.
Step Four: Federal Employer Identification
All businesses, with the exception of most sole proprietorships, must obtain a Federal
Employer Identification (EIN) from the Internal Revenue Service.. An assistor takes the
information, assigns the EIN, This registration is required even though a business may
not have employees. An SS-4 form can be completed online by going to www.irs.gov and
looking for Employer ID Numbers under the section Business, and once an EIN is
successfully submitted the EIN is assigned. Taxes on your business and other federal or
state reporting requirements will depend on the nature of the business, its form of legal
structure, and whether or not there are employee

Step Six: Local Licensing

All businesses, no matter where they are located, must have zoning approval. Check with
city or county zoning offices (telephone numbers are listed under below) to determine
appropriate business zoning and business uses for a particular business location
(including residential locations). In addition, some locations may require the payment of
impact fees if the prior use is not compatible.
Once zoning approval has been obtained, occupational licenses are required for all
businesses and are issued by both the cities and the county. The local occupational
license grants the privilege of engaging in or managing any business, profession or
occupation within Collier County. Certificates of Use and/or zoning permits are also
required to operate a business in particular areas and give authorization to occupy a
particular location
Zoning
The City of Naples and Collier County both require that new businesses meet building
and zoning requirements, as well as a fire inspection. Send the address of your proposed
business to the City of Naples Finance Department to determine if it is in the City of
Naples proper. If your business is not located inside the city of Naples, you will not need
a city license, however, you may still need a state license and you will always need a
county occupational license when operating in Collier.

Collier County Fire Inspections:

If you open your business at a commercial location you will also need to have your
building inspected by the local fire department. Contact your local fire department to set
up an inspection time. At the end of Appendix I is a list of contacts for Collier County
Fire Departments.
Municipal Licensing
A state license may be needed prior to applying for a city license, so check with either the
state to find out if you need one. Fill out license application form. Forms are available
from the City Finance Department office or from their website but must be filed in
person.
County Licensing
County Occupational License required for all areas in Collier County. If the business is
located in the city of Naples, Marco Island, or Everglades City, a county occupational
license must be obtained after the issuance of a municipality license, and a copy of the
municipality license must be provided.
Business Insurance
Like home insurance, business insurance protects the contents of your business against
fire, theft and other losses. Contact your insurance agent or broker. It is prudent for any
business to purchase a number of basic types of insurance. Some types of coverage are
required by law; others simply make good business sense. The types of insurance listed
below are among the most commonly used and are merely a starting point for evaluating
the needs of your business.

CLOSING A BUSINESS
General Considerations
Closing a business operation can be simple or complex. Some relevant factors include the
type of business activity conducted, the scope of the business activity, whether other
business activities of the entity are to be continued, and by the number, type, and
disposition of employees. This article outlines the considerations generally relevant to the
orderly process of discontinuing a business.

Jurisdiction
Since government in the U.S. is a federal system, the law of each state in which business
is conducted as well as applicable federal law must be considered.

Review all legally operative agreements

All legally operative agreements should be ascertained and reviewed. Such agreements
might include governing instruments for the operating business entity such as corporate
minutes or partnership agreements, leases, contracts as either a vendor or purchaser, notes
and other financing documents, and employment agreements. If obligations are imposed
which continue past the time of proposed termination of business activity, early
termination provisions (if any) should be examined carefully to ascertain their precise
requirements, and plans should be made and implemented to satisfy those requirements.
If no unilateral early termination is permissible, plans should be made and implemented
to satisfy the obligation, or a negotiated early termination investigated. It is frequently
possible to negotiate an early termination of an obligation at much less cost that a simple
breach of the obligation. When such a negotiation is successful, it is important to reduce
the agreement to a writing signed by each party.

Timeline
Business requirements and legal requirements each impose time constraints. It is
preferable to commence the legal actions advisable in discontinuing activity as soon as
possible after a preliminary decision has been made. The initial review of operative
agreements will indicate whether notices must be given or other actions taken, and the
period which must elapse before those actions become effective. Typically it is wise to
allow no less than six months for analysis, planning, and implementation.
Formal communication of required notices
It is important that all required notices be communicated in writing, and that evidence be
preserved that the notice was received. The most common means of accomplishing this is
to mail each notice by certified mail, return receipt requested. When the return receipt is
received by the sender, it should be attached to a photocopy of the notice delivered and
be retained with the other permanent records of the sender.

Ongoing requirements even after discontinuance of active business

Since some claims against the business may not become known until after operations
cease, appropriate arrangements should be made to preserve the ability to respond when
such claims are asserted. Although the limitation period for the assertion of claims varies
both by jurisdiction and by type of claim, plans should be made which allow notice for at
least four years after the termination of activity.
It is important to maintain an agent for contact and service of process. Without such a
designated agent, those previously conducting the business may not receive actual notice
of the asserted claim and have the opportunity to dispute its validity. If undisputed, the
claimant may be able to obtain a judgment enforceable against those previously operating
the business. Legal counsel may be retained to serve in this capacity, or other commercial
services are available.

Business entity
In all cases except a sole proprietorship, a decision must be made whether to terminate
the existence of the legal entity conducting the business, as well as ceasing operations. In
general, it is preferable from a legal perspective to continue the existence of a business
entity, particularly where the entity was originally chosen in order to limit the personal
liability of owners. While in general the liability of owners after dissolution is limited to
the assets received on dissolution, proving the assets and their value may be difficult
should a claim be asserted following dissolution.
Defending claims following dissolution may also be more difficult as a practical matter,
since each distributee on dissolution (the former shareholders) will usually be joined in
any suit, requiring a defense not only of the entity, but potentially of multiple interest
owners.
Termination of an entity may also have adverse federal income tax consequences. For
example, a corporation which own appreciated real property may cause the recognition of
gain to the corporate owners on dissolution, even if the property is not sold. Thus the
income tax consequence of termination should be analyzed carefully and considered
when making a decision regarding continuation or dissolution.
Where the choice is made to discontinue existence of an entity, appropriate formal action,
such as filing articles of dissolution in the jurisdiction in which the entity was created,
should be taken to preclude the accrual of additional taxes and other filing requirements.
Appropriate arrangements should be made for the maintenance and safekeeping of the
legal and accounting records of the entity.

Real Estate
Arrangements should be made for the sale or management or real property. Since real
estate sales transactions are generally governed by state law, care should be taken to
conform to the requirements of the jurisdiction in which the property is located.

Personnel
While generally the employer-employee relationship will be governed primarily by the
agreement between the parties, whether written or oral, jurisdictions vary greatly
regarding the protection afforded employees on termination. The personnel policy and
procedure manual of the organization and local law should be carefully reviewed to
assure that the employment relationship is "at will," and if not, that all requirements for
termination are adhered to strictly. Care should be taken to implement the termination of
employees in a non-discriminatory manner. Notice should be given uniformly by class of
employee. While the amount of prior notice is a business decision, from a legal
perspective a longer notice period minimizes the likelihood of termination related claims.

Retirement and other employee benefit plans must be terminated or provision made for
continuation in accord with federal law or substantial penalties may be incurred.
Importance of N.I. Act:
Negotiable instruments play a very important role in the day-to-
day transactions around the world. Not only the business and
industry but also the common people are increasingly using these
instruments in payment of debts.

Kinds of Negotiable Instruments:

Accordant to the negotiable instruments Axt-1881,there are only
three negotiable instruments, namely: (a) Promissory notes, (b) Bill
of exchange and (c) Cheques.

Features of Negotiable Instruments:

1. Transferability: the negotiable instruments are freely
transferable either by mere delivery (in case of bearer
instruments ) or by endorsement and delivery (in case order
instrument)
2. Ownership: a person taking a negotiable instrument in good
faith and for value is not affected by any defect in the title of
the transferer, even if that transferor is a thief.
3. Presumptions: in case of negotiable instruments, certain
presumptions always work unless proved otherwise.
Insolvent To Be Discharged From All Liabilities:
The court, in case of an insolent who is a individual, can order
discharging him from all demands, dues and liabilities as per
provisions o the section-39
In case of declaration of insolvency by the court, the declared
insolvent will file a petition before court within 60 days of such
judgment for discharge from liability will not however, be
discharged from the following liabilities (section-51)

Duty Performed In Good Faith

No civil, criminal or other proceedings can be drawn by any
insolvent or aggrieved party against the government, receiver or
any individual who has discharged his duties in good faith under
this Act (Section-113)

Contract Act-1872
Why Necessary For Bankers?
Contract is a very familiar word. For any individual, it is
essential to know the elements of a contract if he is engaged in
business or in buying and selling goods and properties. It is
equally, If not more, essential for a bender to know the elements
of a contract because a bank frequently enters into contract with
the depositors, customers and borrowers. Hundreds of people
open accounts with the banks. Opening of accounts is in fact
entering into contract. The relationship that arises between the
depositor and a bander is essentially contractual. Both the
porters i.e. band and the account holders are bound by this
contract. Similarly when a baker advances money to the
borrower, he actually enters into a contract with the borrowers
who undertake to repay. That is why a borrower is called a loan.
In view of this, it is essential for a banker to have some
knowledge about the law of contract since all contracts are
poverned by this law. It may be mentioned here that the Indian
contract Act of 1872 (Act IX of 1872) in the foundation of law
of contract.
 Essential Elements of Contract:
A valid contract has certain features. Without these features
elements, it can bot be a contract. The essential elements of a
valid contract are as follows.

Law of Agency:
Why study Law of Agency?
Everyday thousands of cheques are collected by one bank from
the other though clearing house. This service is provided by the
banks as agents of the accountholders (principal). Similarly
banks act agents in cases of other services also. Banks act as
agents while: (a) Selling shares of limited companies, units
certificates and mutual fund of the I.C.B. and other investment
companies, (b) Crediting accounts on behalf of any employer
(c) Paying dividend on behalf of companies and (d)
Discharging similar other functions. Since in such cases, agent
and pricncipal relationship are created between the bank and its
customers, all bankers should have some idea about the low o
agency.

The Limitation Act-1908

Law of limitation has prescribed a time limit within which a
creditor has to claim for repayment of a debt by a debtor, a banker
needs to be well informed about such time-bars.

Subjects Covered By The Act

The limitation Act-1908 comprises 29 sections only. Part- 1 and
part-II incorporate two and nine sections respectively whereas part-
III incorporates fourteen sections. Part-IV incorporates only three
sections and the part-V incorporates only one section.

Period of Limitation relevant To The Banks:

The Act has prescribed time limit for various types of claims
(right) within which the existing right can be enforced in the our of
law. After such period of limitation, no suit is maintainable in the
courts. Among the various time-limits prescribed in the first
schedule of the Act, the period of limitation of suits relevant to the
banks only are given below.

Partnership Act-1932
Why Law of Partnership For Bankers:
Hundreds of partnership firms/concerns approach the banks
everyday for opening accounts as well as for availing of various
services. Frequently they also approach the banks for loans and
advances. Since a lot of legal implications are involve in case of
opening of accounts or extending credit to partnership firms,
bankers are well advised to have some preliminary idea about the
law of partnership Act-1932 contract the law of partnership. Basis
of partnership is the contract Act-1872 are also applicable to
partnership films unless those are inconsistent with the express
provisions of the partnership Act.

Companies Act-1994
Importance of companies Act To Bankers:
Banks transactions with the accountholders or borrowers. They are
also the biggest source of income to the banks. While dealing with
them bankers are to be very careful since they are legal persons
involving legal implications every time.

Towards Companies Act-1994

First Indian Act with regard to the companies was joint stock
companies Act of 1850. Acts relating to the companies were
Pakistan took the companies Act-1913 as a bae, so did time
depending on situation. In 1994, companies Act was substantially
revised and companies Act was substantially revised and
companies Act-1913 was completely replaced by the new
companies Act-1994

Formation of company:
For lawful purposes, seven or more persons in case of public
company and two or more persons subject to a maximum of 50
people in case of a private company can form a company after
having signed the Memorandum of Association (M.A.) and
observing formalities for incorporation under this Act. They can
form limited or unlimited companies of the following types:
1. Company limited by shares: It is a company, the liability of
the shareholders of which is limited to the extent of unpaid
value of the face value of shares it any.
2. Company limited by guarantee: It is a company
shareholders of which are promise bound by the
Memorandum of Association to pay out of their assets a sum
specified therein in the event of liquidation of the company.
3. Unlimited company: It is company, liability of the
shareholders of which is unlimited.
It would appear from above that there may be three types of
companies, namely: (a) unlimited company. (b) Company
limited by guarantee and (c) Company limited by shares
(private limited and public limited company).

Memorandum of Association ( M.A.)

Memorandum of association is the basic and vary impotent
document of company. It is in fact the constitution of the company
like the constitution of a country. On the other hand, Articles of
association of a company is a subsidiary document to the
Memorandum of Association.
1. Memorandum of company limited by shares: The
Memorandum of association of a company limited by shares
will contain the following: (a) company’s name with the
word limited, (b) Address pf registered office, (c) Company’s
objectives, (d) Statement that the liability of the shareholders
is limited, (e) Amount of capital, number of shares with the
 value of each share, (f) All sponsors signing Memorandum
must subscribe at least one share each.
2. Memorandum of company limited by guarantee: The
Memorandum of Association of such company will include:
(a) Company’s name with the word limited (b) Address of
registered office, (c) Company’s objectives, (d) Statement of
the liability of the shareholders is limited by guarantee, (e)
Statement that the shareholders are promise bound to honor
claims of specifies amount in case of liquidation, (f) amount
of capita, number of shares with value of each share if the
company has share capital.
3. Memorandum of unlimited company: The Memorandum
of Association of an unlimited company will contain: (a)
Name (b) Address (c) Objectives (d) Shareholders, if there is
share capital, signing the Memorandum will subscribe at least
one share each (e) number of shares of each shareholder.

Change of Memorandum:
Memorandum of Association may be changed by a special
resolution through Court for specifics purposes as given in the
Act section-12

Use of the word ltd:

All public limited companies must use the word ltd after its
name. If it is a private company it must use the word ‘Pvt’
However, instead of ‘Ltd’ many companies use the word ‘LLC’
or ‘PLC’ in many countries.
A company may be permitted by the Government not to use the
word ‘Ltd’ if it is engaged for furtherance of trade, arts, above
purposed and does not declare dividend.

Registered office of company

A company must have a registered office so that all
correspondences/communication/notices may be making to it.
Section-77(1). Registered office may also be called corporate
office. However, its popular names Head office.

Partnership And Company

1. Company is registered under the companies Act-1994

Minimum Maximum
Partnership 2 20
Pvt. Limited co. 2 50
Public limited co. 7 Limited by Number of
shares

Statutory Meetings of Company:

The Companies Axt-1994 provides for some necessary meetings
of the company, namely: annual general meeting (A.G.M.)
statutory meetings, extra-ordinary meeting.

Statutory Book of Company:

As per provisions of the companies Act-1994, a company has to
maintain some statutory book and records. These are: register of
members, index of members of the company, annual list of
members, register of directors and managers register of
mortgages and charges, book of accounts minutes book etc.
[sections-34(1),35,36,115(a),174,181 and 89 (4)]
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Company Law initiates with Act 43 of 1850, which was based on the English
Companies Act of 1844, making it possible, for the first time, to incorporate and
register a company without obtaining a royal charter. Under the Indian Act, the
supreme courts in the presidency towns of Calcutta, Bombay and Madras were
authorised to order the registration of unincorporated companies of partners
associated under a deed containing a provision that the shares were transferable.
The privilege of limited liability was not conferred upon by this Act, although a
company was permitted to sue and be sued in its registered name.
In 1857, an act for the incorporation and regulation of joint stock companies and
other associations either with or without limited liability of the members thereof
was passed. But under this Act the privilege of limited liability was not extended
to a company formed for the purpose of banking or insurance. This disability
was removed by the Act of 1860, based on the English Companies Act of 1857.
Then, following the English Companies Act of 1862, a comprehensive act was
passed in India in 1866 for consolidating and amending the laws relating to the
incorporation, regulation and winding up of trading companies and other
associations. Between 1866 and 1913, various amendments in the Indian law
were made following similar changes in England. The law relating to companies
was re-enacted in a comprehensive form in the Companies Act of 1913. This
Act was principally based on the English Companies (Consolidation) Act of
1908. Between 1908 and 1936, small amendments were made in the Act of
1913. The Indian Companies (Amendment) Act, 1936 introduced important
provisions in the Act of 1913 in the light of the English Companies Act, 1929.
This Amendment Act of 1936 also recognised for the first time the system of
managing agencies in the subcontinent.
After the partition of India (1947), India passed a new comprehensive Act in
1956, based primarily on the English Companies Act, 1948 and the suggestions
made in the Bhava Company Law Committee Report. During the Pakistan
period a Company Law Commission was set up and it suggested amendments in
1962 in the light of the English and Indian amendments, and subsequently some
amendments were made. The Securities and Exchange Ordinance, 1969 was the
most important piece of legislation incorporating corporate activities during this
period. It supplemented the Capital Issues (Continuance of Control) Act of
1947, giving extensive powers to the controller of capital issues.
After the emergence of Bangladesh a Company Law Reforms Committee was
set up in 1979, comprising leading government servants, chartered accountants
and lawyers. The committee made many recommendations for changes in
company law but not until 1994 was a new comprehensive act passed by Jatiya
Sangsad. The Securities and Exchange Commission Act of 1993 created the
SECURITIES AND EXCHANGE COMMISSION which oversees the issue of capital. Its
primary purpose is to protect the investing public in corporate investments. It
has been given extensive powers to make rules and regulations. Its
responsibilities include those of the Controller of Capital Issues under the Acts
of 1947 and 1969.
The essential elements of company law are the concepts of the company as a
separate legal entity, irrespective of the closeness of the shareholders, investor
protection, management of a company and the modes of winding up, and
accounts and securities trading.
Artificial personality An incorporated company has an artificial personality
distinct from its members. Corporate personality became an attribute of the
normal joint stock company at a comparatively late stage, and it was not until
the celebrated case of Salmon vs Salmon (1897) that the English House of Lords
held that a company which was composed of seven members, all of them
belonging to a family of husband, wife and children, was in the eyes of the law a
different personality from its members so that a debenture created and issued in
favour of the master of the house by the company would be a valid transaction.
The courts, however, made exceptions to this rule of a separate personality of a
company, especially in the fields of tax and fraud. But this principle still holds
good and the Appellate Division of the Supreme Court in the case of Rujab Ali
vs Mokarram Hossain (1977) held, while reconfirming that a company is a
separate personality, that a shareholder has no direct interest in the property of a
company.
The permanence of the general constitution of the company is secured by the
memorandum of articles which cannot, save as provided by the act, be modified
or altered. Neither can the articles authorise the company to do anything which
is expressedly or implicitly forbidden by the act, e.g to pay dividends out of the
capital, nor take away from the company or its members any rights conferred by
the Act, i.e the right of a member to petition to wind up the company. Subject to
these limitations the articles may contain such regulations for the management
of the company as the original incorporators think fit. The articles constitute a
network of rules regulating the affairs of the company. Each article is a rule for
the regulation of the relations between the company and its shareholders and
relations between the shareholders and the management. The articles may
explain the memorandum in case of ambiguity.
The memorandum of association is the basic constitution of the company. The
shares may be of the smallest nominal amount, and one share is enough to
constitute membership. There is nothing in the act requiring that the subscribers
shall be independent or unconnected, or have a substantial interest, or have a
mind and will of their own, or that there shall be anything like a balance of
power in the constitution of the company. If there are seven or, in the case of a
private company, two members the law is complied with. The word 'person'
includes a body corporate and a company may be a member in another
company. Foreigners may be the shareholders subject to conditions laid down
by the Bangladesh Bank and the Board of Investment. There is at present almost
no restriction on foreigners becoming shareholders although the Securities and
Exchange Commission may lay down conditions about the sale of their shares in
case they buy quoted shares of primary issue.
The memorandum and articles of association form the constitution of the
company and Section 26 prescribes that every member of the company is
entitled to a copy of these documents on payment of a fee. To ensure that a
member is not misled, the law further requires that any alteration of the
memorandum and articles of association should be incorporated in those
documents. The High Court Division had a verdict to this end that there is no
provision in the companies act to correct clerical errors in the memorandum or
articles of association, and these may be amended with the court's approval
where needed.
Investor protection and accounts The concept of investor protection
encompasses the notion that a company must have its accounts audited and
place them at least once before the annual general meeting of shareholders
(Section 183 of the Companies Act 1994). The Act further provides that the
company shall furnish the informations that the balance sheet and the audited
accounts of the company contain.
The law requires that a public company must publish a prospectus at the time of
inviting subscriptions for shares or debentures in the company, and this
document contains particulars of those in management, the project for which the
money is required, and the general financial background of the company
(Section 135 of the Act of 1994). If the company is listed in the stock exchange,
the prospectus must be approved by the Securities and Exchange Commission.
The act provides for investigation by the registrar of joint stock companies on its
own or on complaint by shareholders holding one-tenth of the issued shares; but
in practice this is a rare phenomenon in this country. However, Section 233 of
the Act of 1994 specifically provides for protection of minority shareholders
where the affairs of the company are being run in a manner prejudicial to the
interests of a shareholder or the petitioners who must hold one-tenth of the
issued share capital. The concept of minority protection is new, and judges are
yet to lay down decisions which would really entrench the minority
shareholders' position in the company. A shareholder may also petition the
Court if he can show that it is just and equitable to wind up a company.
Management of a company A company is managed by its board of directors.
The powers of the board are generally contained in the articles of association of
the company, and where the powers are given to the board the general meeting
has no authority to interfere in the management. The general body of
shareholders has ultimate control in a sense that they may remove the board and
replace them by a body of persons after their liking, but until then the board is
the supreme managing body. The functions of the general meeting are generally
confined to amending the memorandum and articles of association of the
company, passing the annual balance sheets and the audited accounts of the
company, electing directors in place of those who retire at the general meeting
etc. The articles sometimes vest the managing director with plenary powers of
management where the founding entrepreneur desires to keep control of the
management, but the Act now provides that a managing director cannot be
appointed for more than five years at a time, and his appointment must be
ratified by the general meeting. In law, however, he remains a servant of the
company and the board may dispense with his services, if necessary, on
payment of compensation if there is a service contract.
Managing agents The country is witnessing the gradual elimination of an
important feature of the management of the companies i.e. the managing agency
system which was peculiar to the subcontinent and had been a direct legacy of
the British economic colonisation. The origin of the system lies in early British
contacts with India. The servants of the EAST INDIA COMPANY used to do business
on their own, sometimes by appointing their own agents. The board of directors
of the East India Company turned a blind eye to this, and very soon it became an
accepted practice to have a business started by a managing agent. The function
of these mercantile houses primarily consisted in importing British goods and
exporting Indian goods and raw materials as agents of British agents or firms. In
addition to their commercial or trading functions, the Calcutta mercantile houses
also carried on financial activities and were responsible for introducing modern
banking in India as an extension of trade in the European community there.
These houses later frequently acted as investment bankers, and provided funds
for the establishment and operation of indigo plantations, tea gardens and jute
mills. Such was the importantee of some of those mercantile houses that their
managers were sometimes called 'merchant princes'.
The managing agency houses took advantage of the expanding English
commerce and there was a mushrooming of business in India. The managing
agency houses supplied directors to look after the British company's interests in
India, and soon it became an invariable practice for newly formed companies to
entrust their business in India to these managing agencies, who looked after the
company's interests, while the investors and the board of directors in England
quitely enjoyed the fruits of their enterprise without having to bother about
management. In return, the managing agency houses were remunerated
handsomely on the basis of fixed pay and commission. Thus the managing
agency system is purely a product of British colonisation of India. Able Indian
merchants followed in the footsteps of English mercantile houses; Parsis,
Gujaratis and Marwaris promoted companies of which they became the
managing agents.
The SWADESHI MOVEMENT of 1905 gave added impetus to indigenous business and
many new companies were founded, and these were controlled by existing
managing agencies. The managing agents rendered valuable services by
providing money and technical know-how in an emerging market, and it was a
common feature for an enterpreneur to call upon a managing agency for
assistance. Strangely enough, not until 1936 did the legislature think it fit to
insert provisions in the then Companies Act of 1913, which restricted the
amount a managing agent may charge by way of commission. With the
emergence of Bangladesh the entrepreneurs were able to start their own
business, and this system is getting a natural death in this country. India still has
a few managing agents.
Winding up A company may be wound up either voluntarily or compulsorily by
the court. Usually the Company Bench of the High Court Division is crowded
with petitioners who seek to wind up a company either on the ground that it is
unable to pay back debts (Taka five thousand remaining unpaid for three weeks
inspite of a notice to pay) or that it is just and equitable that the company should
be wound up became of a deadlock in the management, fraud and oppression etc
of shareholders. Generally if a company is wound up a liquidator is appointed to
take over the assets of the company. The liquidator winds up the business of the
company, pays the creditors, and distributes the surplus, if any, to the members.
In practice the assets are sold at a pittance, and the creditor who petitioned the
court for winding up the company ends up with nothing or very little.
 Jurisdiction The High Court Division exercises special statutory jurisdiction to
try matters under the Companies Act. Under Section 3 of the Companies Act, an
application relating to the company should be made to the original side of the
High Court Division. The case of Murshed C.J and Abu Sayeed Chowdhury of
Dacca Jute Mills Ltd vs Satish Chandra Banik and others (1967) are decided by
way of special statutory jurisdiction conferred upon the Court by the Act itself.
However, in the case of Md. Shamsuzzaman Khan vs M.S. Islam (1976) it was
held that Section 3 of the Companies Act only gives certain jurisdiction to the
High Court for resolution of the disputes under the Companies Act. If the nature
of the dispute which is being litigated upon is entirely a civil dispute, it can only
be decided by a competent civil court.
Securities laws The laws relate to shares and debentures traded in the stock
exchanges. There are two stock exchanges in the country, in Dhaka and
Chittagong. The Securities and Exchange Commission created under the
Securities and Exchange Commission Act of 1993 is entrusted with the task of
ensuring proper issuance of shares and debentures to protect the interests of
investors in securities and to promote the development of, and to regulate, the
capital and securities market. The history of securities laws in Bangladesh, as in
other countries, follows the development of this branch of law in the United
States of America.
After the great Wall Street crash of 1929 the Democrats promised sweeping
changes in the laws relating to sharemarkets and dealings, and two laws were
passed in the USA in 1933 and 1934 creating the U.S Securities and exchange
Commission which has earned since then a good reputation as a protector of the
American economy. In Pakistan the Securities and Exchange Ordinance
provided for banning of fraudulent activities in share trading, but the law was
not applied seriously until 1996. [M Zahir]

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conclusion

We have to maintain some procedures stating a business in Bangladesh. The procedures

must be legal. There are different procedures for different business. Some Procedures
followed by the government rules and other’s maintaining the organizational stand. It
make by the different types of business. The procedures make the organizational structure
strongly. Many procedures work as backbone of an organization.