Explain the provision of the Companies Act 1994 relating to appointment of the auditors of a company.

There are the following rules as per the Companies Act 1994 dealing with the appointment of auditor:

A. Every company shall appoint auditors at each AGM and the auditor will hold office until the next
AGM. Provided that, no person can be appointed as auditor unless his written consent has been obtained prior to his appointment or re-appointment.

B.  Every auditor will inform to the registrar in writing his acceptance or refusal within 30 (thirty) days from the date of receipt of appointment.

C. A retiring auditor shall have right to be re-appointed at AGM, unless:

D. He is not qualified for re-appointment.

E. He has given written notice for his unwillingness.

F. A resolution has been passed at that meeting appointing somebody instead of him.

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What are the consequences of the failure by a company to hold its Annual General Meeting?

If default is made in holding annual general meeting of the company in accordance with section 81, the company and every officer of the company who is in default, shall be punishable with fine which may extend to ten thousand taka and in case of a continuing default, with a further fine which may extend to two hundred fifty taka for every day after the first day during which such default continues.

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Explain how the share capital of a company can be increased?

(1) Where a company having a share capital, has increased its share capital, beyond the registered capital, it shall file with the Registrar, in the case of an increase of share capital, within fifteen days after the passing of the resolution authorizing the increase and the Registrar shall record the increase.

(2) The notice under sub section (1) shall include particulars of the classes of shares, affected and the conditions, if any, subject to which the new shares are to be issued

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Define prospectus. State the contents of a prospectus.

Prospectus:-

A prospectus is an invitation to the public to purchase shares or debenture of a company. In other words, a prospectus may be defined as any document that includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any share in, or debentures of a body corporate. 

Prospectus has the following characteristics:

A. It is a document described or issued as a Prospectus.

B. It includes any notice, circular, advertisement inviting deposits from the public.

C. It is an invitation to the Public.

D. The public is invited to subscribe the shares or debentures of a company.

Contents of the Prospectus:-
Every prospectus issued by or on behalf of a company shall state the matters specified in Part- I of schedule 111 of the Companies Act 1994. According to the Part I of Schedule III, the following items are to be included in the Prospectus:

1. The names, addresses, descriptions and occupations of the signatories to the memorandum and the number of shares subscribed for them;

2. The number and classes of shares and the nature and extent of interest of holders in the property and profits of the company;

3. The number of redeemable preference shares intended to be issued with the date of redemption;

4. The rights in respect of capital and dividend attached to different classes of shares;

5. The number of shares fixed by the articles as the qualification of director;

6. Particulars regarding directors, managing agents, manager, secretaries and treasures etc;

7. Remuneration of the directors;

8. The minimum amount of subscription and amount payable on application;

9. Time of opening of subscription list;

10. Preliminary expenses incurred;

11. Particulars regarding purchase of property;

12. Details of any premium or under-writing commissions paid;

13. Particulars of reserves including reserve capital;

14. Nature and extent of interest of every director and promoter;

15. Names and addresses of the auditors of the company;

16. The nature and extent of restrictions upon members at company meetings;

17. Restrictions upon Powers of the directors; and

18. Voting rights, capitalization of reserves and surplus of revaluation.

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State the points of difference between the Memorandum of Association and the Articles of Association of a Limited Company

The differences between the Memorandum and Article of Association are as follows:

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