Introduction: Company is any entity engaging in business, such as a proprietorship, partnership, or corporation.

Company is a form of business under the Company Act, 1994. Types of Company: Companies are two types, e.g., Private Limited Company and Public Limited Company. Private Limited Company: A Private Limited Company is limited by shares. The members' liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold. The maximum number of members is 50. Public Limited Company: A Public Limited Company can issue the share and debenture. There is no restriction for maximum number of members, but total number of shares is fixed. A Private Limited Company cannot sell shares to the public, i.e., it cannot raise capital from floating on the stock market. A public limited company can sell shares to the public. That is the main distinction. Illustration: A company is a separate legal entity and, therefore, is separate and distinct from those who run it. The shares in a company are owned by its shareholders. In a Limited Company, the shareholders' liability will be limited. So, incase of additional lose exceeding capital, shareholders will not bear that additional lose which will be settled by Insolvency Act, 1997. When a company is growing, the biggest hurdle is often raising enough money to expand. Owners generally have two options to overcome this. They can either borrow the money from a bank or venture capitalist, or sell part of the business to investors and use the money to fund growth. Taking out a loan is common, and very useful to a point. Banks will not always lend money to companies, and over-eager managers may try to borrow too much initially, wrecking the balance sheet. Factors such as these often provoke owners of small businesses to issue stock. In exchange for giving up a tiny fraction of control, they are given cash to expand the business. In addition to money that doesnt have to be paid back, going public [as its called when a company sells stock in itself for the first time], gives the business managers and owners a new tool: instead of paying cash for an acquisition, they can use their own stock. Incorporatization of a Company: Registration Requirements Details: Procedure#1: Verify the uniqueness of the proposed company name with the Registrar of Joint Stock Companies and Firms Time to complete: 1 day Cost to complete: BDT 100 Comment: To file the company name, an application in plain paper is required, along with the resolution approved by the promoters or sponsors of the proposed company on proposed corporate names, authorized share capital to be paid in, and the names of proposed chairs/directors/shareholders who have agreed to subscribe to shares of the proposed company.

The application is submitted, by any person authorized by the promoters or sponsors of the proposed company, to the Registrar of the Joint Stock Companies, who verifies and confirm the availability of the proposed name for new registration. The Registrar publishes reserved and rejected company names on a daily basis. Application forms can be downloaded from the Registrars Web site (http://roc.gov.bd), which also provides fee schedules and model forms for the memorandum and articles of association. The search for the company name was computerized in 2003. Procedure#2: Buy adhesive stamp from Treasury for memorandum and articles of association Time to complete: 3 to 4 weeks Cost to complete: BDT 2000 Comment: Special adhesive stamps of value BDT 500 must be affixed to the memorandum of association regardless of the companys authorized capital. For the articles of association, the value of the stamps is BDT 1,500, 4,000, and 10,000 for authorized capital of BDT 1 million, BDT 30 million, and above BDT 30 million respectively. Special adhesive stamps are available from the Treasury for the production of receipt of payment to the Bangladesh Bank. Since 2006, the time required to obtain adhesive stamps from the Treasury has increased owing to stronger enforcement of the stamp verification procedure. According to internal process, once the applicant requests the stamps, the Treasury checks with the Accountant General, who sends notice to Registrar of Joint Stock Companies and Firms (RJSC). Procedure#3: File documents with the Registrar of Joint Stock Companies and Firms for registration Time to complete: 2-3 days Cost to complete: BDT 2115 registration fees + 1200 registration filing fees Comment: For filing the memorandum and articles of association, the company pays fees based on the companys authorized capital. For a company with a capital of BDT 318320, the cost is BDT 3315 (BDT 2115 registration fees + 1200 registration filing fees). Fees are paid at the Registrar along with the following documents: (a) name clearance certificate; (b) three copies of the memorandum of association; (c) three copies of the articles of association (d) forms I, VI, IX, X, and XII; (e) encashment certificate (for nonresident subscribers); and (f) tax identification number (for resident subscribers). Procedure#4: Make a company seal Time to complete: 1 day Cost to complete: BDT 30-50 Procedure#5: Register with the tax authority Time to complete: 9 days Cost to complete: No charge Comment: To commence business, every company must register itself with the appropriate taxation authority (Deputy Commission of Taxes of Company Circle, Zonal Taxation Department) under the National Board of Revenue (NBR) and procure a tax identification number for the new company.

Procedure#6: Register for VAT Time to complete: 7 days, simultaneously with procedure 6 Cost to complete: No charge Comment: For VAT purposes, companies may be registered separately with the Customs, Excise, and VAT Commission (under the NBR). The various VATs incurred while operating the business will be regulated by the area NBR Customs Department and VAT and Excise Department. Procedure#7: Obtain a Trade License Time to complete: 6 days Cost to complete: BDT 5,000 Comment: Companies may obtain a Trade License from the City Corporation. The Trade License application must be accompanied by the following documents: 1) A certified copy of the companys articles and memorandum of association 2) A copy of the certificate of incorporation 3) The companys statement of bank solvency 4) The companys tax identification number certificate 5) A copy of the rent agreement for the companys office 6) Three photographs (copies) and 7) Particulars of the person in charge of the main corporate functions.

Approval from SEC to be listed in the Share Market: After getting Trade License, companies have to apply for the form to the Securities Exchange Commission (SEC). After properly examined the necessary documents, SEC attests seal on the form. Next, the companies offer Initial Public Offer (IPO) to the Primary Market through Merchant Banker/ Underwriter. The first transaction of newly issued share could be through Private Placement. Additional tasks that should be completed upon forming a new corporation are initial meeting of shareholders and directors, writing resolutions and opening a bank account.

Conclusion: Share market is the mirror image of any economy. Economic status of a Public Limited Company are viewed in the market through its EPS as well as share price and P/E ratio.