Businesses push for dormant company cleanup, auditor safeguards in Companies Act draft
Commerce minister says the Companies Act needs to be modernised based on businesses’ needs.
Business leaders and professionals have called for changes to the proposed amendments to the Companies Act, 1994, seeking to ease business operations and strengthen corporate governance.
Their recommendations included deregistering dormant companies, clarifying the definition of a "company group", shortening the notice period for annual general meetings (AGMs), and retaining safeguards around auditor changes.
The proposals were raised at a consultation on the draft third amendment (2026) to the Companies Act at the FBCCI office in Motijheel, Dhaka, yesterday (7 September).
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FBCCI Administrator Md Fazlul Haque chaired the meeting, attended by representatives of business associations, regulators, stock exchanges and audit firms.
Md Yasin Miah, a member of the Institute of Chartered Accounts of Bangladesh (ICAB), highlighted the large gap between registered and active companies. Although around 3,00,000 companies are registered, only 57,000-58,000 have been audited since the Digital Business Identification system was launched in 2020, the meeting was told.
He called for a simplified process to identify and deregister inactive companies.
Yasin also opposed a provision easing auditor changes, warning it could allow intermediaries to influence companies to switch auditors and potentially undermine audit quality.
On behalf of FBCCI, Barrister Nihad Kabir proposed requiring companies to give shareholders at least 21 days' notice before an AGM. However, a businessman suggested reducing the period to 14 days, a proposal backed by Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
Nihad also proposed making company secretaries mandatory for firms with annual revenue above Tk500 crore and allowing greater flexibility in appointing independent directors at unlisted public limited companies.
Business representatives also called for a unified definition of "group" under the Companies Act and banking regulations, citing recurring disputes with Bangladesh Bank over the issue.
Bangladesh Securities and Exchange Commission (BSEC) Executive Director Abul Kalam said several proposals submitted by the commission in December 2025 were absent from the draft, including allowing listed companies to buy back their own shares under specific conditions.
He said Section 58 of the existing law restricts companies from purchasing their own shares.
BSEC also proposed modernising annual reports and allowing digital publication, as well as replacing "balance sheet" with "annual financial statement" and "board report" with "annual report".
Commerce Minister Khondaker Abdul Muktadir said the law would be updated based on feedback from businesses and industrialists.
"This law will primarily be used by businesses themselves, so it must be modernised based on their needs, practical experience and future demands," he said.
FBCCI Administrator Fazlul Haque urged business associations to submit written recommendations within seven days, saying a revised draft would be published within a month after considering their feedback.
