Companies Act: Govt moves to make beneficial ownership disclosure mandatory

The government has moved to amend the Companies Act, 1994, to make disclosure of beneficial ownership mandatory, strengthen measures against money laundering and illicit financial flows, and ease doing business.

The Ministry of Commerce has prepared a draft of the Companies (Third Amendment) Act, 2026, proposing mandatory disclosure of the identities of a company's actual owners and controllers, along with fines and other penalties for withholding information or submitting false returns.

Companies will be required to provide ownership and management information to the BFIU, the ACC, law enforcement agencies and foreign authorities following lawful requests, according to the draft.

They cannot refuse to provide such information on grounds of confidentiality or lack of company consent. The Registrar of Joint Stock Companies and Firms will also be authorised to share information when legally required.

To encourage small businesses, the draft proposes that the minimum paid-up capital requirement for one-person companies (OPCs) would be reduced to Tk5 lakh from Tk25 lakh.

The maximum paid-up capital would simultaneously rise to Tk50 crore from Tk5 crore. An OPC with paid-up capital exceeding Tk50 crore and annual turnover above Tk100 crore could be required to convert into a private or public limited company, as applicable, it says.

It also proposes a secure digital platform for sharing beneficial ownership information with stakeholders, including the Bangladesh Financial Intelligence Unit (BFIU) and Anti-Corruption Commission, in response to lawful requests.

The changes were proposed based on recommendations from the BFIU, according to the draft. Meanwhile, the commerce ministry has published the draft on its website seeking stakeholder feedback by tomorrow. 

The Federation of Bangladesh Chambers of Commerce and Industry has also sought opinions from business organisations by today. Welcoming the move, Fazlul Hoque, administrator of the business body, told TBS on 1 September that updating the Companies Act was necessary.

"Many issues that did not exist earlier are now being addressed. The Bangladesh Financial Intelligence Unit, for example, did not exist when the existing law was enacted," he said.

He said they were reviewing the draft and would raise any concerns or recommendations from businesses. A meeting among stakeholders is also planned next week.

What changes being brought

Beneficial ownership disclosure: Companies will have to disclose who ultimately owns or controls them, directly or indirectly. If a registered shareholder does not have the actual beneficial interest in the shares, they will have to provide the required information to the company within 30 days.

Failure to provide accurate information could result in a fine of up to Tk50,000, plus Tk100 for each day of continued non-compliance. A person concealing beneficial ownership would also lose legal rights over the relevant shares.

Digital registration records: The draft proposes automated electronic systems for company registration and maintaining corporate records. The retention period for records of dissolved companies would be extended to five years from three years, following a BFIU recommendation.

Company secretary, CSR committee: All listed public limited companies and companies with paid-up capital above Tk50 crore would have to appoint a qualified company secretary.

They would also have to form a corporate social responsibility committee comprising at least three directors, including one independent director. The draft would allow chartered accountants, cost and management accountants, chartered secretaries, lawyers and income tax practitioners to act as institutional representatives, in addition to managing directors, CEOs and company secretaries.

Measures to ease business: Companies would no longer need lengthy High Court proceedings to amend their memorandum of association. The Registrar of Joint Stock Companies and Firms would have the authority to approve such changes directly.

The maximum fine for failing to comply with an order to change a company name due to similarity with an existing name would rise to Tk10 lakh, while the daily penalty would increase to Tk5,000 from Tk500.

The deadline for directors to acquire mandatory qualification shares would be extended to 120 days from 60 days. To prevent fraudulent share transfers, transferors would have to authenticate transactions physically or through digital or electronic means, including re-signing or biometric verification.

Inactive companies, registration: Companies that have remained inactive or failed to submit returns for two consecutive years could be removed from the register through a simplified procedure.

However, such removal would not absolve owners or directors of liabilities arising from their personal actions. To prevent fake and anonymous registrations, directors and shareholders would have to provide their NID or passport details, email address, mobile number and Taxpayer Identification Number during registration.

Provisions proposed for removal: The draft proposes repealing Sections 13, 15 and 16 of the existing law to transfer authority over memorandum amendments to the registrar and eliminate lengthy court procedures.

It also seeks to remove the requirement to reappoint a retiring auditor at the annual general meeting, giving companies greater flexibility to appoint or replace auditors.

The term "company secretary" would replace "secretary" in relevant provisions to remove ambiguity and distinguish the corporate position from government officials holding the title of secretary.