Corporate Laws And Practices-p Ii - Nov 08

Corporate Laws and Practices Time allowed-3 hours Total Marks-100 [N.B.- Questions must be answered in English. Figures in the margin indicate full marks. Examiner will take account of the quality of language and of the manner in which the answers are presented. Different parts of the same question must be answered in one place in order of sequence.] Marks 4

1. (a) Can a company change the object clause of its Memorandum of Association? If so, what procedures must be complied with by the Company? (b) What is the effect of carrying on business by a Company with less than the legal minimum number of members? (c) What are the effects of irregular allotment of shares?

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2. (a) What do you mean by the ‘ultra vires’ doctrine in company law? What are the remedies available to a lender in case of ultra vires borrowing by a Company? (b) The Directors of a limited company resolve to issue further shares to the existing shareholders. As a Company Secretary prepare a notice of the ensuing Extra Ordinary General Meeting. (c) Distinguish between Member’s Voluntary winding up and Creditor’s Voluntary winding up. 3. (a) Under what circumstances a Company limited by shares can (i) pay interest out of capital; (ii) write off preliminary expenses? (b) Under what conditions may shares be issued at a discount? (c) What are the pre-conditions of reduction of share capital of a company? (d) What do you understand by the “pre-emptive rights of shareholders” in respect of further issue of shares? 4. (a) The Companies Act, 1994 contains certain provisions for safeguarding the interest of the minority shareholders. Briefly describe such provisions. (b) What is the tenure of an auditor duly approved in an Annual General Meeting of a limited Company? (c) Discuss the provisions of section 211 of the Companies Act, 1994 concerning appointment and termination of auditors. 5. (a) What do you mean by ‘securities’ as outlined in the Securities and Exchange Ordinance, 1969? (b) Give some specific examples of company’s affairs or market condition requiring disclosures under the Explanation of Exchange Disclosure Policy. (c) State the regulations as to holding of Annual General Meeting by a listed company of Dhaka Stock Exchange in addition to provisions of the Companies Act, 1994.

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6. (a) What are the reasons for which a listed company may be de-listed or suspended by the Dhaka Stock Exchange as per its Listing Regulations in force. (b) What is the impact if shares of a listed company are not traded for a continuous period of 180 days at the Stock Exchanges (DSE/CSE)? (c) On what ground the Registrar of Joint Stock Company can present a petition for winding up a company?

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7. (a) What is the single most distinguishing factor between the business activities that a banking company can undertake as compared to a non-banking financial institution?

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(b) List the broad business activities that an NBFI can undertake and state the licensing requirements for an existing investment bank which also intends to do business besides investment banking, leasing and housing finance services. (c) What are illegal associations? State the effect of an illegal association.

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8. (a) What is insurable interest? State how far the rules regarding insurable interest apply to different types of insurance. (b) Does the principle of indemnity apply with equal force to all kinds of insurance contracts?

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9. (a) What are the restrictions imposed upon the Bank Company with regard to appointment of Directors? (b) In what situations can the Bangladesh Bank dissolve the Board of Directors of a Bank Company? (c) Bangladesh Bank has recently increased (after three years) its repurchase agreement-Repo. Rate, the key short-term interest rate by 25 percentage points (from 8.50% to 8.75%) in an effort to rein in runaway inflation. Senior bankers and leading economists say that the central bank’s hike of key policy interest rate is likely to hit growth of industry and agriculture and may not achieve its main goal to contain inflationary pressure. On the other hand the International Monetary Fund welcomed the move as timely saying it would help curb inflationary trend in the economy. How do you see this change? Is it going to affect our economy adversely? Give your answer highlighting the impact of high interest rate in the productive sectors of our economy such as garments, textile and agriculture and also import of capital machinery.

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THE END

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