1

Report on

Business Structure in Bangladesh

(Course code: MGT-2218)

Group 11
Section: B
BBA-8th Batch

Department of Management Studies

Faculty of Business Studies
Jagannath University

October, 2014

Group 11
Name of the Group Members:
Roll No

Name

B120202122

Moniruzzaman

B120202170

Seema Rani Mondal

B120202175

Mahmud Hasan

B120202176

Den Islam

B120202177

Afsana Afroze

B120202184

Tareq Aziz

Supervisor
Tahmina Rita Anika
Lecturer
Department of Management Studies
Faculty of Business studies
Jagannath University

Remarks

Supervisor Forwarding

Lecturer
Tahmina Rita Anika

Department of Management Studies

Faculty of Business Studies
Jagannath University

Declaration

I assure that all the information in this report is reliable, true and consistent with the business
structure in Bangladesh.
For preparing this report I have collected information from the website and the books which I
mentioned in references. I take the entire responsibility for such unintended errors and omissions.

..

Den Islam
On Behalf of Group11

Date

Acknowledgment

Praise is to almighty Allah who has given me the strength and opportunity to complete
this report. I acknowledge my honourable Supervisor Tahmina Rita Anika,
Lecturer,Department of Management Studies,Faculty of Business Studies,Jagannath
University, who provided me all out help, supports and guidelines in preparing this
report and all of my group menbers who give company to prepare this report. Without
their inspiration and help it could be very difficult to prepare this report.

Den Islam
On Behalf of Group11

Executive Summary

Bangladesh is a combination of competitive market, business-friendly environment and

cost structure that can give the best returns. Bangladesh offers a well-educated, highly
adaptive and industrious workforce with the lowest wages and salaries in the region.
57.30% of the population is under 25, providing a youthful group for recruitment. The
country has consistently developed a skilled workforce catering to investors needs.
English is widely spoken, making communication easy. Bangladesh is strategically
located next to India, China and ASEAN markets. Bangladesh has proved to be an
attractive investment location with its 146.6 million population and consistent economic
growth leading to strong and growing domestic demand. Energy prices in Bangladesh
are the most competitive in the region. Bangladesh offers the most liberal FDI regime in
South Asia, allowing 100% foreign equity with unrestricted exit policy, easy remittance of
royalty, and repatriation of profits and incomes. Bangladesh offers export-oriented
industrial enclaves with infrastructural facilities and logistical support for foreign
investors. s a private enterprise.

Table of Contents

Serial No.

Topics

Page No

Introduction

08

The country

08-09

Meaning of business

Classification of business

Features of business sectors in BD

10

Importance of business in BD

Forms of business firms in BD

18-23

Other forms of business in BD

24

Problems of business organization in BD

25

9
10

Recommendations

11

References

Introduction

09
09-10

Business plays a major role within our society. It is a creative and competitive activity
that continuously contributes to the shaping of our society. By satisfying the needs and
wants people cannot satisfy themselves, businesses improve the quality of life for
people and create a higher standard of living. It is a way for individuals to provide goods
and services to consumers, and at the same time, produce a profit for themselves.
Businesses are not only important because they provide goods and services for
consumers, but they also improve the economy and increase jobs for people within
society which is an additional fact producing a higher standard of living. To measure our
societies standard of living, we must look to our "Gross National Product", which is the
complete measure of our nations output. Unfortunately, inflation is a major problem in
our nation which often reduces the Gross National Product. Inflation occurs when the
goods become too high within society and spending decreases.
A central function within our economic system is satisfying the needs of the consumers
with the use of limited supplies. The purpose of a business is to combine resources
such as land, labor, and capital in a way that will make them more valuable. Operating
in a political and economic climate that supports individual rights, American business
has as its guiding principle the right to private ownership and profit. The amount of
goods produced depends upon the number of resources available for use. This idea is
commonly known as "Supply and Demand". Businesses must attempt to reach an
equilibrium between the two which will directly impact the price of the products
produced. If something is heavily demanded and at the same time, it's resources are
limited, the price of the product will rise. This idea of course works both ways. The
easier it is to produce something, the cheaper it will be.

THE COUNTRY
GEOGRAPHY/STATISTICS
Bangladesh is located in the Southern Asia, bordering the Bay of Bengal with the
coastline covering 580 km between Burma & India with the land boundaries 4,246 km
where Burma covered 193 km and India covered 4,053 km. The time difference is
GMT+6. The Total area is 147,570sq km and the total population is 164,425,491. The
climate of the country is focused as tropical; mild winter (October to March); hot, humid
summer (March to June); humid, warm rainy monsoon (June to October). Official
language is Bangla (Bengali). English is widely used in Government, Business and
Universities. Out of total population, Muslim 89.6 %, Hindu 9.3 %, Buddhist 0.5%,
Christian 0.3% and Other 0.3%.

ECONOMY
The economic position of the country is GDP/PPP (2011 est.): $100 billion; per capita
$664, Real growth rate: 6%, Inflation: 11.3%. The Industries are Textiles, Jute,
Garments, Tea Processing, Paper Newsprint, Cement, Chemical Fertilizer, Light
Engineering, Sugar, Ceramics and Pharmacy. Natural resources are Gas, Timber and
Coal. Arable land covered 55.39% and permanent crops covered 3.08% of total land
area. Bangladesh exports mainly Ready Made Garments including Knit Wear (75% of
exports revenue). Others include: Shrimps, Jute Goods (including Carpet), Leather
Goods and Tea. Bangladesh imports mostly Petroleum Product and Oil, Machinery and
Parts, Soybean and Palm Oil, Raw Cotton, Iron, Steel and Wheat.

Meaning of business
An organization or economic system where goods and services are exchanged for one
another or for money. Every business requires some form of investment and enough
customers to whom its output can be sold on a consistent basis in order to make a
profit. Businesses can be privately owned, not-for-profit or state-owned. An example of
a corporate business is PepsiCo, while a mom-and-pop catering business.

Classification of business

Agriculture and mining business are concerns with the production of raw
material, such as plants or minerals.
Financial businesses include banks and other companies that generate profit
through investment and management of capital.
Information businesses generate profits primarily from the resale of intellectual
property, include movie studios, publishers, and packaged software companies.
Manufacturers produce products, from raw materials or component parts, which
they then sell at a profit. Companies that make physical goods, such as pipe s,
are considered manufacturers.
Service businesses offer intangible goods or services and typically generate a
profit by charging for labor or other services provided to government, other
businesses, or consumers. Organizations ranging from house decorators to
consulting firms, restaurants, and even entertainers are types of service
business,
Transportation businesses deliver goods and individuals from location to location.

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Features
business
Bangladesh:

sector

in

Business sector has been developed after 1947 and rapidly after since the declaration
of privatization policy. Bangladesh government could realize that it was not possible on
the part of government to do justice in all sector development equitably and in a
balanced way. Therefore, private sector involvement was a must. With this backdrop a
few characteristics of Bangladesh are pointed out below.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Domestic business is emerging rapidly.

A scattered corruption cases are also experiencing.
Government has taken substantial measures to get black money invested.
A substantial volume of export trade is taking place under private arrangement.
Import under government arrangement is remarkable.
A big number large, medium size, small scale industry have been set up.
RMG sector has attracted a big volume of investment.
A large number of people have got employment in the business sector.
Huge number of business infrastructure has been established.
A good number of foreign business people are involved under joint venture etc.
scheme.
Business firms are handling goods with own arrangements.
Modern transportation and communication systems are contributing.
Some environmental problems are being encountered.
Technology has occupied a major part of business.
Thousands of sole and partnership business firms have emerged.
Dozens of joint stock companies have been established.
Business combinations holding companies etc. have been set up.
Chambers, federation of chambers of and so on are working successfully.
Government is cooperating for globalizing the business.
Some hartal, strikes, blockades hamper the business activities.

In a developing society, many strength and threats may affect the business sector.
Despite business sector of Bangladesh is marching forward and growing rapidly. In
future, this sector will do better, if all internal and external forces behave positively.

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Importance
Bangladesh:

of

business

in

FORMS OF BUSINESS ENTERPRISE

SOLE PROPRIETORSHIP
In the sole proprietorship, known alternatively as sole trader ship, the proprietor is to
take all risks. Some of the favorable characteristics of a sole proprietorship business are
the ease of initiation, low cost of commencement, freedom in keeping liability to certain
limits, right to control, ease of winding up, minimum legal restrictions, liberty in making
quick decisions and the like. The sole trader bears unlimited liability. A sole trader-ship
business has no legal identity other than that of its owner. Most sole proprietors conduct
small businesses such as retail shops that sell stationary, groceries, cloth, medicines,
handicrafts, books, confectioneries, spare parts, and tyre/tube, wholesale stores. Many
operate amusement business, and service marketing such as hotels, restaurants,
guesthouses or tailoring, hair dressing, road, and water transportation. Sole trader-ships
in Bangladesh are usually classified as small, medium and large depending on the size
of capital employed.

Principle Legislation
All the laws related to an individual are applicable to a sole proprietorship.

Features of sole proprietorship business:

a Single ownership: The ownership of sole proprietorship is single. So, the takes
the risk and gets the profit from business.
b Limited amount of capital: The amount of capital that a sole proprietor can get
together must of necessity be limited.
c Limited managerial ability: An individual, however capable cannot be expected to
posses full knowledge of all branches of a business and is bound to fritter away
his energies in doing things could best be left to others in a partnership or a
company.
d Ease of formation: An individual enterprise is easy to form and simple to run.
e Promptness indecision making: Promptness in taking decisions makes efficiency.

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Flexibility in operation: As the proprietor has the full control over his business and
is the supreme judge in all matters, he can introduce changes as the exigencies
of occasion and without any delay.
g Personal control: The owner of sole proprietorship business can do personal
control.
h Total or undivided risk: The owner of sole proprietor has to bear the total and
undivided risk. However, profit comes with risk.
i Unlimited liability: The owner of sole proprietor has to bear the unlimited liability,
even personally.
j Free from government regulation: sole proprietorship business is free from
government regulation as well as there is no such law regarding sole
proprietorship business.
k Proprietor and the firm identical: There is no difference between proprietor and
the firm. So, proprietor and the firm are identical.
l Easy to dissolve: It is very easy to dissolve this organization. A sole trader can do
this in according with will at any time.

General Requirements to Start a Sole Proprietorship

Business:

Trade License from City Corporation/Municipality/Union Council (Local

Government Bodies)
Taxpayers Identification Number (TIN)
VAT Registration (in the cases where applicable)
IRC (in the case of business related to import)
ERC (in the case of business related to export)
License/Permission from the authorities according to the nature of
business/profession
Bank Account
Membership of Trade Body

As per publication of Board of Investment (BOI), local investor you may setup a
business under several organizational structures such as single proprietorship,
partnership and limited company. In the case of a foreign investor, one may establish its
business only under limited company.

Advantages:
1. Easy of formation: An individual enterprise is easy to form.

2. Direct motivation: The proprietor has a direct personal interest.

3. Complete degree of control: As the sole proprietor is the master of his business, his
control over it is complete.

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4. Promptness in decision making:

efficiency.

Promptness in taking decision makes for

5. Flexibility in operation: As the proprietor has the full control over his business and
is the supreme judge in all matters, he can introduce changes as the exigencies of
occasion demand and without any delay.
6. Maintenance of secrecy: Secrecy is the vital important for the success of a small
business, and a sole trader is in an element position to keep his affairs to himself.
7. Catering for individual tastes: A sole trader is in a position to be in close touch with
his customers and to cater for their individual taste.
8. Credit standing: The fact of large goodwill and wide clientele coupled with unlimited
liability are likely to prompt creditors to grant him liberal credit
9. Minimum government regulation: The activities of a sole trader are regulated by
government and law to the minimum extent.
10. Easy to dissolve: It is very easy to dissolve this organization. A sole trader can do
this in according with his will at any time.

Disadvantage:
Limited amount of capital: The amount of capital that a sole proprietor can get
together must of necessity be limited.
Limited managerial ability: An individual, however capable can not be excepted to
posses full knowledge of all branches of a business and is bound to fritter away his
energies in doing thing which could best be left to others in a partnerships.
Unlimited liability: The liability of proprietor is unlimited. It is not only the assets of the
business that are liable, but also his entire personal fortune for the debts of the
business.
Uncertainty of continuity: When the proprietor dies or is no longer able to run
business, the business may come to end.
Limited size: A sole proprietorship business is in limited size or small.
Lack of managerial expected: As the members of the business are limited and
organization is limited, there is lack of managerial expected.
Total or undivided risk: The owner of sole proprietor has to bear the total and
undivided risk.

14

Limitation of personal risk: One person may not have all capabilities to run a sole
proprietorship business.
Unsuitability for large business: sole proprietorship is not suitable for large business
due to lack of capital.
Instability: It is very easy to dissolve this organization. A sole trader can do this in
according with his will at any time.

PARTNERSHIP FIRM
Partnership Business a form of business organization created through voluntary
agreements of minimum two and maximum 20 persons (the maximum is 10 in the case
of banking business), with the intention of making and sharing profits among
themselves. A partnership can arise only as a result of an agreement or contract,
expressed or implied, between the partners. In Bangladesh, a partnership firm is to be
formed under the provisions of the Partnership Act 1932. By definition, a partnership is
illegal if it consists of more than 20 persons in case of a general business and more
than 10 persons in case of business in banking. A non-profit making association is not a
partnership in law of Bangladesh. In general, institutions or associations cannot be a
member of a partnership.
The Partnership Act 1932 does not require a partnership deed or agreement to be
registered. The registration of such firm is optional. But if registered, a partnership firm
can enjoy some legal rights and facilities. A partnership deed includes the name of the
firm, nature of business, the capital and property of the firm, the capital of individual
partners, term of partnership, provision for salaries, and drawings on account of profit,
rate of interest (if any) on partners' capital, advances and drawings, rights and duties of
individual partners, provision for accounts and audit, division of profits and losses
(capital and revenue), powers of admission and expulsion of a partner, termination of
agreement by insolvency, death, etc., valuation of goodwill and share of assets on sale
or death, and an arbitration clause.
If a partnership business is not registered, a partner of the firm can not bring a suit to
enforce a right arising from a contract or conferred by the Partnership Act against the
firm or his co-partners. Also, an unregistered firm can not file a suit, or take other legal
proceedings, to enforce a right from a contract, or to claim a set-off in any suit filed
against it. However, the non-registration of a firm does not affect the right of an
unregistered firm to bring a suit to enforce a right arising otherwise than out of a
contract and the power of an official assignee or receiver to realize the property of an
insolvent partner.

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Features of partnership business:

Contractual relationship: There are must be contractual relationship between
partners. A partnership contract creates a contractual relationship among partners in
partnership business.
Plurality of persons: Unlike sole proprietorship in partnership business there must be
more than 1 person to form the business. According to partnership Act 1932 it consists
of more than 20 persons in case of a general business and more than 10 persons in
case of business in banking.
Existing of business: The partnership business exists according to the specification of
time or of the completion of specific task written on the contract. After completion of time
of task the partnership business will be winding up.
Sharing of profits: Profits of the partnership business divided among the partners
according to the contract.
Mutual agency: It is a mutual agency of several partners who form and conduct
business mutually for the purpose of earning profit.
Decision making: Decisions are made under the majority of partners. Individual can
not make any decision.
Efficient administration: Expertises of different background take part in part in
partnership which make the administration efficient.
Sharing of risk: All partners of partnership firm risk which make it easier to take risk for
more profit.
Lack of separate entity: Lack of separate entity of partnership make all partners liable
all together for any kind of reason.
Expression of secrecy: decision can not be kept secret because all partners take part
in decision making.

Principle Legislation:
The Partnership Act, 1932;

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General Requirements to Start a Partnership Business:

The Partnership Deed;

Minutes of Partners Meeting;
Trade License from City Corporation/Municipality/Union Council (Local
Government Bodies);
Taxpayers Identification Number (TIN)
VAT Registration (in the cases where applicable)
IRC (in the case of business related to import)
ERC (in the case of business related to export)
License/Permission from the authorities according to the nature of
business/profession
Bank Account
Membership of Trade Body

As per publication of Board of Investment (BOI), local investor you may setup a
business under several organizational structures such as single proprietorship,
partnership and limited company. In the case of a foreign investor, one may establish its
business only under limited company.

Partnership deed
The partnership Act 1932 does not require a partnership deed or agreement to be
registered. The registration of such firm is optional. But if registered, a partnership firm
can enjoy some rights and facilities.
A partnership deed include1. The name of the firm,
2. Nature of business,
3. The capital and property of the firm,
4. The capital of individual partner,
5. Term of partnership,
6. Provision for salaries, and ,
7. Drawing on account of profit,
8. Rate of interest (if any) on partner capital,
9. Advantages and drawings, rights and duties of individual partners,
10. Provisions for accounts and audit,
11. Division of profits and losses (capital and revenue),
12. Powers of admission and expulsion of a partner,
13. Termination of agreement by insolvency, death, etc.,
14. Valuation of goodwill and share of assets on sale or death, and an arbitration
clause.

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Advantages :
Partnership organization enjoys the following advantages:
1. Facility of formation: Formation of partnership is easy. Because these no such
legal formalities for such kind of business.
2. Benefits of larger resources: Together all partners can bring larger resource for
partnership business.
3. Flexibility: Partnership business is flexible due to less formalities, rules and
regulations.
4. Decision-making: Decisions are made under the majority of partners. Individual
cannot make any decision unless he has support from other partners in majority.
5. Benefits of combined ability: partnership business has the benefit of combined
ability, which brings long-term success for the business.
6. Collective decision: decisions are made under the majority of partners. Individual
cannot make any decision he has support from other partners in majority.
7. Sharing of risk: all partners of partnership firm share risk which make it easier to
take risk for more profit.
8. Wholesome effect of unlimited liability: Partnership business has a wholesome
effect of unlimited liability.
9. Protection of minority interests: Partnership business protects the interest of
minority, which is beneficial for the business.
10. Shared responsibility: All partners of partnership firm share responsibility which
makes it easier to establish a successful partnership business.

Disadvantages :
Despite several advantages, the partnership form of organization suffers from the
following limitations.
1. Lack of harmony: Often there is lack of harmony exist in partnership business,
which is very detrimental for such business.
2. Limited resources: The amount of resources is limited in partnership business.
3. Restricted enterprise: Partnership enterprise is restricted due to its nature and
available for limited operations.
4. Instability: It is very easy to dissolve this organization. A sole trader can do this in
according with his will at any time.
5. Lack of proper decision making: Decisions are made under the majority of
partners. Individual cannot make any decision he has support from other partners
in majority.
6. Lack of public confidence: Partnership business does have such public
confidence like public limited company.
7. Heavy burden through implied authorities: Partnership business creates heavy
burden through implied authorities.
8. Efficient administration: Expertise of different background take part in partnership
which makes administration efficient.

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9. Lack of separate entity: Lack of separate entity of partnership make all partners
liable all together for any kind of reason.
10. Lack of responsibility: All partners of partnership firm share responsibility, but
there is a saying like sharing responsibility means no ones responsibility.

Dissolution of partnership firm:

The dissolution of partnership between all the partners of a firm is called the "dissolution
of the firm".

1. Dissolution by agreement
A firm may be dissolved with the consent of all the partners or in
accordance with a contract between the partners

2. Compulsory dissolution
A firm is dissolved(a) by the adjudication of all the partners or of all the partners but one as insolvent,
(b) by the happening of any event which makes it unlawful for the business of the
firm to be carried on or for the partners to carry it on in partnership:
Provided that, where more than one separate adventure or undertaking is carried
on by the firm, the illegality of one or more shall not of itself cause the dissolution
of the firm in respect of its lawful adventures and undertakings
3. Dissolution on the happening of certain contingencies
Subject to contract between the partners a firm is dissolved if constituted for a fixed term, by the expiry of that term.
completion thereof.
by the death of partner.
4. Dissolution by notice of partnership at will
Where the partnership is at will, the firm may be dissolved by any partner
giving notice in writing to all the other partners of his intention to dissolve the
firm.
The firm is dissolved as from the date mentioned in the notice as the date of
dissolution or, if no date is so mentioned, as from the date of the
communication of the notice.
5. Dissolution by the Court.

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Join stock company in Bangladesh

A company form of business organization is known as a joint stock company. It is a
voluntary association of persons who generally contribute capital to carry on a particular
type of business. Which is established by law and can be dissolved only by law.

Characteristics of joint stock company

Main characteristics of joint stock company are:
1. Legal formation: A joint stock company comes into existence only when it has
been registered after completion of all formalities required by the Indian company
Act 1956.
2. Artificial persons: Just like an individual, who takes birth, grows, enter into
relationships and dies, a joint stock company takes birth, grows, enters into
relationships and dies.
3. Separate legal entity: being an artificial person, a joint stock company has its own
separate existence independent of its members.
4. Common seal: A joint stock company has a own seal, which is used while dealing
withn others or entering into contracts with outsiders.
5. Perpetual existence: A joint stock company continues to exist as long as it fulfils
the requirement of law. It is not affected by the death, lunacy, insolvency or
retirement of any of its members.
6. In a joint stock company, the liability of a members is limited to the extent of the
value of shares held by him.
7. Democratic management: joint stock companies have democratic management
and control.That is, even though the shareholders are own of the company, all of
them can not participate in the management of the country.
8. Large financial resoures: A joint stock company is liable to collect a large amount
of capital through small contributions form a large number of people.
9. Contribution to society: A joint stock company offers employment to a large
number of people. It facilitates promotion of various avcillary industries, Trade
and auxiliaries to trade.

Advantages of joint stock company:

The main advantages of joint stock company1 Large financial resources: A joint stock company is able to collect a large amount
of capital through small contributions from a large number of people.
2 Limited liability: In case of a company, the liability of its members is limited to the
extent of the value of shares by them.
3 Professional management: Board of directors (or simply board) manage the
affairs of the company and are accountable to all the members. So members

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4
5
6
7
8

9
10

elect capable person having sound financial, legal and business knowledge to
the board so that they can mange the company efficiency.
Large-scale production: Due to the availability of large financial resources and
technical expertise, it is possible for the companies to have large-scale
production.
Contribution to society: A joint stock company offers employment to a large
number of people. It facilitates promotion of various ancillary industries, trade and
auxiliaries to trade.
Research and Development: Only in company form of business it is possible to
invest a lot of on research and development for improved process of production,
new design, better quality products, etc.
Artificial person: Just like an individual, who takes birth, grows, inter into
relationships and dies, a joint stock companies takes birth, grows, enters into
relationships and dies.
Separate legal entity: being an artificial person, a joint stock company has its own
separate existence independent of its members. It means that a joint stock
company can own property, enter into contracts and conduct any lawful business
in its own name.
Credit facilities: Join stock companies may have credit from banks and different
financial institutions.
Well publicity: Join stock has well publicity due to its large extension among
shareholders as well as in business operations.

Disadvantages:

LIMITED COMPANIES
Limited company is a company in which the liability of the members or subscribers of
the company is limited to what they have invested or guaranteed to the company.
Limited companies may be limited by shares or by guarantee. And the former of these,
a limited company limited by shares, may be further divided into public companies and
private companies. Business in Bangladesh may be carried on by a company formed
and incorporated locally or by a company incorporated abroad but registered in
Bangladesh. The incorporation or registration is done by the Registrar of Joint Stock
Companies and Firms under the provisions of the Company's Act 1994.
Companies could be classified in following categories:
1. Company Limited by Shares
Public Limited Company and

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Private Limited Company

2. Company Limited by Guarantees;
3. Unlimited Company

Private Limited Company:

Restricts the rights to transfer the shares;
Limits the number of its members to minimum 2 and maximum 50 excluding the
persons employed in the company;
Prohibits any invitation to the public to subscribe for the shares or debentures of
the company and
Entitles to commence business from the date of its incorporation.

Major private organization in Bangladesh

1. BRAC: Bangladesh Rural Development Committee (BRAC) is non government
organization. Set up by its founder executive director Fazle Hasan Abden. It
initially provided relief and habitation assistance to refugee. At present it
promotes income generation for the poor, landless through microcredit and
programs on health care, literacy, education , trading.
2. BGMEA: Bangladesh Garments Manufactures and Exporters Association is a
recognized trade body that represents exports oriented garment manufacture. It
started in the late 1970. It is dedicated to establishing and promoting contacts
with foreign buyers, business and trade association.
3. Prime Bank Limited: It is a private sector commercial bank incorporated in
Bangladesh under the companys act 19954. The bank started its operation in 17
April 1995. The management of the bank vested in a 12 member board of
directors with the managing director as the chief executive. It provides Islami
banking through two of its branches in Dhaka and Sylhet.

Public Limited Company:

May issue invitation to the members of the public to subscribe the shares and
debentures of the company through a prospectus which complies with the
requirements of the Companies' Act 1994, the Securities and Exchange
Ordinance, 1969 and the Securities and Exchange Commission Act, 1993 as
amended from time to time.
Has minimum 7 members but there is no maximum limit.

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Has at least 3 Directors.

May a private company converted into a public company.

Major public organization in Bangladesh

There are a good number of public organizations in Bangladesh. Some of them are1. WASA: Water & Sewerage Dhaka popularly known as WASA is responsible for
water supply and sewerage network in Dhaka city.
Established in 1963.
Managed by a board headed by a chairman.
2. DESA: Dhaka Electricity Supply Authority known as DESA. It has total manpower
of 6500. It operates in two zones under general manager.
Established on 1 October, 1991.
Main objectives are to improved service of electricity to the consumer,
improved transmission and to reduce the system loss
3. Petrobangla: successor of Bangladesh Mineral oil and Gas Corporation(BOGMC)
which is created through the presidential order number 27 on 26 March 1972. It
is worked with oil, gas, mineral by the ordinance of government number 21 of 11
April 1985 and the organization was short name as Petrobangla.
4. BRTC: Bangladesh Road Transport Corporation (BRTC) is the state owns
transport corporation of Bangladesh. It was established under the Govt.
ordinance No. 7 of 1961 dated February 1961.

Unlimited Company:
An unlimited company refers to a company having no limit on the liability of its
members.
Principal Legislation
The Companies Act,1994;
The Securities and Exchange Ordinance, 1969;
The Foreign Exchange Regulation Act, 1947;

TRUSTS
A Trust is an obligation annexed to the ownership of property, and arising out of a
confidence reposed in and accepted by the owner, or declared and accepted by him, for
the benefit of another, or of another and the owner The person who reposes or declares
the confidence is called the Author of the Trust. The person who accepts the
confidence is called the Trustee. The person for whose benefit the confidence is

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accepted is called the Beneficiary. The subject-matter of the trust is called Trustproperty or Trust-money. The Beneficial interest or Interest of the beneficiary is his
right against the trustee as owner of the trust-property; and the instrument, if any, by
which the trust is declared is called the instrument of trust.
A breach of any duty imposed on a trustee, as such, by any law for the time being in
force, is called a Breach of trust
And in the Trust Act, 1882, unless there be something repugnant in the subject or
context, Registered means registered under the law for the registration of documents
for the time being in force. The main instrument of any public charitable trust is the trust
deed, wherein the aims and objects and mode of management (of the trust) should be
enshrined. The salient features of Trust are as follows:
In every trust deed, the minimum and maximum number of trustees has to be
specified.
The trust deed should clearly spell out the aims and objects of the trust, how the trust
should be managed, how other trustees may be appointed or removed, etc.
The trust deed should be signed by both the settlor/s and trustee/s in the presence of
two witnesses.
The trust deed should be executed on non-judicial stamp paper, the value of which
would depend on the valuation of the trust property.

Principal Legislation

The Trust Act, 1882;

The Societies Registration Act, 1860;
The Companies Act, 1994;
The Registration Act, 1908;

General Requirements to Set Up a Trust:

The application for registration should be made to the official having jurisdiction over
the region in which the trust is sought to be registered.
After providing details (in the form) regarding designation by which the public trust
shall be known, names of trustees, mode of succession, etc., the applicant has to affix a
court fee stamp of specified amount, depending on the value of the trust property.

24

The application form should be signed by the applicant before the regional officer or
superintendent of the regional office of the charity commissioner or a notary. The
application form should be submitted, together with a copy of the trust deed.
Two other documents which should be submitted at the time of making an application
for registration are affidavit and consent letter.

JOINT VENTURES
Joint venture (JV) is a business agreement in which parties agrees to develop, for a
finite time, a new entity and new assets by contributing equity. They exercise control
over the enterprise and consequently share revenues, expenses and assets. There are
other types of companies such as JV limited by guarantee, joint ventures limited by
guarantee with partners holding shares.
Principal Legislation
The Companies Act, 1994;
The Investment Board Act, 1989;
The Foreign Investment Promotion and Protection Act, 1980General
Requirements to Set Up a Joint Venture:
Joint venture agreement
Application Form
Trade License
Limited Company :
Certificate of Incorporation
Memorandum and Articles of Association
Name and address of other shareholder/director(s) of the project
Additional documents for projects in certain sectors
Copy of rental agreement or lease deed for premises or land purchase document
TIN Certificate
Registration Fee (Bank Draft)
STEPS TO START A JOINT VENTURE IN BANGLADESH
Joint Venture Agreement between the parties
Company Formation or Establishing Place of Business Opening
Liaison/Branch/Representative Office;
Securing Trade License;
Plant Setup;
Registering with BOI;
Joint Venture and 100% Foreign Investment proposal in the Private Sector;

25

Self-financed local investment proposals including industries sanctioned/financed

by financial institutions or commercial banks;
Permission for setting up joint venture industrial units with public sector
corporations;
Obtaining Industrial Plot;
Registration/Approval for Foreign Loan, Suppliers Credit, PAYE Scheme etc.;
Obtaining Utility Connection Import of Spare Parts and Raw & Packaging
Materials;
Obtaining Work Permit;
Registration with Factories Act;
Registration with Environmental Legislation;
Remittance of Royalty, Technical Know-How and Technical Assistance Fees;
Commercial Operation

CO-OPERATIVES
Co-operative is a business organization owned and operated by a group of individuals
for their mutual benefit. A cooperative can also be defined as "an autonomous
association of persons united voluntarily to meet their common economic, social, and
cultural needs and aspirations through jointly owned and democratically controlled
enterprise". A cooperative may also be defined as a business owned and controlled
equally by the people who use its services or by the people who work there. Various
aspects regarding cooperative enterprise are the focus of study in the field of
cooperative economics.
To uplift the status of the poor people living in the rural areas, the government of
Bangladesh set up the Rural Development and Cooperative Division ( RDCD ) under
the Ministry of Local Government, Rural Development and Cooperatives. This Division
is responsible for policy formulation, planning, monitoring and administration of rural
development and cooperative initiatives of the country. RDCD is also assigned to
coordinate the activities pertaining to rural development undertaken by other Ministries
and provide policy guidelines to the RDA and BARD are serving the policy guidelines
and formulating recommendations related to poverty reduction strategies through their
symbiotic research and action-research programs.

Principal Legislation
The Cooperative Societies Act, 2001;
The Cooperative Societies Rules, 2004 General Requirements to Set Up a
Society:
Bye-laws and Deed of Cooperative Society

26

Application in the prescribed form to the Registrar of Co-operative Societies

The registration of a cooperative society is subject to satisfaction of the Registrar
of the Cooperative Societies (RCS);
For banking and unlimited liability cooperatives some financial conditions have
been

Other form of businesses:

Turnkey Business in Bangladesh
A turnkey business is a business that includes everything you need to start running the
business. A business that is being sold as a turnkey is business would include tangibles
such as inventory and equipment through intangibles such as previously established
reputation and goodwill. The most common type of turnkey being sold is a franchise.
A turnkey business could involve the following elements:

Project administration
Licensing in of process
Design and engineering services
Sub contracting
Management control
Materials control.

Franchise Business Firms in Bangladesh

Franchise: A franchise is a right granted to an individual or group to market a
companys goods or services within a certain territory or location.
Franchise and Franchisor: An individual who purchases and runs a franchise is called
a franchisee. The franchise purchases a franchise from the franchisor. The
franchisee must follow certain rules and regulations already established by the
franchisor. In recent years franchising has also been heavily promoted in Bangladesh.
Examples of franchises in Bangladesh
KFC KFC, founded and also known as Kentucky Fried Chicken. It is a chain of fast
food restaurants based in Louisville, Kentucky, in the United States. KFC has been a
brand and operating segment, termed a concept of Yum! Brands since 1997 when that
company was spun off from PepsiCo as Tricon Global Restaurants Inc. KFC primarily
sells chicken pieces, wraps, salads and sandwiches.

27

Transcom Food Limited, a concern of Transcom Group is the franchisee of KFC in

Bangladesh. The first ever KFC restaurant has been opened in September at Gulshan,
Dhaka with a seating capacity of 178 persons. In the coming days, KFC plans roll out
more restaurants in Bangladesh. KFC also has branches in Dhanmondi and Mirpur.
Pizza Hut- pizza Hut is an American restaurant chain and international franchise of
Pizza Hut in Bangladesh. With a seating capacity of 220 persons, the first outlet of
Pizza Hut opened in South Avenue, Gulshan-1 at 6 th December. Currently there are
three outlets, two in Dhaka which are situated at Gulshan and Dhanmondi other at
Chittagong.
Foreign Companies in Bangladesh
Foreign company is a corporation which was incorporated under the laws of a foreign
country. It is also called Alien Corporation.
Examples of foreign business in Bangladesh
i

Axiata Group Berhad is the emerging leader in Asian mobile

telecommunications.
The
group
one
of
the
largest
telecommunications companies in the region, has extensive
operations and business in 10 countries in Asia, providing a
comprehensive range of mobile telecommunication services to a
combined base of over 94 million subscribers. The group currently
has controlling interest in its mobile communications operations in
Malaysia, Indonesia, Sri Lanka, Bangladesh etc. Its mobile
subsidiaries operate under the brand names Celcom in Malaysia,
XL in Indonesia, Dialog in Sri Lanka, AKTEL in Bangladesh.
Robi Axiata Limited/AKTEL is a joint venture between Axiata Group
Berhad Malaysia(70%) and NTT Doco MO Inc, Japan(30%). Robi is
the third largest mobile phone operator in Bangladesh in terms of
subscribers.

ii

BEXIMCO Group is the largest private sector industrial

conglomerate in Bangladesh. BEXIMCO comprises of five publicly
listed companies and sixteen private companies. BEXIMCO
industrial business include jute, textiles, basic chemicals,
pharmaceuticals, and ceramics. BEXIMCOs non-industrial
undertakings are focused on real estate and construction,
engineering, media, information technology, trading and financial
services.

28

Multinational Companies in Bangladesh

A multinational company is a corporation or a enterprise that manages production or
delivers services in more than one country. It can also be referred to as an international
corporation. The International Labor Organization (ILO) has defined an MNC as a
corporation that has its management headquarters in one country, known as the home
country, and operates in several others countries known as the host countries. Some
multinational corporation are very big, with budgets that exceed some nations GDPs.
Multinational corporations can have a powerful influence in local economics, and even
the world economy and play an important role in international relations and
globalization.
Example of Multinational Corporation
a British American Tobacco: British American Tobacco Bangladesh is one of the
largest multinational in Bangladesh and has been operating for over 100 years.
British American Tobacco brands the following1 Benson & Hedges
2 John Player Gold Leaf
3 Pall Mall
4 Star Scissors
5 Pilot and Bristol
b)Rangs Group: Rangs Group of Companies (RGC) is one of the most reputed and
largest groups in Bangladesh. The Group has always been known as a pioneer in the
field of consumer technology in Bangladesh. The company was registered under the
Companies act of 1913 and was incorporated in Bangladesh on 29 th March, 1984. In
course of time the company has spread its branches in various field of business and
achieved remarkable success. At present there are sixteen sister concerns and each of
them is a complete Division with individual strategy & policy and employees. Rangs has
achieved the name of the consumer. Customer satisfaction is the prime focus of all
Divisions.

Problems of business organization

in Bangladesh:
In our country, each and every Business organizations faces with some problem. Some
o f them are described bellow-

29

1 Corruption : t is the most common problems of our organization. Mostly public

organization face this problem. Corruption includes here Dishonesty, taking
bribes, working for self interest etc.
2 political influence : very often ,business organization of Bangladesh are badly
influenced by the parties. Political unrest also creates problems to thee org
3 Unfavorable working conditions: In many organizations proper working
environment is absent. In these situation the employees fail to perform their
duties & responsibilities. Thus, unfavorable working condition creates problems
in the organization.
4 Lack of democratic environment : Most f the organization of Bangladesh lacks
democratic environment. The employees cant take part in the decision making
process. As a result, they neglect in perform their task.
5 Lack of adequate training facilities : training is the means increasing the
ability of the employees to perform their jobs properly and lack of this training
creates many problems in the business org.
6 Emergence of large number of trade union : in the public organization exists
too many trade unions. It creates heavy problem to the management of the
organization.
7 Lack of proper disciplinary action : discipline is a must to be successful in
business. Very often we notice that, our business organization lacks proper
disciplinary action. That 5s why those organization fail to succeed.
8 Lack of proper planning : In some business organization of Bangladesh, proper
planning is absent. As a result the organization fails to achieve its goals.
9 Lack of motivation : Motivation increasing the productivity. But many business
organization of Bangladesh lacks motivational programs.
Lack of favorable employer-employee relationship : In many organization of our
country good employer relationship is absent. As a result the employee dont feel
interest in performing their task.
The common problems of business org. described above
Ethical deterioration of business people

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Ethics are the issues that should be strictly maintained in the business org. although
it is very important, ethical deterioration are also noticed in the peoples behavior.
Some unethical practice of business people are described below
1 Dishonesty : Dishonesty is very common in our business organization. It
includes those activities that goes against the organization. For ex: taking
bribes.
2 Distortion of the fact: It occurs when the business people misrepresent any
information or facts. These type of unethical practices mislead the other people.
3 Tendency of fulfilling self interest : Very often business people think only
about their interest. In order to full-fill those interest they even work against the
interest of org.
4 Greed to amass excessive profit : In order to make excessive profit the
business owner work against the interest of the customer. For ex: mixing water
with milk, mixing worst quality goods with better quality.
5 Creation of false document : This in also common unethical practice.
Sometimes our business people show high or low profit from the actual profit in
order to deceive people .
6 Lack of transparency : lack of transparency is also seen in business org. It
occurs when the documents of the org. are intentionally kept unclear.
Resistance to investigation is also included here .
7 Avoiding compensation for unlawful Act : very often the business people do
unlawful act but they dont pay any compensation for these acts. These types of
practices harm for the whole society.
8 Invasion of privacy : sometimes the business people disclose the privacy of
the organization for the achievement of personal gain.
9 Polluting the environment : Many business organization pollute the
environment by the fumes and leaving the wastes here and there. This is also
an unethical practice .
10 Planned obsolescence : It means the deliberate creation of a product or
service with a limited useful life.
The ethical deterioration of business people are too many to describe. The
most common of them are described above.

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Recommendation
The following guidelines can be followed by the business organization of Bangladesh
1 Maintaining proper relationship: It is an important measure to reduce the problem
of the org. proper employer-employee relationship ensures productivity
organization development, achievement of goal etc.
2 Providing educate training: The employee should be provided adequate training
in order to perform their job properly.
3 Ensuring favorable working condition: Favorable working condition should be
ensured, so that the employees can perform their assigned task properly.
4 Adequate motivational programs: Business organization should arrange
adequate motivational program for the employees. If it is ensured, the
employees will be more interested in performing their jobs.
5 Establishing rules and regulation: A business organization should establish
necessary rules for managing the total systems of the organization. Moreover, it
should also ensure the proper application of this rules.
6 Ensuring democratic environment: Free and democratic environment is very
important for the business organization. So, each and every organization should
ensure democratic environment.
7 Evaluating the employees performance: After a certain time period every
business organization should evaluate the performance of the employees. This
will increase the productivity in the organization.
8 Managing health and safety in the organization: the business organization
manages health and safety measure properly. This will reduce the probability of
dispute in the organization.
9 Ensuring proper disciplinary action: Discipline should be strictly maintained. And
if there is any unethical behavior or dishonesty, punishment should be given to
respected employee.
10 Making proper plan: Business organization should make proper plane for the
organization. Moreover, proper implementation of the plan should be ensured.

How the ethical deterioration of business people can be solved

1 Strengthening the ethical framework: The ethical framework of the people should
be made more strong. Every business people should be made aware of the
harmful effects of the unethical practices.
2 Training ethics: The business organization can arrange training programs on
ethics for the business people .
3 Employ motivation: The business organization should arrange motivational
programs for the people. And if the employees are motivated they will sacrifice
their interest for the interest of the organization.

32

4 Ethical management: Ethical management includes all activities which are

related with managing and maintaining ethics in he organization. Proper ethical
management should be ensured in the organization.
5 Employee participation: The business organization should ensure employees
participation in the important decision of he organization.
6 Disciplinary action; Proper disciplinary action should be taken by the organization
for the punishment of guilty person.

References:

www.cb.cityu.edu
www.sba.gov/....structure/...business..
www.austintexas.gov
www.doingbusiness.org
www.uhy.com/.../Doing-business/..
http://www.banglapedia.org/
Industrial law by Sen Mitra
Introduction to business By Md. Nazim Uddin Bhuiyan