Legal Framework & Statutory Basis
1. Composition and Appointment
Under Section 90 of the Companies Act 1994, every public company must have at least three directors, and every private company at least two. Directors are typically appointed by shareholders in the Annual General Meeting (AGM) as per Section 91.
| Director Category | Statutory Requirement | Governing Section/Rule |
|---|---|---|
| Minimum Number | 2 (Private) / 3 (Public) | Section 90, Companies Act 1994 |
| Share Qualification | As per Articles of Association | Section 97, Companies Act 1994 |
| Independent Director | 1/5th of total Board (Listed) | BSEC Notification 2018 |
| Managing Director | Mandatory for Public Companies | Section 109, Companies Act 1994 |
2. Powers of the Board
The Board's authority is derived from Section 80 and Schedule I (Table A) of the Act. Key powers include the issuance of shares, making calls on shareholders, and borrowing funds. However, certain powers are reserved for the shareholders via Special Resolution, such as altering the Memorandum (Section 12).
3. Duties and Liabilities
Directors owe a fiduciary duty to the company. Under Section 103, directors are prohibited from holding offices of profit without shareholder consent. Section 108 outlines the vacation of office for defaults, including failure to attend three consecutive board meetings or obtaining loans in violation of Section 103.
- Duty of Care: Directors must act with reasonable skill and diligence.
- Disclosure of Interest: Under Section 130, directors must disclose any interest in contracts or arrangements at board meetings.
- Unlimited Liability: While companies have limited liability, Section 87 allows for the memorandum to provide for unlimited liability of directors if so elected.
Consult Barrister Liton Asaduzzaman Sarkar
For expert advice on corporate governance, RJSC filings, and board restructuring, contact our chambers.
Schedule ScopingFrequently Asked Questions
What is the minimum age for a director in Bangladesh?
While the Companies Act 1994 is silent on a specific minimum age, the BSEC Corporate Governance Code and general contractual capacity under the Contract Act 1872 imply a minimum age of 18. However, for listed companies, specific fitness criteria apply.
Can a director be removed before their term expires?
Yes, under Section 106 of the Companies Act 1994, a company may by extraordinary resolution remove a director before the expiration of their period of office, notwithstanding anything in the articles or agreement.
What are the consequences of failing to disclose an interest in a contract?
Pursuant to Section 130 of the Companies Act 1994, a director who fails to disclose their interest in a contract or arrangement entered into by the company shall be liable to a fine, and the contract may be voidable at the option of the company.
◆ Related Statutory Guides & Practice Insights
<li style="margin-bottom:12px; line-height:1.5;">
<a href="/en/bangladesh-pharmaceutical-foreign-investment-drug-registration/" style="color:#C5A059; font-weight:600; text-decoration:none; font-size:14px; display:inline-block; transition:color 0.2s;">• Bangladesh Pharma Sector: Foreign Investment & Drug Registration</a>
</li>
<li style="margin-bottom:12px; line-height:1.5;">
<a href="/en/energy-sector-investment-bangladesh-ppa-regulatory-framework/" style="color:#C5A059; font-weight:600; text-decoration:none; font-size:14px; display:inline-block; transition:color 0.2s;">• Energy Sector Investment Bangladesh: PPA & Regulatory Framework</a>
</li>
<li style="margin-bottom:12px; line-height:1.5;">
<a href="/en/agriculture-investment-bangladesh-land-leasing-foreign-rules/" style="color:#C5A059; font-weight:600; text-decoration:none; font-size:14px; display:inline-block; transition:color 0.2s;">• Agriculture Investment in Bangladesh: Land and Foreign Rules</a>
</li>
<li style="margin-bottom:12px; line-height:1.5;">
<a href="/en/rmg-sector-bangladesh-legal-compliance-investment/" style="color:#C5A059; font-weight:600; text-decoration:none; font-size:14px; display:inline-block; transition:color 0.2s;">• RMG Sector Bangladesh: Compliance, Export & Foreign Investment</a>
</li>