This paper is a presentation of the concept of rule of law, Dicey's theory of 'Rule of Law', rule of law in true and modern sense and rule of law in Bangladesh. In Bangladesh context I have discussed the provisions for ensuring rule of law in Bangladesh constitution. I also have discussed the provisions of the constitution, which are contrary to the concept of rule of law in Bangladesh. It has been also identified the difficulties of application of rule of law in Bangladesh. 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. 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. 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. The government type is parliamentary democracy. Capital is Dhaka and there are administrative 7 divisions. Bangladesh seceded from Pakistan in December 1971. The British-era legislation applied in Pakistan after 1947 and post-partition legislation enacted in Pakistan continued to form the basis of Bangladeshi personal status laws, but legal developments since 1972 have been distinct.

1. 1
Surma Tower, Sylhet
An Assignment on
“Practices of legal aspects of Business: A survey study”
Course title: Business Law
Course code: BUS-235
Submitted to:
Mohammad Mizenur RahamanMohammad Mizenur RahamanMohammad Mizenur RahamanMohammad Mizenur Rahaman
Assistant professor
Department of Business Administration, SUST
Guest teacher
Leading University, Sylhet
Prepared by:
Torch Bearer’s
IDIDIDID NameNameNameName
1201010247 Abu Ahmed Shahib
1201010228 Syeda Khadija Jannat Lina
1201010249 Md. Alimuzzaman
1201010248 Syed Ali Hasan
1201010226 Jaber Ahmed Chowdhury
1201010202 Masum Hussain
Section: E
Semester: 5th
Batch: 30th
Department of Business Administration
Leading University, Sylhet
Date of Submission:Date of Submission:Date of Submission:Date of Submission: 02 September02 September02 September02 September, 2013, 2013, 2013, 2013

2. 2
AcknowledgementAcknowledgementAcknowledgementAcknowledgement
At first, we are grateful to Almighty Allah for
creating us in such a beautiful country like Bangladesh
and also for controlling our life. For the mercy of him,
we got such courage to start this assignment on
“Practices of legal aspects of Business: A survey
study”
After that we want to give thanks to our honorable
Head of the Department Dr. Bashir Ahmed Bhuyian for
giving us the opportunity to study in this subject. We
would like to express our thanks to the Librarian of
Leading University for all his help that we have received.
Our respected parents who gave us mental support
and inspiration for our assignment, there is a special
thanks for them.
We also want to give a lot of thanks to our
honourable course teacher, Mohammad Mizenur
Rahaman for giving us mental support and a clear
concept about this assignment.
Without the help of our friends and classmates it
was quite impossible to prepare such kind of assignment.
They give us some necessary information about this topic
which is unknown to us. So, we would like to give
thanks to all of them.

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Abstract
"No free man shall be taken or imprison or desseised or exiled or in any way
destroyed nor will we go or send for him, except under a lawful judgement of his
peers and by the law of the land".
--Magna carta
This paper is a presentation of the concept of rule of law, Dicey's theory of 'Rule of
Law', rule of law in true and modern sense and rule of law inBangladesh. In
Bangladesh context I have discussed the provisions for ensuring rule of law in
Bangladesh constitution. I also have discussed the provisions of the constitution,
which are contrary to the concept of rule of law in Bangladesh. It has been also
identified the difficulties of application of rule of law in Bangladesh. 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. Bangladesh is
located in the Southern Asia, bordering the Bay of Bengal with the coastline covering
580km between Burma & India with the land boundaries 4,246 km. 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. The
government type is parliamentary democracy. Capital is Dhaka and there are
administrative 7 divisions. Bangladesh seceded from Pakistan in December 1971. The
British-era legislation applied in Pakistan after 1947 and post-partition legislation
enacted in Pakistan continued to form the basis of Bangladeshi personal status laws,
but legal developments since 1972 have been distinct.
In the sole proprietorship, known alternatively as sole tradership, the proprietor is to
take all risks. All the laws related to an individual are applicable to a sole
proprietorship. 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. In Bangladesh, limited partnership firm in Bangladesh is not
realistically available. 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.
When we surveyed about the legal aspects of business we saw that there are different
types of rules and regulations of business. Most of the business man’s are familiar
with this rules and regulations and they have trade licenses, they also paid tax in
proper time etc. some are willingly avoid this rules. They known about this but they
don’t want to involve with this.

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Contents
Subject page no.
1. Introduction (Background) ………………………………………… 05
1.1. Geography…………………………………………………….……. 05
1.2. Economy…………………………..…………………………….…. 05
1.3. Currency and banking………………….………………………… 05
1.4. Government/politics………………………………………..…..…… 06
1.5. Legal system………………………………………………...… 06
2. Forms of business enterprise.................................................................... 08
2.1. Sole proprietorship........................................................................... 08
2.2. Partnership firm ................................................................................ 08
2.3. Limited partnership firm.................................................................... 09
2.4. Representative of foreign companies................................................... 09
2.4.1. Board of investment (BOI)............................................................... 10
2.4.2. Bangladesh bank (BB)...................................................................... 10
2.4.3. Registrar of joint stock companies (RJSC)....................................... 11
3. Limited companies........................................................................................ 11
4. Chief inspector of factories and establishment............................................ 12
5. Registration with board of investment........................................................ 12
6. Objective of the study……………………………………………...…… 12
6.1. Primary objective ……………………….………………………… 12
6.2. Secondary objective…………………………………..…………….. 12
8. Practices of legal aspects/ formalities…………………...………………… 13
8.1. Advantages of licensing………………………..…..………… 13
8.2. Disadvantages of licensing…..……………….……………………… 14
9. Other forms of taxation................................................................................. 14
9.1. Sales tax/vat.......................................................................................... 14
9.2. Stamp duty............................................................................................ 14
9.3. Property taxes....................................................................................... 15
10. Survey report……………………………………….…..………………… 16
11. Findings and Recommendations……….………..……………………………. 19
12. Reference……………………………………………………...................... 20

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Chapter 1: Introduction (Background)
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 populations 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.
1.1. Geography/statistics
Bangladesh is located in the Southern Asia, bordering the Bay of Bengal with the
coastline covering 580km 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%.
1.2. 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.
1.3. Currency and banking
Currency of the country is Bangladeshi Taka (Tk). The financial system of
Bangladesh consists of Bangladesh Bank (BB) as the central bank, 4 State Owned
Commercial Banks (SCB), 5 government owned specialized banks, 30 domestic
private banks, 9 foreign banks and 29 non-banking financial institutions. The financial
system also embraces insurance companies, stock exchanges and co-operative banks.
Bangladesh Bank is both the Government’s banker and the banker’s bank, a “Lender
of the Last Resort”. Bangladesh Bank, like most of the central banks of different
countries, exercises monopoly over the issue of currency and the banknotes.

6. 6
1.4. Government / Politics
The conventional long form is “People's Republic of Bangladesh” and the
conventional short form is “Bangladesh”. The government type is parliamentary
democracy. Capital is Dhaka and the administrative 7 divisions are Barisal,
Chittagong, Dhaka, Khulna, Rajshahi, Rangpur and Sylhet. 26 March 1971 is the date
of independence and 16 December 1971 is known as Victory Day and commemorates
the official creation of the state of Bangladesh.
1.5. Legal system
Bangladesh seceded from Pakistan in December 1971. The British-era legislation
applied in Pakistan after 1947 and post-partition legislation enacted in Pakistan
continued to form the basis of Bangladeshi personal status laws, but legal
developments since 1972 have been distinct. Constitution adopted 4 November 1972.
Amended in 1977 to remove principle of secularism included in Part II entitled
Fundamental Principles of State Policy. After the emergence of Bangladesh in 1971, a
rigid constitution has been adopted which came into force on 16 December 1972. The
basic law of Bangladesh is the constitution of the People's Republic of Bangladesh,
1972 as amended from time to time. Till 2010, fifteen amendments to the constitution
have been made. All laws of the country are subordinate laws made by the elected
Sangsad (the legislature consists of 350 members) conforming to the tenets of the
Constitution. The laws enacted by the legislature and now in operation regulate
almost all spheres of life. Ordinarily executive authorities and statutory corporations
cannot make any law, but can make by-laws to the extent authorized by the
legislature. Such subordinate legislation is known as rules or regulations. Unless
found ultra vires of the parent law, such rules or regulations are also enforceable by
the court like the laws made by the legislature. Important laws of the country may be
classified under some broad heads such as land and property laws, personal laws,
commercial laws, labour and industrial laws, election laws, law of crimes, service
laws, fiscal laws, press laws and laws relating to the remedies. All laws, rules or
regulations made by the competent authority are applied in the Courts and Tribunals.
The Courts can be classified into two class’s viz. the Supreme Court and; Subordinate
Courts and Tribunals. The Supreme Court of Bangladesh is the apex court with its
two divisions, the High Court Division and the Appellate Division. As the apex court
the high court division has been vested with the power to hear appeals and revisions
from subordinate courts, and also to issue orders and directives in the nature of rights
to enforce fundamental rights and to grant other reliefs available under the writ
jurisdiction. There are civil courts presided by Assistant Judge to try the suits of civil
nature and criminal courts presided by judicial magistrate to try the criminal cases. In
addition, there are various other laws on different subjects regulating different fields
and spheres of activities of national life. To seek remedy a person has to file a case
before the appropriate court or authority. Claims regarding money, property,
compensation etc is to be filed before the civil court presided over by the assistant
judge or subordinate judge according to value of the claim, and complaint against
commission of crime is to be filed either with the local police station or in the
criminal court of the magistrate of the first class of the locality. The police investigate
the cases lodged with the police station and produces witnesses before the court
during trial. On the other hand, it is the responsibility of the complainant to produce
witnesses before the court in the cases in which magistrates take cognizance on the
basis of a written complaint. There are other authorities before which remedies may
be sought by an aggrieved party. Those authorities are administrative authorities or
tribunals. Except in respect of enforcement of fundamental rights, admiralty, company

7. 7
matters and writ petitions, relief cannot be sought directly from the high court division
which mainly deals with appeals and revisions from the decisions of the
subordinate courts. One of the notable features of the legal system of Bangladesh is
that the legislature can enact any special law for any particular purpose and thereby
can form special courts or tribunals. For example, there are labour courts and labour
appellate tribunals to decide labour disputes, administrative tribunals and
administrative appellate tribunal to decide service disputes of public servants, income
tax appellate tribunal to decide income tax disputes, custom, excise and VAT
Appellate tribunal to decide disputes regarding custom and excise duties and VAT,
court of settlement to decide disputes about abandoned properties, special judges to
try corruption cases against public servants, special tribunals to try criminal cases
under the Special Power Act 1974 and Nari-o-Shishu Nirjatan Daman Adalats to
decide cases of crimes committed against children and women. To decide election
disputes the election tribunals are constituted with judicial officers. Family courts
have been constituted with assistant judges to decide family disputes. To decide
money claims of the banks and other financial institutions Artha Rin Adalats have
been set up presided over by judges, and insolvency courts have been set up presided
over by district or additional district Judges to declare defaulting borrowers as
insolvent. To try offences committed by children below the age of 16 years, juvenile
courts have been formed with the magistrates and sessions judges, and juvenile courts
follow the special procedure laid down in the children's Act.

8. 8
Chapter 2: Forms of business enterprise
2.1. Sole proprietorship
a) Definition:
In the sole proprietorship, known alternatively as sole tradership, the proprietor is to
take all risks. Some of the favourable 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.
b) Principle legislation
All the laws related to an individual are applicable to a sole proprietorship.
c) General requirements to start a sole proprietorship business:
i. Trade license from city corporation/municipality/union council (local
government bodies)
ii. Taxpayer’s Identification Number (TIN)
iii. VAT Registration (in the cases where applicable)
iv. IRC (in the case of business related to import)
v. ERC (in the case of business related to export)
vi. License/permission from the authorities according to the nature of
business/profession
vii. Bank account
viii. 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.
2.2. Partnership firm
a) Description:
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

9. 9
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 realise the property of an
insolvent partner.
b) Principle Legislation
The Partnership Act, 1932;
c) General Requirements to Start a Partnership Business:
i. The Partnership Deed;
ii. Minutes of Partners’ Meeting;
iii. Trade License from City Corporation/Municipality/Union Council (Local
Government Bodies);
iv. Taxpayer’s Identification Number (TIN)
v. VAT Registration (in the cases where applicable)
vi. IRC (in the case of business related to import)
vii. ERC (in the case of business related to export)
viii. License/Permission from the authorities according to the nature of
business/profession
ix. Bank Account
x. 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.
2.3. Limited partnership firm
In Bangladesh, limited partnership firm in Bangladesh is not realistically available.
2.4. Branche/liasion/representative of foreign companies
a) Description:
A company expands its business by opening up its branch offices in various parts of
the domestic country as well as in other countries. A branch office refers to an
establishment which carries on substantially the same business and activity as is
carried out by its Head Office. Branch offices help in expanding the size of the market
for a company's product by attracting more customers; widening the scope of its
trading and manufacturing activities as well as bringing more opportunities and
opening unexplored avenues for it. Thus, these offices help to fuel the growth of the
company and enhance its profitability on a sustained basis.
The activities of Branch/Liaison/Representative office of a foreign entity shall remain
confined to those as set forth in the permission of BOI. The said offices shall strictly
follow the foreign exchange regulations of the government of Bangladesh. Generally,
no outward remittance of any kind from Bangladesh sources by the said offices is
allowed except the cases permitted by the foreign exchange regulations. The
Branch/Liaison/Representative office of a foreign entity shall have to be submitted

10. 10
income tax return to the competent income tax authority of Bangladesh. Security
clearance is required to be obtained from Ministry of Home, government of
Bangladesh. Such offices shall have to bring inward remittance at least USD 50,000
within 2 (tow) months from the date of the issue permission letter as establishment
cost and 6 months operational expenses.
b) Principal Legislation
i. The Investment Board Act, 1989;
ii. Rules & Regulations of Board of Investment (BOI);
iii. The Companies Act, 1994;
iv. The Foreign Exchange Regulation Act, 1947
c) General Requirements to Open Branch/Liaison/Representative Office of
Foreign Companies:
Foreign companies not registered in Bangladesh can set up a place of business in
Bangladesh in the form of a Branch Office or a Liaison Office. An investor can close
a Branch Office/Liaison Office/ Representative Office in Bangladesh by an
application with audit report, updated tax payment certificate, NOC from Bangladesh
Bank etc. and required formalities with RJSC shall have to be performed. An investor
can change the address of a Branch Office/Liaison Office/Representative Office in
Bangladesh by an application with certified copy of rent deed and board resolution
supported by a treasury chalan of specific amount. For to waiver the condition of BOI
Branch Office/Liaison Office/Representative Office the company have to apply for
the specific condition to waive in BOI.
2.4.1. Board of Investment (BOI)
Permission will be required from the BOI in order to open up a Branch Office and
shall submit application in the prescribed form along with the following documents:
i. Prescribed Application From, duly filled in, signed and stamped;
ii. Memorandum of Association (MOA) and Articles of Association (AOA) of
the Principal Company;
iii. Certificate of Incorporation;
iv. Name and Nationalities of the Directors/Promoters of the Principal Company;
v. Board Resolution to open a Branch/Liaison/Representative Office in
Bangladesh;
vi. Audited Accounts of the last financial year;
vii. Proposed organogram of the office;
viii. List of activities of the proposed office
All papers/documents must be attested by the Bangladesh Embassy/High Commission
of the country of origin. Embassy/High Commission of the applicant's country of
origin or Apex Chamber of Commerce of the country of origin.
2.4.2. Bangladesh Bank (BB)
Afterwards, permission is sought from Bangladesh Bank for opening branch/liaison
Office in Bangladesh by foreign entities including airlines, companies, firms under
Section 18B of the Foreign Exchange Regulation Act, 1947.
2.4.3. Registrar of Joint Stock Companies (RJSC)
Foreign Combines which establishes a place of business in Bangladesh shall, within
one month of the establishment of the place of business, deliver to the Registrar of
RJSC for registration—

11. 11
(a) A certified copy of the charter or status or memorandum and articles of the
company or other instrument constitution or defining the constitution of the company;
and if the instrument is not written in Bengali or English Language, a certified Penally
or English translation there of;
(b) The full address of the registered or principal office of the company; Chartered
Accountants
(c) A list of the directors and secretary, if any, of the company;
(d) The name and address or the names and addresses of one or more persons resident
in Bangladesh, authorized to accept on behalf of the company service of process and
any notice or other document required to be served on the company;
(e) The full address of the office of the company in Bangladesh which to be deemed
its principal place of business in Bangladesh.
3. Limited companies
Description
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:
a. Company Limited by Shares
i. Public Limited Company and
ii. Private Limited Company
b. Company Limited by Guarantees
a) Private Limited Company:
i. Restricts the rights to transfer the shares.
ii. Limits the number of its members to minimum 2 and maximum 50 excluding
the persons employed in the company;
iii. Prohibits any invitation to the public to subscribe for the shares or debentures
of the company and
iv. Entitles to commence business from the date of its incorporation.
b) Public Limited Company:
a. 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.
b. Has minimum 7 members but there is no maximum limit.
c. Have at least 3 Directors.
d. May a private company converted into a public company.
General Requirements to Set Up a Company:
Registrar of Joint Stock of Companies and Firms (RJSC)
To register a company with the Register of Joint Stock Companies and Firms,
promoters have to undertake activities in following steps:
i) Selection of the company name:

12. 12
The name should not be identical with or closely resemble to the name of an
existing company. An application in plain paper along with nominal required fees
is be submitted to the RJSRF for verification and clearance of the proposed name.
ii) Memorandum of Association (MOA):
MOA states the name of the company, whether it is public or private limited and
the location of the registered office at the company. The MOA should clearly spell
out the main objectives, the authorized capital, the divisions of this capital into
shares of fixed amount and liability of its members.
iii) Articles of Association (AOA):
The AOA are the regulations governing the internal management of the affairs of
the company and the conduct of its business. These articles are subordinate to and
controlled by MOA.
iv) Registration Application:
Prescribed Application Form for registration has to be filled in, signed and
submitted to the Registrar of the Joint Stock Companies and Firms.
5. Chief Inspector of Factories and Establishment
Any manufacturing company employing 10 (ten) or more workers is required to be
registered under the Labour Act, 2006 with the office of the Chief Inspector of
Factories and Establishment. The act is primarily to regulate working conditions and
to ensure safety in the factory.
6. Registration with Board of Investment
i. Application Form
ii. Trade License
iii. Limited Company
iv. Certificate of Incorporation
v. Memorandum and Articles of Association
vi. Name and address of other shareholder/director(s) of the project
vii. Additional documents for projects in certain sectors
viii. Copy of rental agreement or lease deed for premises or land purchase
document
ix. TIN Certificate
x. Registration Fee (Bank Draft)
7. Objective of the study:
7.1. Primary objective:
The first and most important objective of the assignment is to gather knowledge about
Practices of legal aspects of Business. Then to know about how to make trade
license, its benefits and drawbacks of not having trade license. The ways of getting
trade license is also an important matter.
7.2. Secondary objective:
a) Help students acquire knowledge and skills needed to carry out their
responsibilities and rights.
b) Help students increase their thinking skills and decision making process.
c) Information and ideas.
d) Apply questions to decision-making situations.
e) Increasing student’s vocabulary.
f) Help students to use skills in finding, comprehending, organizing, and
communicating with people.

13. 13
8. Practices of legal aspects/ formalities:
As we have surveyed about the legal formalities of business and found some
important things from different points of view. From our survey we learned that due
to easy rules & regulations most of the business firms maintained the legal formalities
that mean they have the trade license. According to the trade license law of our
country all fee’s including tax are paid at a time. That’s why they don’t need to worry
about other formalities. There are some advantages of making trade license. These are
given below…
8.1. Advantages of licensing:
i. A license allows a company to take a product to market without the expense of
setting up locally and all the risks and costs associated with that.
ii. A larger and more powerful licensee in a new market can provide instant
market access and deter competitors and imitators.
iii. A license can be used to enable products to be supplied locally where there is
no opportunity to manufacture in the locality.
iv. It is possible with the right kind of license and overseas business partner to
create an extensive market presence very early on in the product’s life cycle.
This will help make maximum profits for the licensor.
v. In certain circumstances it is possible to divide up a particular market so that
different companies can license the same product but apply it in different
areas. For example, it is possible to take disinfection kits and divide up the
market into human and animal markets then find different companies with the
right market presence.
vi. It is possible to work with a licensee in a foreign market and learn from them.
For example, it may be possible to improve products or to adjust them so that
they meet local market needs. This can often be done early on in the product’s
life cycle to help achieve better market coverage.
vii. An overseas licensee may well save a lot of expense in terms of research and
development. For example, reciprocal licensing in the car and
telecommunications industries enables companies to exploit the fruits of
research carried out by one company alone.
viii. Where well known brands are licensed overseas, the local licensee can take
advantage of an established brand with a known name and goodwill. It is very
important for the licensor to ensure that brand standards are maintained in an
overseas market.
ix. It is possible to negotiate further income streams from support services and
training.
8.2. Disadvantages of licensing:
i. It is important for the company to find the right partner to license with in a
local situation. Understanding what an overseas partner can do is essential to
making licensing a success.
UK Trade & Investment can help in finding the right individual or company.
ii. It is important to ensure that there are proper control provisions in the license.
It is especially important with licensing to have a well-drafted license drawn
up by experts. The license should contain things such as full audit provisions
and as licensor it may be important to police those audit provisions.

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iii. In the long term, royalty payments from a license may not provide the
maximum for a licensor. It could be that setting up locally can generate better
profits in the long run.
iv. It is absolutely key to the success of the license for it to be properly negotiated
and drafted. Licensing can be a complex arrangement and it is important for a
licensor to be properly guided in terms of royalty payments, audit provisions
and minimum sales.
v. The licensor is often required to provide technical assistance and training in
brand standards etc. depending upon where the licensee is based. This will
need to be factored into the licensing arrangements.
vi. The licensor must be satisfied that the licensee can make a local market from
the products. Some products are more popular in some cultures than in others.
9. Forms of taxation
9.1. Sales tax/vat
i. VAT is imposed on goods and services at stages of import stage,
manufacturing, supply, and trading;
ii. VAT is imposed on services provided in Bangladesh and also on the services
rendered from the outside Bangladesh;
iii. A uniform VAT rate of 15% is applicable for both goods and services;
iv. A registered person is entitled to claim back the VAT paid on purchase of
inputs subject to compliance with the provisions of VAT laws;
v. 15% VAT is applicable for all business or industrial units with an annual
turnover of Tk. 60 million and above, except in the cases specified;
vi. Turnover tax at the rate of 3% is liveable where annual turnover is less than
Tk. 60 million;
vii. Truncated rate also applied in the cases specified by VAT laws which has
been determined on the basis of assumed percentage of value addition;
viii. Supplementary Duty (SD) is applicable as per 3rd Schedule of the VAT Act,
1991;
ix. Exemption of VAT or imposition of VAT @0% is regulated by Section 3
(Export or Deemed Export), Section 14 (goods/service declared by the
government), 1st and 2nd Schedule of the VAT Act, 1991.
9.2. Stamp duty
Stamp duty is one of the main sources of Government revenue collection. All matters
relating to stamps are regulated through The Stamp Act. 1899 and Stamp Manual,
1931.
Stamp duties are applicable on the following:
i. Agreements & contracts
ii. Notes
iii. Certified copies
iv. Documents
v. Land registration, etc.
9.3. Property taxes
A property tax is somewhat similar to a wealth tax. Only a certain portion of an
individual’s tangible wealth is taxed at a certain rate, which is often a flat rate, but
may vary under different circumstances or jurisdictions. The tax base may include,
but is not limited to, a variety of assets such as real estate, land, family home,
investment property, and private firms and forests lands.

15. 15
According to Section 21(1) of the Income Tax Ordinance (ITO), the following income
of an assesses shall be classified and computed under the head "Salaries", namely:-
(a) Any salary due from an employer to the assesses in the income year, whether paid
or not;
(b) Any salary paid or allowed to him in the income year, by or on behalf of an
employer though not due or before it became due to him; and
(c) Any arrears of salary paid or allowed to him in the income year by or on behalf of
an employer, if not charged to income-tax for any earlier income year.
For the purpose of computing the income chargeable under the head "salary", the
value if perquisites, allowances and benefits includable in the said income shall be
determined in accordance with the provision of the rule 33A to rule 33J, whichever is
applicable? The significant components of salary which are excluded there from for
the purpose of tax are as follows:
a. Where the house rent allowance is receivable by the employee in cash,
the amount, if any by which the house rent allowance so receivable
exceeds fifty percent of the basic salary or taka 15,000 per month,
whichever is less, shall be included in his income.
b. Where the employee is provided with rent free accommodation, the
rental value of the accommodation or twenty five percent of the basic
salary of the employee, whichever is less, shall be included in his
income.
c. Where no conveyance is provided by the employer and the conveyance
allowance is receivable by the employee on cash, the allowance so
receivable in excess of Tk. 24,000/= shall be included in his income.
d. Where the conveyance is provided by the employer for the use of the
employee partly or exclusively for personal or private purposes, there
shall be included in the employee's income, an amount equal to seven
and half percent of the employee's basic salary.
e. Where any amount is payable to the employee by way of
hospitalisation or medical expenses, the amount, if any, by which the
sum receivable by him exceeds the actual expenditure incurred by him
shall be included in his income.

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Chapter 3: Survey report

17. 17

18. 18

19. 19
Chapter 4: Findings & Recommendations
Findings
After completing the assignment and survey we found some important things. These
are-
i. Geographical and economical situation of Bangladesh.
ii. Currency and Banking system, government politics and legal systems of
Bangladesh.
iii. Rules and regulations of different types of business
iv. Trade license, TIN, VAT, IRC, and ERC is needed to start a sole
proprietorship business.
v. Partnership deed, TIN, VAT, IRC, ERC, License and bank account are needed
to start a partnership business.
vi. The branch offices should apply the condition to waive in Board of Investment
(BOI).
vii. To open branch office permission will be required from the BOI.
viii. The advantages of having trade license.
ix. Disadvantages of not having trade license.
x. Different form of tax.
xi. Importance of paying tax for the development of our country.
xii. Ways of paying tax.
Recommendations:
When we surveyed about the legal aspects of business we saw that there are different
types of rules and regulations of business. Most of the business man’s are familiar
with this rules and regulations and they have trade licenses, they also paid tax in
proper time etc. some are willingly avoid this rules. They known about this but they
don’t want to involve with this. Some of them made trade license with the help of
others. And some of these are fully unfamiliar with this rules and regulations.
i) Duties of the Business man
a. Business man should know the rules and regulations before starting business.
b. They shouldn’t deny it thinking unnecessary.
ii) Duties of the customers
a. Customers should judge whether the business is legal or illegal before making
transaction.
b. If the business is illegal they should boycott it.
c. They also should inform the legal forces about any kind of illegal business.
iii) Duties of the authority/government
i. Government should make easy the way of paying taxes and making licenses.
ii. Government has started income tax fair for last 3 years; but it should be spread
out whole through the country.
iii. Advertising can play an important role in this case.
iv. People those who escape tax they should be treated as national enemy.

20. 20
References
i. http://www.allbusiness.com/legal/international-trade-law-treaties-agreements
ii. ILO and BGMEA (2003). “A Handbook on Relevant National Laws and
Regulation of Bangladesh”, BGMEA, Dhaka, Bangladesh
iii. ———.2008. Bangladesh Bank, Economic Trends,
www.adb.org/documents/books/ado/2008/BAN.pdf
iv. ———2011. BGMEA, Leading to Bangladesh prosperity,
http://bgmea.com.bd/home/pages/TradeInformation
v. http://www.genderandtrade.org
vi. ——— 2008. EPB Report on Bangladesh Garments Statistics and Future
Challenge, http://articles.textileclass.com/bangladesh- garments-statistics-and-
future-challenge, viewed on 11/10/2010
vii. Gender and Development, Working Paper Series No. 12, The World Bank
Development Research Group/Poverty Reduction and Economic Management
Network, http://siteresources.worldbank.org, viewed on 22/08/2008
viii. Massey, I.P. Conceptual objections against the Growth of Administrative Law.
Administrative Law, 5th Ed; Eastern Book Company: 34, Lalbagh, Lucknow-
226001, India, 2001;21.
ix. Takwani, C. K. Rule of Law. Lectures on Administrative Law, 3rd Ed; Eastern
Book Company: 34 Lalbagh, Lucknow-226001, India, 1998; 20-21.
x. Thakker, C.K. Basic Constitutional principles. Administrative Law, 1st ed;
Eastern Book Company: 34 Lalbagh, Lacknow-226001, India, 1992; 26.