Company Directors in Bangladesh: Appointment, Resignation, Removal, Form XII and What a Director Is Liable For

In this guide: Who can be a director, and how many · Form IX, Form XII and the 14-day rule · Resignation, removal and vacation of office · The managing director, the board and meetings · Duties and personal liability

The short answer

To appoint: the candidate signs Form IX (consent to act), supplies NID or passport, eTIN, photograph and mobile number; the members pass a resolution at a general meeting (or the board fills a casual vacancy under the Articles, to be confirmed at the next AGM); the company files Form XII at app.roc.gov.bd within 14 days with Form IX and the minutes (Tk 200 + VAT; Charter time 20 days). To resign: the director writes to the board, the board records the resignation (it is effective on receipt unless the Articles say otherwise), and the company files Form XII within 14 days — if the company will not, the director may file the resignation letter with the Registrar directly, and should, because until Form XII is updated he remains a director on the public record and liable as one. To remove: the members pass an extraordinary resolution under s.106 at a meeting of which the director had notice and at which he may be heard, then Form XII. Keep the register of directors (s.115) and the register of directors’ shareholdings (s.104) in the minute book, hold a board meeting at least once every three months (s.96), and renew the managing director’s appointment before five years run out (s.110). Every director needs a TIN and must file a return; a resident foreign director needs a work permit.

Who can be a director, and how many

Section 90 fixes the minimum at two directors for a private company and three for a public one; the Articles set the maximum. A director must be an individual — a company cannot be a director, though it may nominate one — and be of sound mind, not an undischarged insolvent, and not disqualified by the Articles or by a Court order. There is no nationality or residence requirement in the Act: a foreigner may be a director, resident or not, but a resident foreign director working in Bangladesh needs an Invest Bangladesh (formerly BIDA) work permit and the company must obtain an eTIN for every director regardless of nationality, because RJSC will not accept Form XII without it. Directors need not be shareholders unless the Articles require qualification shares; where they do, the shares must be taken within 60 days of appointment (s.97) or the office is vacated. One person may be a director of any number of companies. The first directors are named by the subscribers to the Memorandum and in Form IX at incorporation; later directors are elected by the members at a general meeting (s.91), with the Articles usually providing for retirement by rotation and for the board to fill casual vacancies.

Form IX, Form XII and the 14-day rule

Two forms run the register. Form IX is the written consent to act as director required by s.92 before a person is named as a director — a one-page signed consent with the director’s particulars — and RJSC asks for it for every new director. Form XII is the particulars of directors, managers and managing agents under s.115: the full name, father’s or husband’s name, nationality, address, occupation, date of appointment, eTIN and mobile number of each director, and the date of and reason for any cessation. The company must file it within 14 days of any appointment or change, and the Citizen’s Charter lists the documents: the board or general meeting minutes, Form IX for new directors, NID or passport, eTIN and photographs, and for a resignation the letter and the board’s acceptance; fee Tk 200 + VAT, 20 days under the Charter. A Form XII that is years out of date is the commonest defect we find in a company file, and because banks, buyers and courts treat it as the record of who may bind the company, a resigned director who never checked that Form XII was updated can find himself served with a suit or a tax demand as a current officer. The register of directors kept at the registered office (s.115) and the register of directors’ shareholdings (s.104) are the company’s own records and are inspected by the Registrar and by members.

Resignation, removal and vacation of office

Resignation: the Act does not prescribe a procedure; the Articles usually provide that a director may resign by notice in writing, effective when the board receives it or on a later date in the notice. The board minutes the resignation and the company files Form XII. A resigning director should obtain a copy of the filed Form XII; where the company refuses to file, a letter to the Registrar enclosing the resignation and the delivery proof is accepted in practice and starts the clock on the director’s own liability. A resignation that leaves the company with fewer than two directors is still effective, but the remaining director must appoint another promptly. Removal: s.106 lets the members remove a director before the end of his term by extraordinary resolution (three-fourths majority) at a meeting of which special notice has been given to the director, who is entitled to be heard; a director holding office for life under the original Articles of a private company has some protection, and a removal in breach of a shareholders’ agreement sounds in damages. Vacation under s.108 is automatic: insolvency, unsound mind, conviction of an offence involving moral turpitude, failure to take qualification shares, absence from three consecutive board meetings (or all meetings for three months) without leave, taking a loan from the company without the required approval, or acting as director while disqualified. The board records the vacation and files Form XII; the director has a right to challenge the record in the Company Court.

The managing director, the board and meetings

The managing director is a director entrusted with substantial powers of management by the Articles, a resolution or an agreement; s.110 limits an appointment to five years at a time, renewable, so a managing director appointed at incorporation in 2019 who was never reappointed has been acting without authority since 2024 — the bank’s mandate and every contract he signed since are exposed. The appointment, term, remuneration and powers go in a board resolution and ideally a service agreement; the same person may be chairman unless the Articles separate the roles. A private company has no statutory requirement for an independent director or a company secretary (listed companies do under the BSEC code), but the Act assumes a secretary or manager exists to countersign returns. The board must meet at least once in every three months and at least four times a year (s.96); notice and quorum are per the Articles (Table A: quorum as fixed by the directors, otherwise two); minutes are kept in a bound minute book and signed by the chairman (s.89), and a resolution in writing signed by all directors is valid if the Articles allow it. Our board meetings guide has the formats.

Duties and personal liability

The Act contains no general code of directors’ duties; the duties come from the Articles, the general law of agency and trust, and specific sections. A director must act in good faith in the company’s interests, within the powers given, with reasonable care, and must not profit from his position or place himself in conflict without disclosure — s.105 requires disclosure of any interest in a contract with the company and bars voting on it; s.103 restricts loans to directors without the general meeting’s approval; s.109 bars assignment of office. Personal liability arises in three ways. First, statutory fines: nearly every filing default — Form XII, annual return, accounts, AGM — carries a fine on “every officer in default”, which includes directors, and tax law makes the directors jointly and severally liable for a private company’s unpaid tax where it cannot be recovered from the company. Second, guarantees: limited liability does not cover the personal guarantees directors sign for bank facilities, which survive resignation unless released. Third, fraud and misfeasance: on a winding-up the Court can order directors to repay or compensate for misfeasance and breach of trust (s.331), falsifying the company’s books is an offence (s.332), and delinquent officers can be prosecuted (s.333); and cheques signed on an account without funds expose the signatory personally under the Negotiable Instruments Act. Directors’ and officers’ insurance is available in Bangladesh but rare outside multinationals; a current Form XII, a clean register and a dated resignation are the practical protections.