Most firms skip submission of financials to RJSC

Dhaka,  Wed,  26 October 2016
Published : 14 Oct 2016, 23:54:14

Most firms skip submission of financials to RJSC

Doulot Akter Mala

Only a few companies submit annual returns to office of the Registrar of Joint Stock Companies and Firms (RJSC), thus leaving room for tampering with information of many firms' shareholders, sources said.

According to RJSC data, some 40,000 submit their financials out of 139,000 companies registered with office of the Registrar.

As per companies law, a company has to submit annual returns furnishing name of company, its director, shareholders, allocation of new shares, share transfers, percentage of shares of the company directors, profit-and-loss account, and mortgage against bank loan.

The RJSC has the authority to impose penalties up to Tk 4,000 on a company for not submitting returns.

However, the registrar has no authority to take stern punitive action or stop operation of a company as per the companies' law.

Companies have to submit their account to the RJSC for the sake of their own security as well.

Registered companies have to file two types of returns---annual and on any kind of changes and organizational amendments. RJSC approves the returns and keeps records of those.

A senior RJSC official said there is now no specific timeframe for submission of such returns, which is a major cause of non-compliance of the companies.

Generally, the RJSC asks the companies to submit return within 14 months of holding annual general meeting (AGM).

The RJSC official said regular submission of returns could help the companies reduce the risk of forgery through transfer of companies' shares to other names.

"It is the most common case in recent times. Many of the company owners faced the incidence of breach of contract by their counterparts. They transfer shares to other shareholders concealing information from the company owner," he added.

With the returns, the Registrar office will have the documents of the actual shareholders of a company.

"If any company wants to amend its contract, it will have to come to the registering authority and sign agreement on consensus," he said.

In case of forgery with the companies' shares, the RJSC can submit the original documents to court for taking action against the fraud, he added.

However, the registering authority is not empowered to take punitive action--it can recommend to the court, he pointed out the lacuna.RJSC will have the valid documents of the companies and the numbers of their actual shareholders if the company owners file their returns regularly, the official said.

Apart from registration and returns, RJSC gives clearance on company names, issues certified copies, and winds up or strikes off non-functioning companies.
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