Course Title: Introduction to Business
Assignment #2
1. (a) What is a company? What are its main features?
A company is a legally recognized organization formed by a group of individuals to carry on a business.
Once registered, it becomes a separate legal entity—this means it exists independently from its owners. It
has rights and responsibilities under the law, like entering contracts, owning property, and being sued or
suing others. The company continues to exist regardless of changes in its membership.
Key features include:
●​
●​
●​
●​
●​
Separate legal entity: A company is distinct from its shareholders.
Limited liability: Members are only liable up to the amount they invested.
Perpetual succession: The company remains unaffected by death or departure of its members.
Common seal: Used as the company’s official signature on documents.
Transferable shares: Shares can usually be bought and sold (unless restricted in private
companies).
●​ Artificial person: Operates through human agents (directors) since it has no physical presence.
●​ Registration required: It must be incorporated under the Companies Act.
1. (b) How is a private limited company formed in Bangladesh?
Forming a private limited company in Bangladesh involves several legal steps to register with the
Registrar of Joint Stock Companies and Firms (RJSC):
1.​ Name Clearance: Apply for and obtain approval for the company’s name from RJSC.​
2.​ Prepare MOA and AOA:
○​ The Memorandum of Association (MOA) states the objectives of the company.
○​ The Articles of Association (AOA) outlines internal rules and management procedures.​
3.​ Open a Bank Account (if foreign shareholders are involved):
○​ Submit draft documents and identification for provisional bank account.​
4.​ Deposit Share Money (for foreign shareholders):
○​ Transfer share capital into the account and obtain an encashment certificate.​
5.​ Submit Documents to RJSC:
○​ Include director and shareholder info, capital details, MOA, AOA, and supporting
documents.​
6.​ Receive Certificate of Incorporation:
○​ Once verified, RJSC issues a digital incorporation certificate along with MOA, AOA, and
Form XII (listing directors).
1. (c) What are the differences between a private and public limited
company?
There are several important differences between private and public companies:
Point of Difference​
Private Limited Company
Public Limited Company
Minimum members​
2 members​
7 members
Maximum members​
50 members​
No maximum limit
Transfer of shares​
Restricted by company rules​
Freely transferable
Public invitation​
Cannot invite the public to buy
shares
Can invite the public to subscribe to
shares or debentures
Regulations​
Fewer rules, lower compliance
costs
Strict regulations, higher compliance
requirements
Financial disclosure​
Not required to publish financial
statements publicly
Must disclose financials to the public
Stock exchange listing​
Cannot be listed on a stock
exchange
Can be listed on a stock exchange
Risk and transparency​
Less transparent; higher
investment risk​
More transparent; lower investment
risk due to regulation
1. (d) Why do businesses go through mergers and acquisitions?
Mergers and acquisitions help companies grow and strengthen their position in the market. A merger
combines two businesses into one, while an acquisition means one company buys another. Companies
often choose this route for strategic or financial benefits, such as:
●​
●​
●​
●​
●​
Gaining skilled staff or better management systems
Accessing new assets or technologies
Expanding into new markets more affordably
Reaching more customers and increasing market share
Diversifying products or services
●​ Cutting overheads by combining resources
●​ Reducing competition
●​ Accelerating growth faster than organic expansion​
2. (a) What is a share and what are the types of shares?
A share represents a unit of ownership in a company. Shareholders invest in return for potential profits
(dividends) and limited liability. Companies can issue different types of shares depending on their needs.
Main types of shares:
●​
●​
●​
●​
●​
Ordinary shares: Basic ownership, with voting rights. Dividends are not guaranteed.
Preference shares: Priority in receiving fixed dividends and return of capital.
Redeemable preference shares: Can be bought back by the company at a set time or condition.
Convertible preference shares: Can be converted into ordinary shares later.
Treasury shares: Reacquired shares held by the company itself; they have no voting or dividend
rights.
2. (b) What rights do shareholders have?
Shareholders enjoy a range of rights, depending on their share class. Common rights include:
●​
●​
●​
●​
●​
●​
●​
●​
Voting on important decisions (e.g., electing directors, changes in constitution)
Receiving dividends when declared
Attending and speaking at general meetings
Getting copies of annual reports and financial statements
Inspecting meeting records
Receiving fair treatment from the company
Claiming their share of assets if the company is liquidated
Preventing the company from carrying out illegal or unauthorized acts
2. (c) How is a company director appointed?
At the time of incorporation, the initial directors are those who sign the Memorandum. After that, members
of the company elect directors in general meetings. If a director leaves during their term, the other
directors may appoint someone to fill the vacancy temporarily.
In public companies, at least one-third of directors must retire by rotation and can be reappointed by
shareholders. Directors must meet the legal qualifications to hold the position.
3. (a) What is the Article of Association and how does it differ from the
Memorandum of Association?
The Articles of Association (AOA) is a document that sets the internal rules of the company—how it will
be run, how directors are appointed, how meetings are conducted, and how finances are handled. It
functions like a rulebook for day-to-day operations.
The Memorandum of Association (MOA), on the other hand, defines the company’s purpose and
scope. It outlines what kind of business the company can do and its relationship with the outside world,
including shareholders and the public. In short:
●​ MOA = What the company is
●​ AOA = How the company is run
3. (b) How can a company alter its Memorandum of Association?
A company can only change its MOA under specific legal conditions. A special resolution must be passed
by shareholders, usually to expand the company’s business, shift location, or merge with another firm.
Once passed, the company must seek approval from the court.
Before confirming the change, the court ensures:
●​ Proper notice was given to affected parties (e.g., creditors, debenture holders)
●​ Any objections are resolved or compensated
Once approved, the revised MOA must be filed with the Registrar. If rejected, the company may appeal to
the government.
3. (c) What should be included in a board meeting report?
The board of directors must present a report with the company’s financial statements during the general
meeting. This report should include:
●​
●​
●​
●​
●​
●​
The state of the company’s affairs
Proposed reserves or retained earnings
Recommended dividends (if any)
Major events affecting the financial position after year-end
Changes in the business structure or subsidiaries
Comments on any adverse remarks made by the auditors
This report helps shareholders understand how the company is doing and how decisions are being made.
Assignment #3
1. (a) What do you mean by franchising business? Explain the issues that are included in
the franchising agreement.
Franchising is a system for distributing goods or services under a brand name through outlets owned by
independent business owners. It's a two-party legal agreement where one party (the franchisee) is
granted the privilege to operate a business using the methods and terms specified by the other party (the
franchisor). The franchisor continually supplies know-how or brand identification, while the franchisee
retains the rights to profits and bears the risk of losses.
A franchise agreement usually includes:
●​ Initial Fees & Royalties: Franchisees pay an upfront fee and regular royalties based on sales.
●​ Capital Investment: The franchisee must invest a certain amount to start the business.
●​ Business Management: Both parties aim for profitability, requiring efficient management and
customer satisfaction.
●​ Product Control: Franchisees can only sell approved goods or services.
●​ Termination Terms: The agreement can be canceled if the franchisee fails to meet performance
or operational standards.
1. (b) Do you find any franchise businesses in Bangladesh? How do they operate?
Yes, franchise businesses are present in Bangladesh. Bangladesh is considered attractive for franchise
development due to its dense population, growing middle class, and plentiful consumer demand in major
cities like Dhaka and Chittagong. Additional benefits for foreign companies include a low-cost labor force
and a lack of specific regulations barring franchise operations.
These brands operate under agreements with local business partners who manage operations following
global standards. They:
●​
●​
●​
●​
Adapt pricing and services to local consumer needs.
Maintain brand consistency in design, food quality, and customer service.
Benefit from a large urban market and low labor costs.
Face challenges like cultural adaptation and currency risk.
1. (c) What is small business? Describe the opportunities of small business in
Bangladesh.
A small business is an enterprise that is comparatively small in size, typically operating in a
geographically localized area, employing fewer than 100 employees, and financed by an individual or a
small group. According to Bangladesh's Industrial Policy 1999, it refers to enterprises employing fewer
than 50 workers (excluding cottage units) and/or with a fixed capital investment of less than Taka 100
million.
Opportunities in Bangladesh:
●​
●​
●​
●​
Manufacturing: Garments, handicrafts, and small factories.
Services: IT, salons, repair services, consultancy.
Retailing & Wholesaling: Local shops, distributors, and supply chains.
Home-Based Businesses: Catering, tailoring, e-commerce, day care
These businesses help reduce unemployment and promote local entrepreneurship.
2. (a) What is the cooperative form of business? State the principles to be followed in
cooperative business.
A cooperative is a people-centered enterprise owned, controlled, and run by and for its members to
achieve common economic, social, and cultural needs and aspirations. Based on the philosophy of
self-help and mutual help, cooperatives bring people together in a democratic and equal way. It focuses
more on service than profit and operates democratically.
The principles that should be followed in a cooperative form of business are:
●​
●​
●​
●​
●​
●​
●​
Voluntary Membership: Open to all willing participants.
Democratic Control: Each member has one vote.
Economic Participation: Members invest and share profits fairly.
Autonomy: Operates independently even if it partners externally.
Education and Training: Members and staff receive training.
Cooperation Among Cooperatives: Work together at various levels.
Concern for Community: Committed to social and environmental well-being.
2. (b) How will you assess the historical existence of cooperative business?
The historical existence of cooperative businesses in Bangladesh can be assessed through key
legislative developments and organizational structures:
●​ British Period (1904–1947): The British government initiated cooperative societies in India by
promulgating the Cooperative Societies Act in 1904, primarily encouraging agricultural
cooperative credit societies. This was followed by an amended law in 1912 to strengthen the
movement, and further amendments in 1940 with the Bengal Cooperative Societies Act to
enhance effectiveness.
●​ Post-Partition (1947–1971): After the Partition of Bengal in 1947, efforts were made to establish
an apex cooperative bank in East Pakistan. The East Pakistan Provincial Cooperative Bank was
founded on March 31, 1948.
●​ Post-Independence (1971–Present): After the liberation of Bangladesh, the East Pakistan
Provincial Cooperative Bank was reconstituted as Bangladesh Jatiya Samabaya Bank Ltd, later
renamed Bangladesh Samabaya Bank Ltd in 1977. Current laws include the Cooperative
Societies Ordinance (1984) and Rules (1987).
●​ Structural Levels: Cooperative societies in Bangladesh operate at three levels: the
Bangladesh Samabaya Bank Ltd. at the apex, central cooperative banks and central
cooperative societies in the middle, and primary societies at the field level.
2. (c) How will you make decisions about the selection of appropriate types of business
ownership? Explain.
Selecting the appropriate form of business ownership depends on several factors, as no single form is
ideal for all situations. An entrepreneur should consider the following:
●​ Nature of Business: Small-scale or skilled trades suit sole proprietorships; partnerships work for
pooled skills; large operations need companies.
●​ Area of Operations: A local or limited operational area may suggest a proprietorship, while
widespread national or international markets indicate a company form.
●​ Degree of Control: If direct control is desired, proprietorship or partnership is suitable. If direct
control isn't essential, a company might be preferred.
●​ Capital Requirements: Low capital = sole/traditional business, high capital = company.
●​ Extent of Risk and Liability: If willing to take full risk, go for sole proprietorship. If not, choose a
company with limited liability.
●​ Duration of Business: For temporary or ad hoc businesses, proprietorships or partnerships are
easier to form and dissolve. For permanent operations, companies or cooperatives, with their
perpetual succession, are more suitable.
●​ Government Regulations: Less government control = sole proprietorship/partnership; more
control = company/cooperative.
●​ Tax Burden: Companies face flat taxes, while individuals face progressive tax rates. I will choose
depending on expected profits.
3. (a) What is business ethics? What business activities are considered unethical?
Business ethics is the evaluation of business activities and behavior as right or wrong. Ethical standards
in business are based on commonly accepted principles of behavior, stemming from societal
expectations, the firm itself, the industry, and an individual's personal values. It’s about doing what’s right
for customers, employees, society, and the company.
●​
●​
●​
●​
●​
●​
●​
●​
Unethical business practices include:
Lying or hiding information from customers.
Bribery or using influence for personal gain.
Exploiting workers, especially in foreign operations.
Selling unsafe or fake products.
Abusing power or mistreating employees.
Misleading advertising or false promises.
Ignoring environmental or safety standards.
3. (b) Explain the ways of encouraging ethical behavior among the employees of the
organization.
Many organizations take positive steps to encourage ethical behavior among employees:
●​ Ethics Courses and Training: Organizing workshops and training sessions for employees.
●​ Establishing a Code of Ethics: A clear document stating company values and acceptable
behavior.
●​ Enforcement and Rewards/Punishments: Reward ethical behavior and penalize unethical acts.
It can limit opportunities for employees to act unethically.
●​ Encouraging Whistle-blowers: Encourage reporting of wrongdoing with job security and
anonymity.
Ethical culture begins from the top leaders must set the example.
3. (c) Discuss the responsibilities of business concern to its consumers, employees,
environment, and investors.
Businesses have social responsibilities that go beyond profit-making, involving deliberate efforts to
positively impact society and reduce negative effects.
●​ Responsibilities to Consumers:
○​ Ensure product safety, clear information, and fair pricing.
○​ Respect their right to choose and be heard.
●​ Responsibilities to Employees:
○​ Provide a safe, fair, and inclusive workplace.
○​ Offer training and equal opportunities.
●​ Responsibilities to the Environment:
○​ Reduce pollution and waste.
○​ Support sustainability through recycling and green practices.
●​ Responsibilities to Investors:
○​ Use funds responsibly and transparently.
○​ Ensure fair returns and prevent insider trading.