Bangladesh—restructuring and insolvency guide
Produced in partnership with Shahwar Jamal Nizam and Abu Nazar of DFDL.

The following Restructuring & Insolvency practice note produced in partnership with Shahwar Jamal Nizam and Abu Nazar of DFDL. provides comprehensive and up to date legal information covering:

  • Bangladesh—restructuring and insolvency guide
  • Questions
  • What is the primary legislation which governs corporate insolvency? And, are there any other laws in force dealing with corporate insolvency?
  • Is there any conflict of provisions in the corporate insolvency laws?
  • Who can initiate a corporate rehabilitation proceeding under the insolvency laws?
  • What are the rights of secured versus unsecured creditors for corporate insolvency proceedings?
  • When can a receiver/liquidator be appointed? Who can appoint a receiver under the applicable laws?
  • What are the protections available to a company during the corporate insolvency proceeding?
  • Does the law separately provide for the duties of directors and how does it pave with the existing laws?
  • Are there any restrictions on the power of directors with the onset of corporate insolvency?
  • More...

Bangladesh—restructuring and insolvency guide

Questions

What is the primary legislation which governs corporate insolvency? And, are there any other laws in force dealing with corporate insolvency?

There are two laws that deal with bankruptcy and insolvency. They are (1) the Bankruptcy Act 1997 (Bankruptcy Act) and (2) the Companies Act 1994 (Companies Act). The Bankruptcy Act is the primary legislation that governs the bankruptcy laws in Bangladesh. While the Bankruptcy Act deals with bankruptcy in general, sections 234–321 of the Companies Act deals with the insolvency of companies.

Is there any conflict of provisions in the corporate insolvency laws?

No, there are no conflicting provisions between both laws.

Who can initiate a corporate rehabilitation proceeding under the insolvency laws?

Pursuant to the Bankruptcy Act, both the creditor and a debtor can file a petition under bankruptcy law in Bangladesh. Eligible creditors can file a petition on the ground of default of BDT 500,000 and the debtors can file a petition under the Bankruptcy Act if the debtor is unable to pay the debt amount of BDT 200,000.

Whereas, under the Companies Act, an application for winding up of a company can be filed by the company itself, its members, by any creditor, contributory, or by the Registrar of Joint Stock Companies And Firms. A company may be wound up by the court due to the following circumstances:

  1. if the company has by special resolution resolved

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