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The Financial Express

79.35pc companies never submit returns to RJSC

Legal amendment for obligatory return submission soon: Registrar


| Updated: January 24, 2023 17:13:12


79.35pc companies never submit returns to RJSC

Some 162,682 or 79.35 per cent of companies never submitted their returns to the Office of the Registrar of Joint Stock Companies and Firms (RJSC) after start-up registration.

Of the total 205,000 registered companies, 42,318 are submitting their returns regularly or irregularly, according to RJSC data.

According to the state entity, a company after its formation needs to submit returns including balance sheet (profit and loss account), directors' position and shares and auditor consent to the primary regulator.

Meanwhile, 4,298 companies got registration from the RJSC in the first half of the ongoing fiscal year.

Of the total registered ones, 3,650 public limited companies and 201,816 private limited companies.

People familiar with the development told the FE that the companies are not legally bound to submit their returns.

Due to legal loopholes, they are not submitting their returns in time and even majority of them are never paying heed to this optional provision, according to them.

"Legal amendment must be done to this end, otherwise they will continue taking the advantage," they stated in a similar opinion.

The companies which seek loans from the financial institutions are coming to the RJSC to file their return--to fulfill the prerequisite--they observed.

Centre for Policy Research (CPD) research director Dr Khondaker Golam Moazzem stressed the need for submission of company financials as it upholds accountability and ensures transparency of the companies.

"It is vitally important to know the operational status of the companies and how are expanding or constricting after they took registration from the RJSC," he said explaining.

The RJSC and the National Revenue Board (NBR) should work together to make a way to ease the return submission for the companies, Dr Moazzem suggests.

To make the companies legally bound, an amendment to the law should be brought, he opines.

Sheikh Shoebul Alam, Registrar (Additional Secretary), Dhaka Office (Head Office), said the government has taken initiative to amend the company law, including the return-submission proviso, with a view to making the companies compliant and easing the doing-business ambiance in the country.

Regarding return submission, he said the companies can submit their return online easily. However, they are not currently legally bound to do that.

"The companies are taking inordinate time to submit their returns due to the lax legal provision," Mr Shoebul added.

As many as 9,000 new firms or companies, on average, are registered with the entity annually.

The number of registered companies was 7,556 in the fiscal year (FY) 2014-15 while it stood at 10,822 in FY 2021-22, the RJSC data revealed.

People familiar with the matter also said the government has to lose revenue if RJSC cannot take action against the companies who have not been submitting their returns for a long period of time.

Most of the companies have been running business in the country without their return submission, they added.

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