Sales and Purchase Agreement in Bangladesh

by Barrister Tahmidur Rahman | Jan 15, 2023 | 2023, Law

SPA agreement in Bangladesh

What is the meaning of a Sales and Purchase Agreement (SPA)?

A Sales and Purchase Agreement (SPA agreement in Bangladesh) is a legal contract between a property buyer and seller. This agreement is legally binding and clearly explains the terms and conditions of the transaction. A SPA’s purpose is to define the legal obligations and protect the rights of the transaction’s parties. Common SPA transactions include the sale of real estate, goods, stock, or other assets. SPAs are not used to sell services.

An SPA is typically entered into in mergers and acquisitions by the buyer and seller(s) of a target company’s stock, with the seller(s) agreeing to sell a specific number of shares to the buyer for a specified price. The provisions and mechanics of an SPA can be worth more than the headline price. A SPA with clear financial terms is critical in achieving these goals, whether selling a business to achieve a clean exit at a predictable price or acquiring a business with appropriate remedies in place should the target company’s financial position not be as represented.

The SPA is negotiated throughout the transaction during the M&A process. After the buyer has completed due diligence to determine the true state of the company for sale, the final phase of the transaction is to draft the SPA and determine the company’s sale price.

Key Learning Points

• The SPA is the principal document that lays out the terms of a transaction and is negotiated by the buyer and seller.
• Clear and solid financial terms in the SPA are essential to closing a successful transaction.
• Prior to drafting the SPA, the parties usually negotiate and execute a term sheet, which addresses all the principal terms of the transaction, which can then be incorporated into the SPA.
• An M&A transaction is typically accompanied by extensive due diligence before the SPA is finalized.
• SPAs may also be affected by existing shareholders’ agreements between the shareholders of a target company

Key components of a SPA

In essence, the sale and purchase agreement clarifies the terms of the transaction so that both parties are on the same page. Typical contract terms include the purchase price, the closing date, the amount of earnest money the buyer must submit as a deposit, and a list of included and excluded items.

The purchase and sale agreement is one of the most significant documents in a business owner’s life. Due to this, it should be approached with caution and rigor, with legal professionals guiding both the seller and the buyer.

Common characteristics and terms of a Sale and Purchase Agreement (SPA).

1 The parties to the contract

In the simplest form of a sale, there are only two parties to the agreement: the seller and the buyer. However, additional parties may be involved if, for instance, the company being sold has multiple shareholders. To sell their shares, each of these shareholders will be required to sign the sale and purchase agreement.

2 Contract for sale and purchase

This provision is typically the shortest and simplest in the SPA. However, it is one of the most important, as it ensures that full legal ownership of the shares (also known as “title”) and all rights that attach to the shares are properly transferred (e.g., rights to dividends). Typically, this provision also states that the shares are unencumbered, reassuring the buyer that the seller has not pledged any of the shares to a bank or other lender.

Consideration No. 3

Buyers pay a seller for an acquired company in the form of cash, debt (such as a promissory note issued by the buyer), shares of the buyer, or a combination of these.

4 Restriction clauses

The purchaser will want to prevent the seller from launching a new, competitive business that will detract from the value of the company being sold. Therefore, the sale and purchase agreement will include restrictive covenants prohibiting the seller (for a specified time period and within specified geographic regions) from soliciting existing customers, suppliers, or employees, and from competing with the company being sold in general. These covenants must be reasonable in terms of geography, scope, and duration. Otherwise, they could be in violation of competition law.

5 Warranty and indemnity provisions

Warranties are factual assertions made by a seller in the SPA regarding the condition of the sold company. If a warranty later proves to be false and the company’s value decreases, the buyer may have a claim for breach of warranty. All aspects of the company, including its assets, accounts, material contracts, litigation, employees, property, insolvency, intellectual property, and debt, are covered by the warranties.

If more specific risks are identified during due diligence, they are likely to be covered by an appropriate indemnity in the sale and purchase agreement, in which the seller agrees to reimburse the buyer pound for pound for the indemnified liability.

(6) Precedent conditions

Simultaneous signing and closing (where the parties sign the SPA and close the sale on the same day) is the preferred and simplest method for concluding a transaction. Occasionally, however, there is a need for a delay between the signing and completion of a contract in order to satisfy certain final conditions. These are commonly known as “conditions precedent” and include tax authority clearances, merger approval by authorities, and third-party consent (for example, where a change of control provision exists in a material contract of the company being sold).

Unless the parties agree otherwise, the sale and purchase agreement terminates if all specified conditions are not met by a certain date (the “longstop date”), unless the parties agree otherwise. Therefore, it is crucial that the SPA specifies how to determine when the conditions precedent have been met and when they can no longer be met. Additionally, it should specify which party is responsible for fulfilling each condition precedent. The obligated party must use reasonable efforts to satisfy the relevant conditions precedent by the longstop date.

7 Finalization

Legal ownership of the shares is transferred to the buyer, resulting in the buyer’s ownership of the target company. Typically, a completion schedule in the SPA will include a list of all documents to be signed and other actions required to close the deal.

8 Post Completion

The sale and purchase agreement continues to be an important reference document following the closing, as it outlines the terms of any earn-out and includes restrictive covenants, confidentiality obligations, warranties, and indemnities, all of which may remain highly relevant.

Depending on the size of the transaction, a single SPA may contain a substantial amount of content. Here are a few instances of what you may encounter in an SPA.

Asset Identification

A SPA describes the particular asset being sold. In the case of real property, the physical location is identified (i.e., by address and parcel number). This section is less robust for the sale of easily interchangeable duplicate goods.

Cost and Terms of Purchase

A SPA defined the transaction’s exchange rate. In addition, the agreement specifies what portion of the purchase price is due as a down payment and how that deposit will be made. This section of the contract specifies how the remaining balance (total purchase price minus deposit) will be paid.

Due Dilligence

For the sale of larger assets, the SPA typically contains a section requiring the purchaser to acknowledge their due diligence. Additional due diligence periods that correspond to additional deposits or upfront payments may be outlined in the PSA.

In addition to indemnification statements and the purchaser’s acknowledgment of the condition of the assets, this section likely contains both. In addition, the buyer typically affirms their right to terminate the contract under certain conditions. This section may also include clarification regarding which members of the purchaser’s team are authorized to speak on behalf of the company.

Covenants/Conditions Prior to Close

Generally, an SPA describes the next steps in a transaction. In order for the sale to be legally binding, these conditions must be met; failure to comply with these conditions constitutes a breach of contract. Under these conditions, the buyer may have the right to cancel the sale (if such rights are identified in the section prior).

Many of these covenants concern risk mitigation and asset protection. This section typically describes what a seller must do if unforeseen litigation threatens the transaction. In addition, it specifies what insurance requirements should cover the asset through the sale, what warranties will continue to exist, and confirms the asset’s exclusivity.

Damages/Remedies

In certain instances, it may be necessary to communicate what each party will do if the asset being sold is damaged prior to sale or during transit. This section frequently defines various degrees of damage, such as minor and major. The contract then specifies several remedies for each level of damage.

Other Chapters

If applicable, an SPA may contain additional sections. Title and survey information regarding a property is commonly included in real estate transactions. Existing tenants or the current state of the space may be referenced in particular restrictions and conditions.

A SPA typically specifies the applicable broker commissions. In addition to the dollar amount to be paid, an SPA specifies who is responsible for paying commissions and the process and timeline for issuing those payments.

For transactions requiring confidentiality, an SPA outlines the terms of the transaction. This includes the stipulations regarding public or press releases, the use of promotional materials referencing the sale, and the remedies in the event that one party breaches this provision of the contract.

If the sale is contingent on the completion of other transactions, the SPA will outline the consequences of a sale’s termination if the other deal falls through. Imagine a real estate developer attempting to purchase two adjacent properties with the intent of demolishing both to construct a single building. The developer may include language in one SPA that makes the transaction contingent on the execution of the second SPA.

Examples of Spas Available on the Market:

Real estate transactions are one of the most common occurrences of SPAs. As part of the negotiation process, both parties reach an agreement on the final sales price. In addition, other transaction-related details, such as a closing date or contingencies, are included.

Large, publicly traded companies use SPAs in their supply chains. A SPA may be utilized when acquiring a large quantity of materials from a supplier or when making a single large-scale purchase. A company may, for instance, enter into an SPA with a supplier to purchase a specified quantity of goods at a fixed price.

A SPA may also function as a contract for revolving purchases such as a monthly delivery of raw materials, inventory, or other tangible goods. Even if delivery is delayed or spread out over time, the purchase/selling price can be established in advance. SPAs are established to assist suppliers and buyers in forecasting demand and costs, and their importance increases as the size of the transaction grows.

In another instance, an SPA is frequently required during the acquisition of one business by another. Because the SPA specifies the exact nature of what is being bought and sold, the agreement may allow a business to sell its tangible assets to a buyer without selling the naming rights associated with the business.

Example of SPA:

Tahrem Investment Holding Limited (the purchaser) and 3DOM Inc (the seller) entered into an SPA for the purchase of the entire issued and paid-up share capital of 3DOM (Singapore) Spc. Ltd. (the target). Under the terms of the SPA, the buyer must acquire from the seller the entire issued and paid-up capital of the target.

Key Sales and Purchase Agreement (SPA) Terms:

The purchaser hired an independent, qualified appraiser to complete a report on the target’s value. The independent expert in valuation, the buyer, and the seller all agreed that the value of the target should be S$1,700,000,000.

Consideration:

The consideration was agreed upon on a willing-buyer and willing-seller basis, following substantive negotiations with the seller, and is based on a 20% discount to the actual valuation of the target as determined by an independent, qualified valuation expert.

The parties have agreed that the consideration will be paid in shares. The buyer shall issue and allot to the seller 1,813,333,333 new fully paid common shares (the shares) in its capital (the consideration shares) at a pre-consolidation issue price of S$0.75 per share.

Following the acquisition, the target organization will become a subsidiary of the acquirer.

The parties agreed that the buyer will be responsible for paying the transaction fees.

Conditions:

The proposed acquisition is contingent upon the satisfaction or waiver of customary conditions precedent for a transaction of this nature, including but not limited to:

• the consideration derived from the actual valuation being at least S$1.36 billion;
• the completion of financial, legal, operational, and any other due diligence on the target by the buyer, and the results of such due diligence being reasonably satisfactory to the buyer;
• the findings and methodology presented in the valuation report to be issued by the independent qualified valuer being satisfactory to the buyer;
• the entry into service agreements by the key management of the target, on mutually agreeable terms;
• the seller procuring the target shall obtain such approval(s) as may be required from the respective target’s board of directors and its shareholder(s) in connection with the SPA;
• the buyer obtaining such approval(s) as may be required from its directors and shareholders the proposed share issuance;
• the allotment and issuance of consideration shares at completion;

In Bangladesh, the merger and acquisition of companies is regulated by the Bangladesh Securities and Exchange Commission (BSEC) under the Securities and Exchange Ordinance, 1969 and the Securities and Exchange Commission Act, 1993. Additionally, the Bangladesh Competition Act, 2012 regulates the merger and acquisition activity to prevent the creation of monopolies or anti-competitive practices.

In accordance with these laws, any merger or acquisition of a public limited company in Bangladesh must be approved by the BSEC and the shareholders of the companies involved. The BSEC will review the proposed merger or acquisition to ensure that it is fair and in the best interests of the shareholders. Any proposed merger or acquisition that may result in a substantial lessening of competition must be notified to the Bangladesh Competition Commission for review.

Given this context, the following changes will be made to the SPA:

• The parties involved in the merger or acquisition agree to comply with all relevant laws and regulations in Bangladesh, including but not limited to the Securities and Exchange Ordinance, 1969, the Securities and Exchange Commission Act, 1993 and the Bangladesh Competition Act, 2012.
• The parties also agree to obtain all necessary approvals and clearance from the BSEC and the Bangladesh Competition Commission before closing the transaction.
• The proposed acquisition is conditional upon the fulfillment or waiver of customary conditions precedent for a transaction of this nature, including but not limited to the following:
  • Obtaining the approval(s) required from the BSEC and the Bangladesh Competition Commission
  • The seller procuring the target shall obtain such approval(s) required from the respective target‘s board of directors and its shareholder(s) in connection with the SPA;
  • The buyer obtaining such approval(s) as may be required from its directors and shareholders and the proposed share issuance;
• The parties agree to include any additional terms or conditions as may be required by the laws and regulations of Bangladesh

It is important to note that the above is not a comprehensive list and that it’s highly recommended to seek legal and financial advice before finalizing any SPA, as laws and regulations are subject to change.

Here are the steps involved in a merger or acquisition (M&A) of a company in Bangladesh:

Are you planning to register a private limited company in Bangladesh?

Company formation and registration at Tahmidur Rahman Remura: The Law Firm in Bangladesh:

The legal team of Tahmidur Rahman, The Law Firm in BangladeshRemura: The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165

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Start up law in Bangladesh and Funding stages

by Barrister Tahmidur Rahman | Jan 9, 2023 | 2023, Law

Start up law in Bangladesh and what exactly is a start up?

A startup is a company in its early stages of development. It is founded by one or more entrepreneurs in order to meet a specific need for a product or service. Startups are high-cost, low-revenue businesses that must rely on outside investors for capital until they can turn a profit.

Types of business entities for startups in Bangladesh

What is the process of startup funding?

Startup funds are given to individuals or groups of individuals in order to raise funds for their new business, allowing it to grow. When investors contribute to the funding of a startup, they do so in the hope of receiving a larger sum of money from the business in the long run. Depending on how much a person has invested in a company, they may be able to make business decisions that affect how the company operates in regards to Start up law in Bangladesh.

Let’s take a closer look at the various stages of fundraising in the startup lifecycle in Bangladesh and the Start up law in Bangladesh.

1. Pre Seed Funding:

This prime stage of seed funding occurs so early in the process that it is not even considered startup funding. The pre-seed funding stage generally refers to the time when a startup is getting its operations up and running.

Pre seed funding is an early stage of startup financing that occurs before a company has developed a fully functioning product or service. It is typically used to fund the development of a prototype, conduct market research, and build a team. In Bangladesh, pre seed funding is an increasingly important source of support for entrepreneurs looking to turn their ideas into reality.

There are several ways to secure pre seed funding in Bangladesh, including through grants, angel investors, and accelerator programs. Grants, such as those provided by the Ministry of Finance’s Startup Dhaka program, can be a valuable source of funding for startups in the pre seed stage.

Angel investors, who are typically successful entrepreneurs or business professionals, can also provide financial support and mentorship to startups in the early stages of development. Accelerator programs, such as Grameenphone Accelerator and BD Venture, provide startups with funding, workspace, and mentorship in exchange for equity in the company.

Pre seed funding is an important step for startups in Bangladesh, as it allows them to develop a solid foundation and build momentum for future growth. It is essential for entrepreneurs to carefully consider their funding options and choose the right path for their business. With the right support, startups in Bangladesh can take their ideas from concept to reality and pave the way for future success.

During the pre-series stage, investors are unlikely to make an investment in exchange for equity in the startup. This stage can last a long time or you can receive pre-series funding quickly. It is determined by the nature of your startup as well as the initial costs that must be considered while developing the business model.

Bootstrapping refers to the stage of pre-seed funding. Simply put, it means leveraging your existing resources to scale your startup. Startup founders invest from their own pockets in order to grow their businesses as efficiently as possible.

During the startup’s development stage, entrepreneurs may be required to work overtime or take on a second job in order to invest their extra income into their new venture.

To add to what Jonathan said, the pre-seed funding stage enables a fledgling startup to effectively build and distribute their product(s) or service(s). Entrepreneurs typically assess the viability of their idea during the research or development phase. They may have a working prototype of their product and are looking for appropriate funding to scale their startup full-time.

Many entrepreneurs seek advice from founders who have been there and gone through a similar experience as them during this stage. It enables them to calculate the costs of their idea or project, create a winning business model, and gather ideas on how to turn their plan into a running business.

During the pre-series stage, entrepreneurs should also work out any necessary partnership agreements, copyrights, or other legal issues, as similar issues are best resolved during this stage. Later on, they may become prohibitively expensive, if not impossible to overcome. Furthermore, no investor will provide funds to a startup that has legal issues prior to its launch.

Pre-Seed Stage Potential Investors:

The following are the most common pre-series investors:

The most common pre-series investors are:

• Startup Owners
• Friends and Family
• Early Stage Venture Funds (Micro VCs)

Bootstrapping a company can be extremely difficult, particularly during the pre-seed funding stage. Entrepreneurs may have to deplete their savings and even take on additional jobs to fund their businesses.

It takes a tremendous amount of dedication and effort because success is not guaranteed and there are numerous risk factors to consider when investing your own money in a startup.

However, if done correctly, bootstrapping can provide advantages that traditional investments do not, such as allowing entrepreneurs to retain control over their businesses while potentially achieving higher long-term returns on investment.

Startup Valuation in Pre-Seed Stage

During the pre-seed funding stage, startups value anywhere between $10,000 to $100,000.

Active Pre-Seed Stage Funds

• Seedcamp
• K9 Ventures
• First Round

Stage 2: Seed Funding

It’s time to plant the seed after the pre-seeding stage. “Seed funding” is the first stage of startup funding. Almost 29 percent of startups fail due to a lack of capital while bootstrapping, making seed capital critical to getting a business off the ground.

Starting a business in Bangladesh can be a complex and daunting process, but with the right legal support, entrepreneurs can navigate the legal landscape and set their startups up for success.

One of the first steps for any startup in Bangladesh is to choose the appropriate legal structure. The most common legal structures for startups in Bangladesh are sole proprietorship, partnership, and private limited company. Each structure has its own advantages and disadvantages, and it is important for entrepreneurs to carefully consider their options and choose the one that best meets the needs of their business.

Once a legal structure has been chosen, startups in Bangladesh will need to register their business with the relevant authorities. The process for registering a business in Bangladesh varies depending on the legal structure chosen, but it generally involves submitting an application and paying a fee.

Startups in Bangladesh will also need to comply with a range of other legal requirements, including obtaining necessary licenses and permits, registering for taxes, and complying with labor laws. Failure to comply with these requirements can result in fines, penalties, and other legal consequences.

To ensure that their startups are in compliance with all relevant laws, entrepreneurs in Bangladesh should consider seeking the advice of a legal professional. An experienced lawyer can help entrepreneurs understand their legal obligations and ensure that their businesses are properly set up for success.

Consider the seed funding stage to be analogous to planting a tree. The initial funding is ideally the “seed” that allows any startup to thrive. When you provide appropriate water i.e. a successful business strategy, alongside the dedication of the entrepreneur, the startup will eventually grow into a “tree”.

Because investors are taking a significant risk by investing in the business, startups must provide equity in exchange for seed funding. The stakes are even higher because startups cannot guarantee a successful business model at this stage.

Seed funding enables a startup to fund product launch costs, gain early traction through marketing, initiate critical hiring, and conduct additional market research to develop product-market fit.

Many startups believe that the seed funding round is all that is required to get their startup off the ground.

Potential Seed Stage Investors:

The following are the most common types of investors who participate in seed funding:

• Angel Investors
• from friends and family
• Crowdfunding Startup Valuation & Fundraising in the Seed Stage
• Early Stage Venture Funds (Micro VCs)

Startups that qualify for seed funding have a business worth between $3 million and $6 million. A promising startup will be able to obtain funding ranging from $50,000 to $3 million during the seed funding stage.

Active Seed Stage Funds

• 500 Startups
• Y Combinator
• AngelPad
• Techstars
• Speedinvest

3. Series A funding stage

The first round of venture capital financing is referred to as a stage. By this point, the startup should have a working product and a customer base with consistent revenue flow. It is now time for them to pursue series A funding and optimize their value propositions. This is an excellent opportunity for startups to expand across multiple markets.

It is critical to have a long-term profit plan in place during the Series A funding round. Many startups have great ideas that can generate a large number of enthusiastic users, but they don’t know how to monetize them in the long run.

The series A funding stage is an important milestone for startups in Bangladesh, as it marks the transition from the early stages of development to a more established and mature business. At this stage, startups typically have a functional product or service and are looking to scale their operations and enter new markets.

To secure series A funding in Bangladesh, startups will need to present a strong business case to investors, including a detailed plan for how they will use the funds to achieve their goals. Startups will also need to demonstrate a track record of success and have a clear path to profitability.

This is the stage at which you should begin learning about fundraising and making early connections with angel investors and venture capitalists. You must identify investors who want to invest in your startup using the 30-10-2 rule.

This rule states that you must find 30 investors willing to invest in your business. Ten of those thirty investors may be interested in your proposal, with two of them actually passing on funds to you.

Angel investors and traditional venture capital firms provide the majority of Series A funding. They are not looking for startups with “great ideas,” but rather for startups with a solid business strategy that can turn their great idea into a successful, money-making organization, allowing the investors to profit from their investment.

A single investor can act as a “anchor,” but once a startup has secured its first investor, attracting additional investors becomes easier. Although angel investors prefer to invest during this stage, they have far less influence than VC firms.

Investors interested in Series A

• Accelerators
• Super Angel Investors Venture Capitalists Company Valuation & Series A Fundraising
• During the Series A funding stage, startups with a good business plan and a valuation of up to $10 million to $30 million can raise approximately $15 million.

Active Series A Investors

• IDG Capital
• New Enterprise Associates
• Plug and Play
• SOSV

4. Series B Funding Stage

Startups that have already gone through the previous startup funding stages (seed funding and Series A) have a sizable user base and a steady stream of revenue. They have demonstrated to their investors that they are capable of achieving success on a larger scale.

Investors help startups by funding market reach activities, increasing market share, and forming operational teams such as marketing, business development, and customer success. The series B funding stage allows startups to grow so that they can meet the various demands of their customers while also competing in competitive markets.

In terms of processes and key players, the Series B funding stage may appear to be similar to the previous funding stage; however, Series B funding is frequently led by the same characters, including a key anchor investor who helps you attract other investors.

The main difference is the addition of a new wave of VCs who specialize in investing in well-established startups in order for them to exceed expectations even further.

“The dilemma is that while your Series A investors were extremely important to you during that round, they may not be the investors you need going forward. If you’re in a position where going public is a real possibility, you’ll need crossover investors who will be there for you both now and when you go public,” says Praveen Tipirneni, MD & CEO of Morphic Therapeutic Inc.

Potential Series B Investors

• Venture Capitalists
• Late stage VCs

Company Valuation & Fundraising in Series B Startups with a revenue-generating model and a valuation of up to $30 million to $60 million can raise up to $30 million during the Series B funding stage.

Active Series B Investors

• Khosla Ventures
• GV
• StartX (Stanford-StartX Fund)

5. Series C Funding Stage

Startups that reach the series C funding stage should be well on their way to success. These startups seek additional funding to help them develop new products, enter new markets, and even acquire other underperforming startups in the same industry.

Investors happily fund successful startups in the series C funding stage. They are hoping to make a profit that exceeds their investment. The Series C funding stage focuses on rapidly scaling the startup.

With Series C funding, you can significantly scale your startup by acquiring other startups. Your startup operations are now less risky, and more investors are joining the fray. During the Series C stage, many hedge funds, investment banks, and private equity firms will gladly invest in your startup.

The reason for this is that the startup has already proven to be a commercial success. New investors enter the game by investing large sums of money in thriving startups in order to establish themselves as leading investors.

Remember that startups that receive Series C funding are well-established, have a strong customer base, have stable revenue streams as well as proven growth histories, and want to expand their operations on a global scale. If you haven’t completed any of the above, you aren’t ready for Series C funding.

Potential Investors for Series C

• Late stage VCs
• Private Equity Firms
• Hedge Funds
• Banks

Company Valuation & Fundraising in Series C

Startups with a good business growth valuing up to $100 million to $120 million are able to raise approximately $50 million during the Series C funding stage.

6. Series D Funding Stage and Beyond

This stage is not required by many startups. The Series D funding stage enables entrepreneurs to raise funds for a one-time event. For example, a merger, or if it has not yet met its growth target.

If a startup has not yet gone public but is considering a merger with a competitor on agreeable terms, it may consider series D funding. Series D funding provides startups with the most viable solutions, allowing them to confront problems head on by merging with another startup.

Furthermore, if a startup is unable to achieve its growth milestone with series C funds, it will require additional funds through series D funding to stay afloat.

Potential Investors for Series D

• Late stage VCs
• Private Equity Firms
• Hedge Funds
• Banks

Company Valuation & Fundraising in Series D

Startups in this stage may value around $150 million to $300 million are able to raise approximately $100 million during this startup funding stage.

Active Series C & D Investors

• Accel
• Sequoia Capital
• Founders Fund
• Lightspeed Venture Partners

7. Initial Public Offering (IPO) in Bangladesh

The process of initial public offering (IPO) in Bangladesh involves offering corporate shares to the general public for the first time. Startups that need funding and established organizations looking to allow startup owners to exit some or all of their ownership may use this process to generate funds by selling shares to the general public.

To go through the IPO process in Bangladesh, a startup will need to form an external public offering team that includes underwriters, lawyers, certified public accountants, and experts from the Bangladesh Securities and Exchange Commission (BSEC).

The startup will also need to compile information about its financial performance and expected future operations, and have its financial statements audited to generate an opinion about its public offering. The startup will then file its prospectus with the BSEC and determine a specific date for going public.

There are several benefits to IPO for startups in Bangladesh, including the ability to raise funds, access to additional funds through secondary offerings, the ability to compensate executives through stock, and the ability to recruit better talent. Public organizations may also find it easier to pursue mergers, as they can use their public shares to acquire other startups.

When a startup decides to go public, a specific set of events occur during the IPO process. They include:

• Formation of an external public offering team comprising of underwriters, lawyers, certified public accountants, and SEC experts.
• Compilation of the startup’s Information including its financial performance as well as its expected future operations.
• Audit of the startup’s financial statements takes place which generates an opinion about its public offering.
• The startup files its prospectus with the SEC and determines a specific date for going public.

Benefits of IPO

Raising funds for the startup is not the only benefit that entrepreneurs enjoy in case of a public offering. Some other advantages are:

• A public organization is able to generate additional funds through secondary offerings as it already has access to public markets.
• Many public organizations compensate executives through stock. The stocks of a public organization are more attractive to employees as the stocks can be sold easily. Also, being public allows an organization to recruit better talent as well.
• Mergers are easier for a public organization as it can utilize its public shares to acquire another startup.

Meet The Most Active Startup Investors Of 2022 in Bangladesh:

LetsVenture

LetsVenture, founded in 2013 by Shanti Mohan and Sanjay Jha, is a startup investment marketplace that allows investors to discover and invest in startups through its proprietary technology platform.

LetsVenture completed 360 transactions in 2022. Among its notable investments this year was its participation in the Series A funding round of Burger Singh, a homegrown quick service restaurant chain. It also invested in Sanfe, a feminine hygiene startup, and Evenflow, an ecommerce rollup startup.

LetsVenture will also collaborate with the Ministry of Electronics and Information Technology in 2022 to invest in early-stage startups through the government’s SAMRIDH startup accelerator program.

AngelList India

AngelList, founded in 2009 by Naval Ravikant, allows investors to invest as little as $1,000 alongside accredited backers via investment syndicates. In 2019, it launched an India-focused venture and angel fund.

In 2022, AngelList India participated in 285 funding transactions. During the year, it invested in B2B manufacturing and supply chain enablement startup Magma, content sharing startup SuperShare, and coliving marketplace Crib, among others.

Venture Catalysts

Dr. Apporva Ranjan Sharma and Anuj Golecha founded the Mumbai-based integrated incubator, which typically invests $200K to $2 Mn in early-stage startups. The investments are syndicated, with HNIs, family offices, and CXOs participating.

In 2022, Venture Catalysts partnered with the Confederation of Real Estate Developers’ Associations of India (CREDAI) to establish a $100 million proptech fund to invest in early-stage and growth-stage startups in a variety of real estate sub-sectors.

In 2022, Venture Catalysts invested in 207 deals, including investment tech startup AlgoBulls, spacetech startup Agnikul, and intercity mobility startup Zingbus, among others.

Sequoia Capital

The US-based venture capital (VC) firm launched a $2 billion early stage venture and growth fund for India in 2022. The fund’s closure was announced in June 2022.

In 2022, Sequoia Capital completed 86 investment deals in India and backed startups such as SaaS unicorn Chargebee, B2B SaaS platform CleverTap, and Scaler Academy.

2022 was a difficult year for the VC firm’s India arm as its portfolio startups like BharatPe, Zilingo, and Trell were embroiled in controversies, raising questions about the corporate governance at its companies. Following this, Sequoia India released a blog post outlining how it looks at the corporate governance issues and “a set of proactive steps” to counter misconduct.

Better Capital

Founded in 2018 and run by Silicon Valley entrepreneur Vaibhav Domkundwar, Better Capital is backed by founders, operators and investors from across the world. Former and current leaders at Meta, Google, Uber, LinkedIn, Tiger Global, TPG, and the World Bank are among its backers.

In 2022, Better Capital participated in 75 funding deals in the Indian startup ecosystem, including those of fintech startups Gullak and M2P Fintech and creator-owned marketplace startup HYPD.

We Founder Circle

Founded in 2020 by Gaurav Sanghavi, Neeraj Tyagi, Bhawna Bhatnagar, Deo Saurabh and Vikas Aggarwal, We Founder Circle has backed over 70 homegrown startups till now. It has a wide network of 6,500 investors across 40 countries.

In December 2022, the investment firm launched two angel funds – $24 Mn angel fund ‘Invstt Trust’ and $30 Mn cross-border angel fund ‘We Founder Circle Global Angels Fund’.

In 2022, it participated in 71 funding deals of startups. It led seed funding round of smart parking solutions platform ParkMate and pre-seed funding round of Uma Robotics. Besides, it also invested in foodtech startup Anveshan.

Stride Ventures

Founded in 2019 by Ishpreet Gandhi, the Delhi-based venture debt firm invests in startups working in diverse sectors such as fintech, agritech, B2B commerce, healthtech, B2B SaaS, mobility and energy solutions.

In August 2022, Stride Ventures closed its second fund, Stride Ventures India Fund II, with a corpus of $200 Mn to write cheques between $4 Mn–$5 Mn to 60-70 startups over a period of four years.

It participated in 55 funding rounds in 2022, including that of agritech startup WayCool, EV-ride hailing platform BluSmart, and EV battery swapping network Battery Smart. 

Here are some usual documents that you need from us for your startup in Bangladesh:

Here is a table with frequently asked questions about startup law in Bangladesh:

Start-up department in Tahmidur Rahman Remura law firm in Bangladesh:

The Barristers, Advocates, and lawyers at TLS in Gulshan, Dhaka, Bangladesh are highly experienced at dealing with Start up funding, seed stages local and foregin direct investment, where we assist clients in setting up of the complete business irrespective of whether it is within a specialized zone or any other part of Bangladesh. 

In TR Barristers in Bangladesh, our experience helps us to efficiently execute local and cross-border global transactions while helping you at all stages of the process and offering you cost-effective, realistic business solutions.

In addition to handling various issues related to domestic clients on a regular basis, it also has experience in consulting and assisting numerous international clients with utmost care and attention throughout their legal exploration in Bangladesh. For queries or legal assistance in regards to the Procedure of foreign investment in Bangladesh, please reach us at:

 E-mail:[email protected]
Phone:+8801847220062 or +8801779127165

House 410, Road 29, Mohakhali DOHS

How to get justice against physical torture in Bangladesh

by Barrister Tahmidur Rahman | Jan 9, 2023 | 2023, Law

Physical torture in Bangladesh ( Assault and threats)

In Bangladesh, assault and threats charges are governed by the Penal Code, which defines various offenses related to violence and threats of violence.

Under the Penal Code, assault is defined as the act of causing or attempting to cause physical harm to another person. It is punishable by imprisonment for up to one year, or by a fine, or by both. If the assault results in serious injury, the punishment may be increased to imprisonment for up to seven years.

Threats, also known as criminal intimidation, are defined as the act of threatening another person with harm or injury. Threats can be verbal or written, and they can be made directly to the victim or through a third party. Threats are punishable by imprisonment for up to two years, or by a fine, or by both. If the threats are made in writing, the punishment may be increased to imprisonment for up to seven years.

In addition to the Penal Code, the Domestic Violence (Prevention and Protection) Act, 2010 provides protection to victims of domestic violence and provides for the punishment of perpetrators of domestic violence. The act defines domestic violence as any act or conduct that causes physical, psychological, or economic harm or suffering to a person. It provides for the issuance of protection orders to prevent further abuse and for the punishment of those who violate such orders.

If you have been charged with assault or threats in Bangladesh, it is important to seek legal assistance as soon as possible. An experienced criminal defense lawyer can help you understand your rights and options, and can work with you to develop a defense strategy. Some possible defenses to assault and threats charges include self-defense, defense of others, and lack of intent.

It is also important to remember that being charged with a crime does not necessarily mean you will be convicted. With the help of a skilled lawyer, you may be able to get the charges against you reduced or dismissed, or you may be able to negotiate a plea deal that results in less severe penalties.

If you have been charged with assault or threats in Bangladesh, it is important to take the charges seriously and to seek legal assistance as soon as possible. An experienced criminal defense lawyer can help you navigate the legal system and fight for your rights.

Options if you are getting tortured by someone in Bangladesh:

If you have been physically abused in Bangladesh, there are several legal options available to you. These options include:

1. Filing a police report: If you have been physically abused, it is important to report the abuse to the police as soon as possible. This will not only help to protect you from further abuse, but it will also help to build a case against the person who abused you. When you file a police report, be sure to provide as much detail as possible about the abuse, including the date, time, location, and any injuries you sustained.
2. Filing a complaint with a human rights organization: There are several human rights organizations in Bangladesh that can assist you in seeking justice for physical abuse. These organizations can provide you with legal assistance, help you file a police report, and advocate on your behalf.
3. Filing a civil lawsuit: If you want to seek compensation for the physical abuse you have suffered, you can file a civil lawsuit against the person who abused you. In a civil lawsuit, you can seek damages for medical expenses, lost wages, and other costs related to the abuse.
4. Filing a criminal complaint: In some cases, the person who physically abused you may be charged with a crime. If this is the case, you can file a criminal complaint against the person and cooperate with the police and prosecutors as they build their case.
5. Seeking a restraining order: If you are in immediate danger of being physically abused again, you can seek a restraining order to prevent the person who abused you from having any further contact with you.

It is important to note that seeking justice for physical abuse can be a difficult and complex process. However, by taking action and pursuing legal recourse, you can increase your chances of getting the justice you deserve. If you have been physically abused, it is important to seek help and to not be afraid to speak out about the abuse.

Here is a table outlining relevant laws and sections in Bangladesh related to physical abuse and bail options:

How to get justice against the abuse:

Getting justice for physical torture in Bangladesh can be a difficult and complex process. However, there are steps you can take to help ensure that you get the justice you deserve.

1. Document the abuse: It is important to document the physical abuse you have suffered. This may include taking photos of any injuries you have sustained, keeping a diary of the abuse, and keeping any medical records or other documentation related to the abuse.
2. Seek medical attention: If you have been physically abused, it is important to seek medical attention as soon as possible. This will not only help you receive the necessary treatment for your injuries, but it will also provide you with important documentation of the abuse.
3. Report the abuse to the authorities: If you have been physically abused, it is important to report the abuse to the authorities. You can do this by contacting the police or by filing a complaint with a local human rights organization.
4. Gather evidence: In order to get justice for the physical abuse you have suffered, it is important to gather as much evidence as possible. This may include witness statements, medical records, and other documentation related to the abuse.
5. Seek legal assistance: If you want to pursue legal action against the person who physically abused you, it is important to seek legal assistance. This can be done by contacting a local human rights organization or by hiring a lawyer.
6. Consider seeking compensation: In some cases, it may be possible to seek compensation for the physical abuse you have suffered. This may include damages for medical expenses, lost wages, and other costs related to the abuse.
7. Don’t give up: Pursuing justice for physical abuse can be a long and difficult process. It is important to stay strong and to not give up, even if it seems like the odds are against you.

It is important to note that physical abuse is a serious issue that should not be tolerated. If you or someone you know has been the victim of physical abuse, it is important to take steps to get the justice you deserve. By following the steps outlined above, you can increase your chances of getting the justice you deserve.

In section 2(6), the law borrows the definition of ‘torture’ from the 1984 Convention, stating that ‘torture’ means any act that causes physical or mental pain and suffering to a person. Torture includes, among other things, inflicting physical and mental pain on a person in order to obtain information or a confession, punishing a person for an act he committed or is suspected of committing, or intimidating or coercing him or a third person.

Furthermore, infliction of pain or suffering is torture when done for any reason based on discrimination of any kind, or by or with the consent of a public official or other person acting in an official capacity. Section 12 states that war, the threat of war, internal political instability, an emergency situation, or any order from a superior officer/authority can never be used as justification for torturing someone.

Download the Act

Section 2(7) defines custodial death as the death of a person in the custody of a public official. Furthermore, it includes the death of a person while being illegally detained or arrested by any member of a law enforcement agency. It also refers to the death of a person during interrogation or remand, regardless of whether he is a witness or not in a case.

Under section 2(8) of this Act, a victim or aggrieved person is defined as someone who has been directly tortured or whose acquaintance has been tortured.

Section 4 of the Act empowers the Court to immediately write a record of torture when anyone appears before it with a complaint of torture. The Court will order that the tortured person be examined by a registered doctor. In the case of a female victim, she should be examined by a female doctor.

The doctor must prepare a report within 24 hours describing the victim’s injuries and pain, as well as the possible time when the victim was tortured. The reports must be submitted to the Court and distributed to the complainant or anyone he designates.

Section 5 states that the Court will send a copy of the torture record to the Police Super or any Police Officer of higher rank, as well as an order to file a criminal case. If the doctor recommends that the victim be admitted to a hospital, the Court will make the necessary arrangements.

Upon receipt of this order, the Police will investigate the complaint and submit a report, either with or without charges. However, if the Court is satisfied on the application of the aggrieved person that the Police cannot properly complete the investigation, the Court can issue an order for a judicial inquiry.

Section 6 allows a third party to file a complaint of torture, and the Court is required to issue an order for the complainant’s safety and protection. Even the Court has the authority to go to the location of the alleged torture.

Section 8 of this law requires that investigations be completed within 90 days of the complaint being filed. In exceptional cases, the investigation may be delayed for up to 30 days after hearing the victim or aggrieved party. Torture offenses are cognizable, non-compoundable, and non-bailable under this law.

Under Section 11, the complainant may petition the Session Judge Court for safety and protection. The state and the alleged accused can be made parties in such a petition, which must be resolved within 14 days after serving a seven-day notice on the opposing party.

While deciding the case, the Court may detain the opposing party for a maximum of seven days, with the option to extend the period at any time. To ensure the complainant’s safety, the Court may move to a specific location and prohibit the opposing party from entering.

The accused bears the burden of proving their innocence. The Session Judge Court must complete the trial under this Act within 180 days, but the time can be extended by up to 30 days. An offender can be sentenced to up to 5 years in prison or a fine of up to BDT 50,000, or both.

Section 15 stipulates that the victim or aggrieved party be compensated with BDT 25,000. If the victim dies as a result of torture, the offender will face life imprisonment or a fine of up to BDT 1 lakh, or both. In this case, the victim’s family or those who have been wronged will be compensated with BDT 2 lakh. The decision of the Session Judge Court can be appealed to the High Court Division.

Here is a table of frequently asked questions about Bangladeshi law on various criminal offenses:

Why Tahmidur Remura is one of the most coveted criminal prosecution and defence lawyers:

Tahmidur Rahman Remura is a highly respected criminal defense law chamber in Bangladesh. We are dedicated to providing our clients with the best possible legal representation and ensuring that they are able to make informed decisions about their cases. Our team of experienced attorneys is equipped to handle a wide range of criminal cases, including murder, sex offenses, corruption, and drug crimes, among others. We have appeared in all levels of court, up to the Supreme Court of Bangladesh, and have a track record of success in high profile cases.

At our initial meeting, we will listen to your story and explain the legal process to you in detail. We will also help you understand your options and make a decision about whether to plead guilty or go to trial. If you choose to have a trial, we will review all relevant documentation, including police and court records, to help you build a strong defense.

When you are facing charges:

If you are facing criminal charges, it is important to seek legal representation as soon as possible. Prior to your first appointment with us, please gather all relevant information, including the exact charge you are facing, your next court date and location, and any documentation related to the charge. We are here to help you navigate the legal system and fight for your rights.

We can help you in the prosecution and defence of the following matters:

• Murder / manslaughter (including manslaughter)
• Sex offences
• Corruption
• Death by dangerous driving
• Kidnapping
• Violent disorder
• Armed robbery
• Arson / criminal damage
• Blackmail
• Possession / supply of drugs
• Inquests

f you require any assistance or consultation, please visit our office or contact us at +8801779127165 or +8801847220062 (WhatsApp) or by email- [email protected] 

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165 or +8801708080817

Address: House 410, Road 29, Mohakhali DOHS, Dhaka 1206

How to oppose a suit lodged by a bank in Bangladesh

by Barrister Tahmidur Rahman | Jan 8, 2023 | 2023, Law

How to oppose a suit lodged by a bank in Bangladesh

If you have been served with a lawsuit from a bank in Bangladesh, you will need to respond to the lawsuit in order to present your side of the case. One way to respond is to file an “answer” to the lawsuit.

 This is a document in which you can raise any defenses or arguments that you have to the bank’s claims. You will need to follow the procedures set forth by the court in order to properly file your answer.

You should also consider seeking the advice of a lawyer to help you understand your legal rights and options. A lawyer can help you prepare a strong defense to the bank’s claims and represent you in court.

In Bangladesh, a default judgment is a judgment entered by the court in favor of the plaintiff (in this case, the bank) if the defendant (you) fails to properly respond to the lawsuit or appear in court for a hearing. 

This can happen if you do not file an answer to the lawsuit within the time required by the court, or if you fail to attend a scheduled court hearing.

If a default judgment is entered against you, it means that the court has granted the bank’s requested relief without considering your defenses or arguments. This can have serious consequences, such as the bank being able to garnish your wages or seize your assets to satisfy the judgment.

To avoid a default judgment, it is important to respond to the lawsuit promptly and to follow the procedures set forth by the court. 

It is important to act promptly in responding to a lawsuit, as failing to do so can result in a default judgment being entered against you. This means that the court may grant the bank’s requested relief without considering your defenses or arguments.

Here are the steps you can take to oppose a lawsuit filed by a bank in Bangladesh:

1. Review the lawsuit and make sure you understand the bank’s claims and the relief it is seeking.
2. Consider seeking the advice of a lawyer. A top lawyer can help you understand your legal rights and options, and can represent you in court.
3. File an “answer” to the lawsuit. This is a document in which you can raise any defenses or arguments that you have to the bank’s claims. You will need to follow the procedures set forth by the court in order to properly file your answer.
4. Prepare your defense. You will need to present evidence and arguments to support your defenses to the bank’s claims. This may include gathering documents, witness statements, and other types of evidence.
5. Attend any court hearings or proceedings. You will need to attend any court hearings or proceedings related to the lawsuit. This is your opportunity to present your defense to the court and to challenge the bank’s evidence and arguments.
6. Consider negotiating a settlement. If you are unable to successfully defend against the bank’s claims, you may want to consider negotiating a settlement. This can involve agreeing to pay the bank a certain amount of money in order to resolve the case.

It is important to act promptly in responding to a lawsuit and to follow the procedures set forth by the court. Failing to do so can result in a default judgment being entered against you.

Steps of a Money Loan (Artha Rin) Court Suit in Bangladesh:

For detailed understanding, here is a explanation of the steps involved in a money loan (artha rin) court suit in Bangladesh:

1. The lender files a lawsuit against the borrower. The lender will file a complaint with the appropriate court, alleging that the borrower has defaulted on the loan and seeking to recover the unpaid balance. The complaint will typically include details about the loan agreement, the amount of money owed, and the lender’s efforts to collect the debt.
2. The borrower is served with the lawsuit. The borrower will be served with a copy of the lawsuit and a summons, which will inform them of the lawsuit and the date of the first court hearing. The summons will typically contain information about the time and place of the hearing, as well as the borrower’s obligations and rights in the lawsuit.
3. The borrower responds to the lawsuit. The borrower has the option to file an “answer” to the lawsuit, in which they can raise any defenses or arguments they have to the lender’s claims. The answer is typically due within a certain number of days after the borrower is served with the lawsuit. If the borrower fails to file an answer, they may be at risk of a default judgment being entered against them.
4. The court schedules a hearing. The court will schedule a hearing to allow both parties to present their evidence and arguments. The hearing may be held before a judge or a jury, depending on the specific circumstances of the case and the rules of the particular court.
5. The parties present their cases. Both parties will have the opportunity to present their evidence and arguments to the court. This may include witness testimony and documentary evidence, such as loan documents and records of payments made or not made. The parties may also be able to cross-examine the other party’s witnesses.
6. The court renders a decision. After considering the evidence and arguments presented by both parties, the court will render a decision. If the borrower is found to be in default, the court may enter a judgment in favor of the lender, ordering the borrower to pay the unpaid balance of the loan. If the borrower is found not to be in default, the court may dismiss the case.
7. The borrower can appeal the decision. If the borrower is unhappy with the court’s decision, they may have the option to appeal the decision to a higher court. The appeal process will typically involve the submission of additional legal briefs and possibly a new hearing before the higher court.

It is important to note that these are general steps and that the specific procedures may vary depending on the specific circumstances of the case and the rules of the particular court. It is also important to seek the advice of a lawyer to help you understand your legal rights and options.

Steps of an Artha Rin execution suit in Bangladesh:

Hire the best law firm in Bangladesh in Artha Rin Matters in Bangladesh:

The Artha Rin Adalat Ain, 2003 (Money Loan Court Act, 2003) is the primary legal instrument dealing with bank and non-bank financial institutions (NBFI) loan defaulters, outlining mechanisms for banks and financial institutions (FIs) to be reimbursed. The Act establishes a separate court to deal with money loan cases, which can only be filed by a bank or an NBFI.

In litigation, we have a strong, young, and energetic team. Furthermore, our Research Team is always available to assist them in preparing a strong claim with updated laws and case references. Our team can also provide an opinion on various issues and help with litigation. Our professionals always carefully nurture the suit and always try to ensure the rights of the sufferer, with some notable successes as follows.

Tahmidur Remura – A Full-Service Law Firm has a proven track record of assisting clients with Artha Rin Adalot Matters. We have an experienced team of lawyers who can assist you by representing you in ArthaRin Suits before the Joint District Judge Court and the High Court Division of the Supreme Court of Bangladesh.

If you require any assistance or consultation, please visit our office or contact us at +8801779127165 or +8801847220062 (WhatsApp) or by email- [email protected] 

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165 or +8801708080817

Address: House 410, Road 29, Mohakhali DOHS, Dhaka 1206

Alternative Dispute Resolution in Bangladesh

by Barrister Tahmidur Rahman | Jan 4, 2023 | 2023, Law

Alternative Dispute Resolution in Bangladesh and what exactly is ADR?

The term “alternative dispute resolution” or “ADR” is frequently used to refer to a wide range of dispute resolution mechanisms that are abridged versions of or substitutes for full-scale court processes or judicial process. In other words, alternative dispute resolution refers to the practice of resolving disputes between parties through means other than formal litigation. ADR is a process that can be independent (non-judicial) or court-annexed (judicial), binding or non-binding, formal or informal, obligatory or voluntary.

It should be emphasized that the term “ADR” is misleading in the sense that it is not always an alternative to formal litigation and is frequently a part of formal litigation, particularly for court-connected ADR processes. According to Professor Thomas J. Stipanowich, ADR is an obsolete acronym that exists solely for convenience. “Not only is ‘alternative’ unhelpful- alternative to what?- but “appropriate” better conveys the concept of “method best suited to resolving the dispute,” as noted by the California Task Force. Professor Jean R. Sternlight prefers “Appropriate Dispute Resolution” to “Alternative Dispute Resolution.”

ADR typically includes the following mechanisms: negotiation, conciliation, mediation, and arbitration.
However, the variety of ADR models found in various nations can be described as follows:

(a) Court-annexed or stand-alone ADR
(b) Binding or Non-binding ADR
(c) Formal and Informal Alternative Dispute Resolution
(d) Basic and Hybrid ADR

Court Annexed ADR or Independent ADR:

ADR may be either standalone or court-annexed. In other words, ADR may or may not be tied to a lawsuit. When ADR is incorporated into a lawsuit or court proceeding, it is referred to as court-annexed ADR (judicial ADR).

(a) Court-Annexed ADR:

In this instance, resorting to ADR is contingent upon the court process, as it is tied to the country’s justice system. After filing a court case, a judge or court employee will examine the dispute and suggest or order the parties to attempt alternative dispute resolution, such as mediation, conciliation, negotiation, and mini-trials. Under each approach, the judge or a neutral third party will attempt to bring the parties to an amicable resolution.

If they do, the case is dismissed, saving the parties time and money. A court-administered alternative dispute resolution process may precede, follow, or intervene in the formal legal process. There is no obvious reason to favor one of these models over the others. A model that gives disputants access to an ADR process at any stage of a pending suit or case is arguably the best.

(b) Independent ADR:

On the other hand, independent ADR is unrelated to court proceedings. Freestanding ADR occurs when disputants independently engage in conciliation or approach a middleman or neutral third party to negotiate or mediate their dispute. Examples of independent ADR include I commercial arbitration and (ii) community or local ADR.

Commercial Arbitration:

Commercial arbitration is a common form of independent alternative dispute resolution. The disputants agree on a neutral third party or a process for naming the neutral third party to resolve the dispute. In addition, they agree on the rules the arbitrator will use to decide the case and whether or not the decision will be binding or merely advisory. Complex contracts, such as those for the construction of a power plant, typically contain arbitration clauses outlining how disputes will be resolved in advance. In other instances, the parties do not agree to arbitrate until a dispute has arisen.

The Model Law on International Commercial Arbitration, published in 1985 by the United Nations Commission on International Trade Law, has been adopted by the vast majority of countries to facilitate commercial arbitration. This law makes arbitral awards legally enforceable, grants broad rights to commercial parties to choose how they will arbitrate their disputes, and directs courts to only overturn awards in the most limited circumstances.

Community-based alternative dispute resolution is a second independent type of alternative dispute resolution. It builds on traditional models of popular justice that rely on elders, religious leaders, or other community figures to assist in resolving local or community conflicts on a daily basis. In Bangladesh, for instance, the traditional Shalish system, in India lok adalat, and in the Philippines barangays or neighborhoods attempt to resolve minor disputes between villagers.

Different types of ADR in Bangladesh:

Sumaiya Khair suggests that there are three streams of ADR in Bangladesh:

• Extra- judicial or community based ADR (informal);
• ADR in Quasi-formal systems; and
• ADR in formal legal system.

All these ADR modes have been discussed in different chapters in this book with there merits and demerits. Formal ADR in different laws are shown in the diagram below:

Informal ADR in Bangladesh

Informal ADR in Bangladesh includes traditional shalish and NGO modified Shalish. Quasi-formal ADR includes village court and Board of Conciliation have originated from the informal shalish system and this is why they all have been shown in the following single diagram.

ADR in different Bangladeshi Laws:

1. The Code of civil procedure, 1908.
2. The Code of Criminal procedure, 1898.
3. The Artha Rin Adalat Ain, 2003.
4. The arbitration Act, 2001.
5. The Bankruptcy Act, 1997.
6. The Muslim Family Court Ordinance, 1985.
7. The Muslim Family Law Ordinance, 1961.
8. The Gram Adalat Ain, 2006.
9. The Settlement of Disputes (Paura Area) Board Act, 2004.

Binding or Non-binding:

ADR (Voluntary or Mandatory): It is essential to differentiate between binding and non-binding ADR forms. The voluntariness of negotiation, mediation, and conciliation programs depends on the parties’ willingness to reach a voluntary agreement. Arbitration programs may be either enforceable or non-enforceable. Similar to a court decision, binding arbitration results in a third-party decision that the disputants must follow even if they disagree with the outcome. Arbitration that is not binding results in a third-party decision that the parties may reject.

Another aspect of the mandatory versus voluntary nature of ADR relates to the manner in which disputes enter the 0 ADR process. In other words, the use of the ADR system may be mandatory or optional. If the parties are compelled to use alternative dispute resolution (by a court or statute, for example), then the use is binding or mandatory. Conversely, if the use is based solely on the consent of all parties, it is entirely voluntary and non-binding. Prior to court action, some judicial systems require litigants to negotiate, conciliate, mediate, or arbitrate.

ADR processes may also be mandated by a prior contract between the parties. In voluntary processes, the submission of a dispute to an ADR process is determined solely by the parties’ volition.

ADR process is less formal than traditional legal proceedings, such as court cases. It is frequently emphasized that ADR is a less formal dispute resolution process than the formal legal system. The ADR process is informal in that the rules of procedure are flexible and lack formal pleadings, extensive written documentation, and rules of evidence, among others. Now, these informal ADR modes are separated into two categories: formal ADR modes and informal ADR modes. When a particular ADR mode is court-annexed, its records and proceedings may be required to be submitted to the court.

In contrast, when a mode of ADR is independent, it tends to be informal in the sense that neither the parties nor the mediator are required to keep a record of their proceedings, nor are they required to adhere to specific rules of procedure.

For the most part, negotiation is an informal process in which parties identify issues of concern, explore options for resolving those issues, and reach a consensus; if they fail to reach a consensus, the matter concludes without formality, leaving them open to other forms of ADR. Conversely, conciliation and mediation are considered informal when they are independent and formal when they are court-ordered or legally binding.

Traditional Shalish’ or mediation or conciliation through NGO efforts are examples of informal ADR processes, whereas mediation and conciliation through court intervention are examples of formal ADR processes. Arbitration is more formal than other forms of alternative dispute resolution, and it is extremely formal when it is binding on the parties and can be enforced by the court.

A benefit of informal ADR systems is that they are less expensive and less intimidating for disadvantaged communities, which tends to increase the poor’s access to justice.
Additionally, these systems are less expensive for the state and can be placed more easily in locations that will increase access for underserved populations.

Standard and Hybrid Alternative Dispute Resolution in Bangladesh:

Here is a table of different types of court-annexed alternative dispute resolution (ADR) processes:

The variety of ADR models found in developed and developing countries can be described in two fundamental ways: basic ADR processes, which include negotiation, conciliation, mediation, and arbitration; and hybrid ADR processes, in which specific elements of the basic processes have been combined to create a wide variety of ADR methods (e.g., med-arb. combines mediation and arbitration). Hybrid ADR processes may also incorporate court-based adjudication features; for instance, the minitrial combines an adjudication-like presentation of arguments and evidence with negotiation.

Here is a table that compares negotiation, mediation, conciliation, and arbitration:

The Benefits of Alternative Dispute Resolution (ADR)

There are some potential benefits to using ADR. Examples include:

Save Time:

ADR can often settle or decide a dispute much faster; often in a matter of months, even weeks, whereas bringing a lawsuit to trial can take a year or more.

Save Money:

When cases are resolved earlier through ADR, the parties may be able to save money on attorney fees, court costs, and expert fees.’

Increase Control Over the Process and the Outcome:

In ADR, parties typically have more influence over both the process and the outcome. Parties have more opportunities to tell their side of the story in most ADR processes than they do at trial. Some ADR processes, such as mediation, allow the parties to devise novel solutions that would not be possible in court. Other forms of ADR, such as arbitration, allow the parties to select an expert in a specific field to resolve the dispute.

Maintain Relationships:

Alternative Dispute Resolution (ADR) can be a less adversarial and hostile way to resolve a dispute. An experienced mediator, for example, can assist the parties in effectively communicating their needs and points of view to the other side. This can be a significant advantage when the parties’ relationship is at stake.

Increase Satisfaction:

In most trials, there is a winner and a loser. The loser is unlikely to be pleased, and even the winner may be dissatisfied with the outcome. ADR can assist parties in finding win-win solutions and achieving their true objectives. This, along with the other potential benefits of ADR, may increase the parties’ overall satisfaction with both the dispute resolution process and the outcome.

FAQ table in regards to Alternative Dispute Resolution in Bangladesh :

Are you planning to do arbitration or  looking for alternative dispute resolution remedies in Bangladesh?

Tahmidur Rahman Remura TLS is a full-service law firm that has been dealing with arbitration consisting of a wide range of topics at both international and local level. We have barristers that have specialised in  international commercial arbitration from the United Kingdom and accredited civil-commercial mediators. 

If you require any assistance or consultation, please visit our office or contact us at +8801779127165 or +8801847220062 (WhatsApp) or by email- [email protected] 

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165 or +8801708080817

Address: House 410, Road 29, Mohakhali DOHS, Dhaka 1206

How to send a legal notice in Bangladesh

by Barrister Tahmidur Rahman | Jan 3, 2023 | 2023, Law

Sending a legal notice in Bangladesh is a formal way to initiate a legal process and can be an important step in resolving a dispute.

At common law, notice is the fundamental principle in service of process. In this case, the service of process puts the defendant “on notice” of the allegations contained within the complaint, or other such pleading. Since notice is fundamental, a court may rule a pleading defective if it does not put the defendant on notice.

In a civil case, personal jurisdiction over a defendant is obtained by service of a summons. Service can be accomplished by personal delivery of the summons or subpoena to the individual or the individual’s authorized agent. Service may also be made by substituted means; for instance, in many jurisdictions, a summons may be served on a person of suitable age and discretion at the defendant’s residence or place of business. Typically, jurisdiction over corporations can be obtained from a government entity authorized to accept such process.

Here is a guide on how to send a legal notice in Bangladesh:

1. Determine the appropriate recipient:
   
   The first step in sending a legal notice is to determine the appropriate recipient. This could be an individual or a company, depending on the nature of the dispute. Be sure to include their full name and contact information. If you are unsure who the appropriate recipient is, you may need to do some research or seek the guidance of a lawyer.
   
2. Identify the cause of action:
   
   In the legal notice, you will need to clearly identify the cause of action, or the legal basis for your claim. This could be breach of contract, defamation, or another legal issue. It’s important to be specific and to provide details about how the other party has violated your rights.
   
3. Set out the facts of the case:
   
   In the legal notice, you should set out the facts of the case in a clear and concise manner. This should include a timeline of events and any relevant documentation or evidence. Be sure to include dates, names, and other specific details to support your case.
   
4. Demand a resolution:
   
   In the legal notice, you should demand a resolution to the dispute. This could involve asking for compensation, a change in behavior, or some other form of remedy. Be specific in your demands and provide a timeline for action to be taken.
   
5. Choose an appropriate mode of delivery:
   
   There are several options for delivering a legal notice in Bangladesh. You can send it by registered post, deliver it in person, or send it through a process server. Choose the option that is most appropriate for your situation. For example, if the recipient is likely to ignore or refuse delivery of the notice, using a process server may be a more effective option.
   
6. Keep a copy of the legal notice:
   
   It’s important to keep a copy of the legal notice, as you may need to refer to it in the future. This could include keeping a copy of the notice itself, as well as any receipts or other documentation related to its delivery.
   
7. Consider hiring a lawyer:
   
   Depending on the complexity of your case, you may want to consider hiring a lawyer to assist with the process of sending a legal notice. A lawyer can help you draft the notice, ensure that it is properly served, and advise you on your legal options. They can also represent you in court if the dispute is not resolved through the legal notice process.
   
8. Follow up:
   
   The follow-up step is important because it allows you to ensure that the legal notice has been received and that the recipient is taking steps to resolve the dispute. If the recipient does not respond or does not take appropriate action, you may need to consider your next steps, which could include filing a lawsuit or seeking the assistance of a mediator or arbitrator.

FAQs about sending a legal notice in Bangladesh:

here is a table with 15 frequently asked questions (FAQs) about sending a legal notice in Bangladesh:

In summary, sending a legal notice is a formal way to initiate a legal process in Bangladesh and can be an important step in resolving a dispute. By following these steps, you can ensure that your legal notice is properly delivered and that your rights are protected.

Summary of sending a legal notice in Bangladesh with tips

Reply to a legal notice in Bangladesh:

Here are the steps to respond to a legal notice in Bangladesh in more detail:

1. Read the notice carefully:
   
   Take the time to carefully read and understand the legal notice you have received. Pay attention to the specific allegations or requests made in the notice, as well as any deadlines or instructions for responding.
   
2. Seek legal advice:
   
   It is highly recommended that you seek legal advice from a lawyer in Bangladesh to help you understand your rights and obligations in relation to the legal notice. A lawyer can also help you to determine your position on the legal issue and to prepare a written response to the notice.
   
3. Determine your position:
   
   After seeking legal advice, consider your position on the legal issue raised in the notice. Determine whether you agree with the allegations made against you and whether you are willing to comply with any requests made in the notice. If you do not agree with the allegations or requests, consider what arguments or evidence you can present to support your position.
   
4. Prepare your response:
   
   Based on your position, prepare a written response to the legal notice. This response should outline your position on the legal issue and any relevant facts or arguments in support of your position. Be sure to address all of the issues raised in the notice.
   
5. File your response with the appropriate court or tribunal:
   
   If the legal notice was issued by a court or tribunal, you will need to file your response with that court or tribunal. This typically involves submitting a written response, along with any supporting documents or evidence, to the court or tribunal. If the legal notice was issued by a private party, you will need to serve your response on the party that issued the notice. This can typically be done by delivering a copy of your response to the party or by sending it by registered mail.
   
6. Follow any additional instructions or deadlines:
   
   Make sure you follow any additional instructions or deadlines set out in the legal notice, such as appearing in court or providing additional information. If you fail to follow these instructions or meet these deadlines, you may face additional legal consequences.

I hope this helps! Again, please note that this is general advice and may not apply to your specific situation. It is always best to seek legal advice from a qualified lawyer in Bangladesh.

Legal notices are extremely efficient at resolving disputes between two or more parties. Consult a lawyer or another expert who is well-versed in legal jargon for assistance. If you believe you can write on your own, you should first learn how to draft a legal notice and then have an expert perform the final proofreading.

It will assist you in eliminating all superfluous statements from your legal notice. Ensure that you send the legal information as your initial warning to resolve the conflicts. In addition, include a specific timeline. If you continue to receive no positive response from the other party, the case must be brought to court for a final decision. It could be extremely time-consuming and expensive.

Therefore, the first step in resolving the case is to send an effective legal notice. Ensure you are on the right path by conducting a thorough examination of the format and other requirements outlined in this article.

Legal Advice regarding sending legal notices by Tahmidur Rahman Remura:

Barristers, Advocates, and lawyers at Tahmidur Rahman Remura in Gulshan, Dhaka, Bangladesh, have a lot of experience helping clients through the whole process of legal provisions and consequences of sending legal notices by any Domestic and International Companies or individuals in Bangladesh. If you have any questions or need legal help, please send us an inquiry over email or phone.

Email at: [email protected]
Call us on: +8801847220062, +8801779127165
Address: House 410, Road 29, Mohakhali DOHS Phone: +8801779127165 or 01847220062