Theory question 102
Government and BusinessCommerce 2 (essay)
(a) State five features of a public corporation.
(b) List and explain five sources of capital available to a limited liability company.
Show the model answer
(a) Any five: created by an Act/decree; owned and controlled by government; managed by a board appointed by government; provides essential services at moderate prices; not mainly profit-motivated; financed by government grants/subsidies; is a legal entity that can sue and be sued; accountable to a minister/parliament.
(b) Any five, explained: issue of shares (ordinary and preference); debentures (long-term loans at fixed interest); retained/ploughed-back profits; bank loans; bank overdrafts; trade credit; leasing/hire purchase of equipment; debt factoring; government grants/tax holidays; sale of assets.
Explain each source in (b) in a sentence.