Theory question 104
Co-operative SocietiesCommerce 2 (theory)
(a) State five merits of co-operative societies.
(b) Explain five procedures to be followed in the formation of a Private Limited Company.
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(a) Any five: eliminate middlemen and lower prices; encourage saving; give members cheap loans; democratic control (one member, one vote); limited liability; profits shared according to patronage; educate members; promote self-help and unity.
(b) Any five, explained: promoters agree to form the company (at least two members); choose and reserve a name with the Corporate Affairs Commission (Registrar); prepare the Memorandum of Association; prepare the Articles of Association; prepare a statutory declaration and list of directors, registered address and share capital; pay registration fees and stamp duties; submit documents to the Registrar; receive the Certificate of Incorporation, after which the private company can start business.
A private company can start business once it gets its certificate of incorporation.