Theory question 102
Business Units(a) List five contents of a Memorandum of Association and five contents of an Articles of Association.
(b) Explain five problems faced by public corporations.
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(a) Memorandum (any five): name of the company with 'Limited'/'Plc'; address of registered office; objects clause; limited liability clause; authorised share capital; statement that it is a private or public company; names and signatures of subscribers (association clause).
Articles (any five): types of shares and how they are issued and transferred; rights of each class of shareholders; voting rights; how meetings are called and run; appointment, powers and removal of directors; borrowing powers; how dividends are declared; appointment of auditors and keeping of accounts.
(b) Any five, explained: political interference in management and appointments; inefficiency and bureaucracy; lack of profit motive leading to waste; inadequate funding by government; corruption and embezzlement; poor management/unqualified staff; monopoly, so no competition to push efficiency; workers' 'nobody's property' attitude; poor maintenance of equipment.
Memorandum = external relations; Articles = internal rules.