(a) State five features common to both public and private limited companies. (b) State five provisions of a memorandum of association.
Explanation
(a) Features common to both public and private limited companies: (i) Perpetual existence: Both companies are created by law. The death of members do not bring the companies to an end. (ii) Legal documents: Both companies must submit the memorandum of association and Articles of Association to the Registrar of companies before incorporation. (iii) Limited liability: The liability of the shareholders is limited to the amount of share capital contributed by each shareholder. (iv) Dividend: Both companies distribute dividend to their shareholders. This is based on the number of the shareholding. (v) Annual financial report: Both companies must submit their statutory annual reports/returns to the Registrar of companies. (vi) Control/Management: Both companies have board of directors that make policy decisions. (vii) Taxation: Both companies as legal persons pay income tax. (viii) Legal identity: Both are legal persons, they can sue and be sued in their own names. (ix) Membership: Both have no lower or upper limit as to number of shareholders. (x) Formation: Both register with the registrar of companies. (xi) Ownership: Both are owned by shareholders. (b) Contents/provisions of memorandum of association: (i) The name of the company with LTD/PLC as the last word. (ii) The address of the registered office of the company. (iii) The object of the company/the purpose for which the company was set up. (iv) The names of the promoters/directors, their shareholding and their signature to show consent. (v) The amount of authorized share capital. (vi) The nominal or par value of each share. (vii) A statement that the liability of members is limited.