(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.