State four reasons for privatising public corporations. (4 marks)

3/12/2020

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Reasons for privatising public corporations

To improve efficiency in their operations.
To generate revenue to the government through sale of shares and taxes.
To enhance competition.
To increase public participation in economic activities of the country.
To reduce government expenditure.
To comply with conditions set by development partners and international donor agencies.
To enable the government to concentrate on other state responsibilities.
To minimize political interference.

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State four features of a parastatal. (4 marks)

1/12/2020

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Features of a parastatal

Provide essential services.
Not profit motivated.
Is formed by an Act of Parliament.
Is mainly funded by the government.
Is managed by government appointees.
Any surplus earned-is surrendered to the government.
Has limited liabilities. ‘
Attachment to a government ministry.
Can be dissolved only through an act of parliament

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Outline four circumstances under which a co-operative society may be dissolved. (4 marks)

30/11/2020

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Circumstances under which a co-operative society may be dissolved

Outline four circumstances under which a co-operative society may be dissolved. (4 marks)

By government order /change in the law.
Where the co-operative continuously make losses.
Where a stipulated majority of members agree to dissolve it.
By a court order.
Where the co-operative society has achieved objectives for which it was formed.

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Highlight four activities that may be carried out in a stock exchange market.

30/11/2020

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Activities that may be carried out in a stock exchange market

Highlight four activities that may be carried out in a stock exchange market. (4 marks)

Buying and selling of shares.
Mobilising savings for investment.
Listing of companies.
Issuing of new securities / raising capital.
Publication of statistical information.
Advising investors.

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Explain five benefits that a private limited company would get by converting to a public limited company. (10 marks)

29/11/2020

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Benefits that a private limited company would get by converting to a public limited company

Benefits that a private limited company would get by converting to a public limited company include:

Ability to raise larger amounts of capital. Converting to a public limited company will enable the firm to access more funds by selling shares to members of the public through the stock exchange.
Enjoy permanency of capital. Shareholders cannot easily withdraw the shares bought in public limited companies such shares can only be sold to other investors.
Increased transparency and accountability. The shareholders must scrutinize and approve the company’s annual audited accounts which must also be published.
Increased public confidence in the company. This is due to increased exposure to the public and control by the stock exchange.
Freedom from interference by owners as it operates as a separate legal entity in which owners have no direct managerial control.
Increased professionalism and specialization in management. It is mandatory to have professional managers and staff to run the company on behalf of the shareholders.
Perpetual succession. The firm is assured of continuity since shares can be transferred and membership changed without affecting the business.

Explain five benefits that a private limited company would get by converting to a public limited company.

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Outline four benefits that may be realised when two firms form a merger. (4 marks)

28/11/2020

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Benefits that may be realised when two firms form a merger

Benefits that may be realized when two firms form a merger include:

Increase in the volume of output.
Increased control over supplies.
Increased influence on the market/customers.
Reduced cost of operations as a result of economies of scale.
Access to larger capital.
Increased ability to control prices of the product.
Elimination of unhealthy competition. Ability to employ more qualified personnel.
Increased quality of output.
Combined talents and skills which may lead to better management.

benefits that may be realised when two firms form a merger

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Outline three ways through which a partnership may be formed. (3 marks)

27/11/2020

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Ways through which a partnership may be formed

Ways through which a partnership may be formed include:

A simple written agreement between the parties.
An oral agreement between the partners.
Action by members implying agreement to conduct business together.
A signed legal agreement (partnership deed).
By provision of the partnership act where there is no known agreement.

Explain five clauses that must be specified in the Memorandum of Association of a public limited company. (10 marks)

24/11/2020

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clauses that must be specified in the Memorandum of Association of a public limited company

Clauses that must be specified in the Memorandum of Association of a public limited company include:

The Name Clause.
This clause states the name of the company and ends with the word “limited”. This name must be unique to the company and not shared with any other.
The Objects Clause.
This clause states the objectives of the company and specifies what the company has powers to do.
The Situation Clause.
This clause states the physical location of the company’s registered office.
The Liability Clause.
This clause states the extent to which members are liable to the debts of the company. Shareholders and members have “limited liability”.
The Capital Clause.
This clause states the amount of capital that the company is authorized to raise, the capital structure, the composition and the values of the shares.
Association and Subscriptions Clause.
This clause contains a declaration by the original members who registered the company about their desire to form a company, their objectives, the number of shares they will own and their personal details.

Explain five clauses that must be specified in the Memorandum of Association of a public limited company

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State four categories in which the various types of business partners may be classified.(4 marks)

22/11/2020

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Categories in which the various types of business partners may be classified

Categories in which the various types of business partners may be classified include:

By capital contribution.
By extent of liability to be borne.
By activity (part played in the day-to-day running of the business)
By age.

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Outline four features of co-operative societies.

31/5/2020

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Features of co-operative societies

Answer

Features of co-operative societies include:

Formed by a minimum often members
Run by management committee.
Governed using by —laws.
Surplus/profits is distributed to members.
It is a separate legal entity from the members.
It has limited liability.
it has perpetual succession
Its main source of capital is the shares contributed by members

Outline four features of co-operative societies

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Outline four roles played by the Nairobi Securities Exchange in the Kenyan economy.

29/5/2020

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Roles played by the Nairobi Securities Exchange in the Kenyan economy

Answer

The roles played by the Nairobi securities exchange in the Kenyan
economy include:

A measure of the country’s economic performance as reflected in the prices of shares.
Sets the price/value of securities based on the forces of demand and supply.
Ensures safety of transactions since the financial health listed companies is usually verified.
Promotes economic growth through disinvestment and reinvestment
Promotes local ownership through sale and purchase of shares.
Provides ready market for sale and purchase shares hence improving liquidity.
Promotes saving and investment among the population

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State four reasons for privatising public corporations. (4 marks)

Reasons for privatising public corporations

State four features of a parastatal. (4 marks)

Features of a parastatal

Outline four circumstances under which a co-operative society may be dissolved. (4 marks)

Circumstances under which a co-operative society may be dissolved

Highlight four activities that may be carried out in a stock exchange market.

Activities that may be carried out in a stock exchange market

Explain five benefits that a private limited company would get by converting to a public limited company. (10 marks)

Benefits that a private limited company would get by converting to a public limited company

Outline four benefits that may be realised when two firms form a merger. (4 marks)

Benefits that may be realised when two firms form a merger

Outline three ways through which a partnership may be formed. (3 marks)

Ways through which a partnership may be formed

Related Searches on Forms of Business Units Form 2 Level

Explain five clauses that must be specified in the Memorandum of Association of a public limited company. (10 marks)

clauses that must be specified in the Memorandum of Association of a public limited company

State four categories in which the various types of business partners may be classified.(4 marks)

Categories in which the various types of business partners may be classified

Outline four features of co-operative societies.

Features of co-operative societies

Answer

Outline four roles played by the Nairobi Securities Exchange in the Kenyan economy.

Roles played by the Nairobi Securities Exchange in the Kenyan economy

Answer

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