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Question 4 |
- List four sources of capital to a Public Limited Company.
- State four advantages and four disadvantages of converting a privately owned business into a Public Limited Company..
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Sources of capital to a Public Limited Company and the advantages of public limited company were very well attempted by the candidates. The following point were not listed by candidates.
Sources of leasing:
- Equipment leasing
- Sale and lease back.
- Trade credit.
Advantages of Public Limited Company
- It has resources to engage the services of experts.
- Employees can become shareholders of the Company.
Disadvantages of Public Limited Company
The performance of the candidates in this part of the question was below average. The following points should be noted.
- The Company is not flexible as it can only carry on business stated in its object clause in the memorandum of association.
- There are high taxes on Company profits.
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