Observation

Most candidates who attempted this question did well in the question.

The expected responses to the question include:

       (a) i.               Contents of Articles of Association

• Procedures for winding up
• Borrowing power
• Types of meetings
• Appointment of auditors
• Transfer and issue of shares
• Appointment and qualification of the Board of Directors
• Procedure for declaration of dividend
• Rights of shareholders

           ii.         Contents of Memorandum of Association

• Object clause
• Company’s name
• Registered office
• Authorized/Nominal/Registered capital
• Nature of company’s liability
• Signature of the founders

                                                              
        (b)     Roles of the following on the stock exchange

1. Issuing house

• It arranges for the issuing of new securities on the stock exchange on behalf of companies.
• It acts as customer to the issuing companies.
• It acts as supplier to the investing members of the public.
• It acts as custodian of securities.
• It advises the issuing companies as to the price, quantity and timing of issue.

2. Underwriter

• He provides insurance services only for newly issued securities in the capital market.
• He undertakes in buying any unsubscribed securities by members of the public.

3. Broker

• He acts as agent of investors in buying securities at the stock exchange.
• He arranges for the transfer of share certificates between buyers and sellers of securities.
• He advises companies intending to issue securities on the price, amount and quantity involved.
• He renders advisory services to investors on profitable ventures.

4. Jobber

• He buys securities through the stock brokers.
• He provides convenience for the broker in getting the securities sold.
• He makes it easy for brokers to get supplies of the type of securities his client requests.
• He provides advisory services to the brokers.