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Questions and Answers
What is the main purpose of company law?
What is the main purpose of company law?
- To provide tax benefits to companies
- To maximize profits for shareholders
- To restrict competition in the market
- To regulate the formation and operation of companies to ensure transparency and accountability (correct)
What is a key characteristic of a public company?
What is a key characteristic of a public company?
- It is not required to disclose its financial statements
- It can offer its shares to the public and has a minimum share capital requirement (correct)
- It is owned and operated by the government
- It can only have a maximum of 10 shareholders
What is the purpose of the memorandum of association for a company?
What is the purpose of the memorandum of association for a company?
- To specify the financial contributions of each shareholder
- To appoint the company's directors and officers
- To outline the company's internal management structure
- To state the company's external activities and powers (correct)
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Study Notes
Company Law
- The main purpose of company law is to regulate the formation, management, and dissolution of companies, ensuring fair and transparent dealings with stakeholders.
Public Companies
- A key characteristic of a public company is that it can raise capital by issuing shares to the general public, allowing anyone to become a shareholder.
Memorandum of Association
- The purpose of the memorandum of association is to outline the company's objectives, powers, and structure, providing the conceptual framework for a company's existence and operation.
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