Professional Documents
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TO
Design consultancies
Public organizations.
& ultimately went out of business because none of these ever thought
any invention of the type invented by Wright brothers which replaced
them. Now How is the invention of airplane related to these MS?
None except that the rail companies turned blind eye towards this new
development. As almost after 30 yrs people replaced
their use by airplanes for all kinds of uses and cargo
freights to any corner of the world.
Error of American Railways
Companies
They chose simply a wrong mission statement. Their futures could
have been different if they had chosen a statement like following.
“To provide a quarter of all the transport miles sold in USA over
the next decade.”
By simply changing only one word & they would have kept a keen
eye towards developing new transport technologies & ultimately
would have been the 1st to add air transport to its portfolio of
products.
A rail company have success in achievement of this goal would
Divisional objectives
Corporate objective are not immovable/static & they need maintenance for
appropriation. Sticking doggedly to outdated objectives is not advantageous
to the org as it can lead to missing the opportunities.
A maximum of 20 partners is allowed according to English law. But tow cases are
exempted from this limit.
1. Banks, where maximum allowed is 10.
2. Certain professional partnerships like Solicitors & accountants where law does
not permit to form companies, so there could be more than 20.
In partnership every partner is jointly liable for any contract made by any other
partner, irrespective of prior knowledge. If one partner agrees to supply a piece of
equipment in a stipulated time, then it will have a binding on all the partners.
If a partner leaves the business then all contracts have to be informed that the
person concerned will not be liable for future contracts, his name will be removed
from business stationary
Features of Partnership
business:
1. Liabilities and decision making are shared. To reach a decisions difficult because it
requires consultation and agreement among all partners. So clear lines of
demarcation for various aspects of management & operations of business can
alleviate this problem.
Advantage: Skills and experience of partners complement each other.
Disadvantage: Liability as a partner exist, if the partner did not know or agree to a
particular contract.
2. Less formality and expenses are required in comparison to form a company
3. Accounts do not have to be disclosed to competitors or to public.
4. Initially it would be possible to raise large amounts of capital because of large
number of people having resources will be involved in it. But extra capital if
required will be difficult to obtain due to limited additional security because many
people use their homes as security for loan.
5. Partnership can be suddenly dissolved if one partner dies or goes bankrupt, unless
this event is covered in the deed of partnership.
6. Holidays & illness can be covered by other partners.
3) Cooperatives & their
principles:
Cooperatives involve a voluntary association of people, known as members and operate an
enterprise collectively. Their aim may not be to make profit.
1. Cooperatives are run on the basis of one member, one vote irrespective of how much each
member has invested. The managers are also democratically elected on same basis.
2. Main advantage: cooperative operations give support to the members of the cooperatives.
There is little asset stripping (asset stripping means assets are sold off to provide profits).
3. Membership allows good industrial relationships.
4. There is open & voluntary membership for all who work in the organization.
5. Interest paid on capital is limited.
6. Business is conducted for the mutual benefit of the members & all profits are shared.
Particularly people are paid on the basis of what they need rather than on the basis of ‘market
rate for the job’.
7. Business must be socially aware & act responsibly towards other businesses, customers,
suppliers & local community
8. They don’t necessarily make profits. Liability of members is achieved by registering with
Register of Friendly Societies.
Companies:
A company has a separate legal identity from its owners & continues to operate even if the
owners & managers change.
It is owned by shareholders who each have a liability which is limited to the nominal value
of their shares. This nominal value is originally promised in return for the allotment of
shares & is usually different from the price of shares being traded on the stock market.
The trading price reflects the value placed on the company by investors
In UK both public & private companies are registered with Registrar of Companies,
whereas in Pakistan they are registered with SSECP.
Creating a Company: process of company creation is called incorporation & during it
two documents are drawn up:
1) Memorandum of Association
2) Article of Association.
Memorandum relates to the external affairs of the company giving information like
Company name
Registered office
Company purpose
Its share capital
Companies:
The Articles relate to the internal operation of the company & include things as:
The rights of the shareholders &
The powers of its directors
The above documents along with others defining the amount of capital & number of directors are
submitted to the Registrar of Companies in UK & to SSECP in Pakistan with a fee. Then they
are issued a certificate of incorporation.
After incorporation, the company details are made available for public inspection & then private
company can start to trade immediately.
But a public company may not trade until the registration authority is satisfied. & unless the
necessary share capital has been allotted.
The regulation of the companies is achieved through Companies Act which states that the
company has to regularly prepare & publish information about its activities. Further the
companies are allowed to carry out only the activities defined in the OBJECTS CLAUSE of its
Memorandum of Association. But this clasue can be amended in accordance with the Act.
Memorandum relates to the external affairs of the company giving information like
Company name
Registered office
Company purpose
Its share capital
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