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20 Obstacles of Effective Communication

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INTRODUCTION TO COMPANY

A company can be defined as a group of persons associated together for the purpose of attaining a common object, social or economic. Normally it is formed to carry on business with a view to earn profit. Also a company can be defined as an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business and who share the profit and loss therefore.

Characteristics of the Company

1: Artificial Legal person. A company is an artificial because it is a creation of law. It does not take birth like a natural person but comes into existence through law. It has to act through a board of directors elected by shareholders. The board of directors are the brain and the only brain of the company which is the body of the company and the company can and does act only through them.

2: Common seal. A company being an artificial person can not sign documents. The law therefore has provided for the use of a common seal with the name of the company engraved on it as a substitute for its signature. No document issued by the company shall be binding on it unless it bears the common seal which is duly witnessed by at least two directors of the company.

3: Transferability of shares. Members of public limited company are free to transfer the shares held by them to anybody. Shares can be sold and purchased through the stock exchange. However in a private company such transfer may be restricted by the articles.

4: Capacity to sue and being sued. The suits of the company are the suits of the company and not of the shareholders. This in case of suits for the company, the company is the proper plaintiff and where the company is sued it is the proper defendant.

5: Separation of ownership and management. The number of shareholders who are the owner of the company is fairy large and hence all of them can not take part in the management of the company. The law therefore provides for the board of directors elected by members in the general meeting of the company to govern the affairs

Types of companies
The companies may be categorized into several different forms depending on the line of division that one may take. Basing on ownership (shareholding) we may have Private and Public companies.

A: Private Companies. ▪ Basic characteristics:

1: Restricted membership. Private company may lawfully exist with a minimum of two members and maximum of fifty members. In case the member falls out below two for more than six months, the members may be severally held liable.

2: Flotation of shares.
Their articles prohit any invitation to the public to subscribe for any shares of or debentures of the company.

3: Directors.
It requires a minimum of one director to operate.

4: Transfer of shares.
Restricts the right to transfer its shares.

B: Public Companies. ▪ Basic characteristics:

1: Open membership.
The general public is allowed to subscribe for membership on fulfilling few general conditions. It requires a minimum of seven members to kick off.

2: Directors. The minimum requirement of directors is two.
3: The memorandum of which states that the company is a public company.
4: It can not commence business until the required share capital is raised.
5: It has to convene a statutory meeting within three months after commencement of business.
6: It relatively observes much transparency: A prospects is required reveal all information as investors and their professional adviser would reasonably require and except to find there for purpose of making an informed assessment of assets, liabilities etc

Private and public companies may either be local or foreign; holding or subsidiary; statutory or formal under the company ordinance; limited by guarantee or by shares.

Classification of companies ▪ Chartered companies ▪ Statutory companies ▪ Registered companies

i. Chartered Companies
This form of company is very old model of companies which does not exist today because businessmen prefer to trade through the modern registered companies. Nevertheless the Chartered company is a creature of the 16th and 18th centuries when it was popular. It existed during colonialism.

ii. Statutory companies
These companies are incorporated by a special Act passed by the parliament. Such companies are generally formed to carry out some special undertakings. These companies are owned by the government and their main objective is to provide some necessary services for the benefit of the entire country. These companies are generally formed to meet social needs and not for the purpose of earning profit.

iii. Registered companies
Such companies come into existence only when they are registered under the Act and a certificate of incorporation has been issued by registrar. Such companies derive their power from the companies Act and the memorandum of association. These companies are usually formed by the private person.

A company comes into existence after going through a series of processes. These processes are ; ▪ Promotion ▪ Incorporation or Registration ▪ Capital subscription ▪ Commencement of business

COOPERATIVE Cooperative is an autonomous association of persons who voluntarily cooperate for their mutual social, economic and cultural benefit. Cooperate include non-profit community organization and business that are owned and managed by the people who used its services. A cooperative is a business owned and controlled by the people who use its services. They finance and operate the business for their mutual benefit. By working together they can reach an objective that would be unattainable if acting alone. The purpose of the cooperative is to provide greater benefits to the members such as increasing individual income or enhancing a member’s way of living by providing important needed services. In many respects cooperatives resemble other business. They have similar function and must follow sound of business practices. They usually incorporate under state laws and require by laws and other necessary legal papers. Members elect a board of directors to represent their interests. The board sets policy and hires a manager to run the cooperative day-to-day business. Even though cooperative are similar to many other business, they are distinctively different. Some differences are found in the cooperative’s purpose, ownership, control and distribution of benefits.

Characteristics of cooperative:
Cooperative follow three principles that define or identify their distinctive characteristics ▪ User-owned ▪ User –controlled ▪ User-benefited.
A) User-owned: The user- owned principle means the people who own and finance the cooperative are those who use it. Use” usually means buying supplies, marketing product or services of the cooperative business. Members finance the cooperative through different method.
1:By direct contribution through a membership fee or purchase of stock.
2: By an agreement withhold a portion of net earnings (profit)
3: By assessments based on unit of product sold or purchased.
B) The user-Controlled: (Democratic control) The user-controlled principle says those who use the cooperation also control it by electing a board of directors and voting on major organizational issues. This is generally done in a One-member, One-vote basis, although some cooperatives may use proportional voting based on use of cooperative.
C) The user-benefit The user-benefit principle says that the cooperatives sole purpose is to provide and distribute benefits to members on the basis of their use. Members unite in cooperative to receive services otherwise not available, to purchase quality supplies, to increase market access or for other mutually beneficial reasons. Members also benefit from distribution of profit based on the individual’s business volume with the cooperative.

PUBLIC ENTERPRISE As a form of business organization, it has attained a great deal of significances in recent times. During 20th century, various governments have taken active part in the industrial and commercial activities. The term public enterprise denotes a form of business organization owned and managed by the state government or any other public authority. So it is an undertaking owned and controlled by the local state or central government. The whole or most of the investment is made by the government. According to A.H Hanson, a public enterprise denotes state ownership and operation of industrial, agricultural, financial and commercial undertakings. According to N.N Malaya, public enterprises autonomous or semi-autonomous corporations and companies established, owned and controlled by the state and engaged in industrial and commercial undertakings.
Characteristics of Public enterprise: a) Autonomous or semi-autonomous organization. Public enterprise is an autonomous or semi-autonomous because some enterprise work under direct control of the government and some organization are established under statutes and companies Act.
b) State control. The public enterprises are financed, owned and managed by the government, may be a central or state government.
c) Rendering services. The primary objective of the establishment of public enterprise is to serve the public at large by supplying the essential goods at a reasonable price and creating employment opportunities.
d) Useful to various sectors. The public enterprise serves all sectors of the people of the company. They do not serve a particular section of the people in the community.
e) Monopoly enterprises In some specific cases, private sectors are not allowed and as such the public enterprises enjoy monopoly in operation. The state enterprise enjoy monopoly in railways, energy production, post and telegraph.
f) A direct channel for use of foreign money. Sometime the government receive foreign assistance from industrially advanced countries for the development of industries. These advanced received are spent through public enterprises.
g) Public accountability The public enterprises are liable to the general public for their performances because they are responsible for the nation.
h) Agent for implementing government plans. The public enterprises run as per the whims of the government and as such the economic policies and plans of the government are implemented through public enterprises.
i) Financial independence. Through investment in the government undertakings are done by the government, they become financially independent by arranging finance for day-to-day operation.

Different between Company and cooperative. The different between company and cooperative is that, company is a group of persons associated together for the purpose of attaining a common goal, it can be social or economic object. The common and main object of the company is to make “profit”. People (shareholders) invest their money and employ it in some trade or business and share the profit and loss they make. There is a limit number for company persons, no company association consisting of more than twenty persons unless is registered under the Act. So there is registration of the company under registrar of the companies, while cooperative is an autonomous association of persons who voluntarily cooperate for their mutual social, economic and cultural benefit. Cooperative also include non-profit community organizations which are owned and managed by the people who use its services. The purpose and common object of the cooperative is to to provide greater benefits to the members. So, the different between the company and cooperative can be found in the purpose, ownership, control and distribution of benefits.
Different between Company and Public enterprise. The different between the company and public enterprises can be found in their purpose (objects), ownership and control. The main object of the company persons is to make “profit” through the business they run while the main object of public enterprises is to provide “services” to the community by supplying the essential goods at reasonable price and creating employment opportunities because they are responsible for the nation. The company is financed by the people (shareholders) while the cooperative is financed by the government, so the owner of the company are those people who invest their money while cooperative is managed by the state government or any public authority.…...

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