Principles of technopreneurship

b) Location of the registered office

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Techno 1 notes

d) The limited liability of the shareholders
f) The names of signatories
1.2.2 Articles of Association
Disadvantages

b) Location of the registered office: It is the address to which official and legal notices will be sent. It need not be the company’s principle place of business.
c) The objects of the company: The objectives for which a company has been formed, its powers and areas of business, are defined in the objects clause of the Memorandum. These are normally kept very general (as in general commercial activities) to avoid activities and transactions being declared ultra vires (outside of the powers of the company).
d) The limited liability of the shareholders: This clause in the Memorandum limits the liability of shareholders to the value of their shares.
e) The share capital and structure: The amount of authorized capital, and how it is divided into shares, is specified. Shares are normally made up of relatively small denominations in order to retain flexibility in transfer and issuing of new shares. The amount of capital subscribed for by shareholders, i.e. shares issued and paid for, is the issued share capital of a company. Sometimes not all the authorized capital is subscribed for, some shares being authorized but not issued.
f) The names of signatories: At incorporation, there must be two signatories who agree to takeout at least one share each. When formed, a company has to have at least two shareholders, at least one of whom is a director a company secretary who mayor may not be a shareholder) is also appointed. Shareholdings can later change so that one person can own all the shares.
1.2.2 Articles of Association
The Articles contain detailed information about the internal management of the company. They deal with appointment of directors, their powers and fees, and procedures for meetings. They deal with the relationships between the company and shareholders and between shareholders e.g. they provide for the issue of new shares to be offered first to existing shareholders, in proportion to their existing holding so that they can protect their percentage stake in the company.
Advantages
a) Limited liability for shareholders b) Easier to widen ownership base

Technoprenuership1 15 c) Finance easier to raise externally especially from equity
Disadvantages
a) Loss of confidentiality as some records are publicly filed b) More time consuming and expensive to setup c) Double tax when company pays corporation taxon profits and capital gains and shareholders are personally taxed on dividends.

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