EFFECTS OF MOA & AOA EFFECT S MOA & AOA

COMPA NY TO MEMBE RS

1. S.33 (1) CA provides that MOA & AOA are contract between the company and its members. 2. MOA & AOA do not create contractual relationship between the company and outsider. 3. A member may restrain the company and its member from acting in breach of its article.

1. MOA & AOA is a contract between the members inter se. MEMBE RS TO MEMBE RS 2. S.31 (1) CA provides that MOA and AOA contain a covenant that each member will observe all the provision stated in it. 3. Thus a member may find himself bound by the terms which he has not consented to. 4. A member may enforce his sight against the other member through injunction which may be brought directly to the other member without inserting the company as a party to the suit. 5. The fairness and unfairness of the article is not relevant.

PUBLIC A company that has sold a portion of itself to the public via an initial public offering of some of its stock, meaning shareholders have claim to part of the company's assets and profits. Ability to tap the financial markets by selling stock (equity) or bonds (debt) to raise capital (i.e. cash) for expansion and projects.

DIFFERENCES PRIVATE INTERNATION AL The company is owned by the company's founders, management or a group of private investors A company that has offices and works in many countries. They are often referred to as multi-nationals.

LISTED Firm whose shares are listed (quote d) on a stock exchange for public trading. Also called quoted company.

Management doesn't have to answer to stockholders and isn't required to file disclosure statements with the SEC.

A company which operates in more than one country and international means a company which exists in one country but sells products in more than one country. Are importers and exporters, they have no investment outside of their home country.

It is the securities that are listed, not the company. The phrase listed company is widely used to mean a company that has listed ordinary shares. Listing in more than one market is possible through secondary listings, or through the more complex approach of dual listing.

Has no requirement to publicly disclose much, if any financial information; such information could be useful to competitors

Can't dip into the public capital markets and must therefore turn to private funding, which can boost the cost of capital and may limit

expansion. Seek to increase profits for shareholders. Seek to minimize the tax bite Seek to minimize tax bite and increase profits for shareholders. Establishes a secondary market for company shares and a price for company stock.