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Kilbay Ltd has limited liability - Leaving Cert Business - Question 5 - 2009
Question 5
Kilbay Ltd has limited liability. Explain the term 'limited liability'. Using today's date, draft the Notice and the Agenda for the Board of Directors meeting. (The... show full transcript
Worked Solution & Example Answer:Kilbay Ltd has limited liability - Leaving Cert Business - Question 5 - 2009
Step 1
Kilbay Ltd has limited liability. Explain the term 'limited liability'.
Answer
Limited liability means that shareholders or investors in a company can only lose the amount they have invested in the business. In the event of the company going bankrupt, their personal assets are protected, and they cannot be forced to sell personal property to cover business debts. This structure encourages investment, as the risk of personal financial loss is minimized.
Step 2
Using today's date, draft the Notice and the Agenda for the Board of Directors meeting. (The Agenda must contain at least five items)
Answer
Kilbay Ltd
Notice to each Board member: A meeting of the Board of Directors of Kilbay Ltd will take place in the Boardroom on the 9th of June 2009 at 7.30 p.m.
Agenda:
- Minutes of the last Board Meeting
- Matters arising from the minutes
- Effects of economic downturn on Kilbay Ltd
- Possible introduction of a three-day week
- Future sources of finance for the company
- A.O.B.
Signed: Seán Byrne Managing Director
Andy Name Secretary
Step 3
Explain the term 'minutes' of a meeting.
Answer
Minutes refer to the official written record of a meeting, prepared by the secretary. They include essential details such as the names of attendees, absentees, the topics discussed, decisions made, and any actions agreed upon for future meetings. Minutes provide a reference for following up on discussions and ensure accountability.
Step 4
Outline two advantages of meetings as a method of communication.
Answer
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Meetings allow participants to exchange ideas and information, fostering collaboration and effective planning. They provide a platform for brainstorming, where individuals can discuss and develop solutions together.
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Meetings help with problem-solving by enabling face-to-face interaction. This encourages open dialogue and allows for immediate feedback, enhancing mutual understanding and facilitating quicker decision-making.
Step 5
Name two long term sources of finance and explain one of them.
Answer
Two long term sources of finance are:
- Long-term loans/debentures
- Share capital
Long-term loans or debentures are forms of borrowing where companies raise capital for extended periods, typically over 5 years. These loans are secured against company assets, offering security to lenders. Borrowing through this method allows a company to maintain control while accessing funds needed for expansion, innovation, or to cover major project costs.