In numbered paragraphs, distinguish between the following:
i) Statutory corporations and limited companies
ii) A memorandum of association and articles of association
ANSWER
| Statutory Corporations | Limited companies |
| These are incorporated associations created by statute. They owe their existence to an Act of Parliament. | These are incorporated associations created by registration |
| The Act provides them with a name and prescribes its objects | Promoters must comply with the Provisions of the Companies Act. |
| The corporation is a body corporated with perpetual succession limited liability capacity to contract sue or be sued and own property. | On registration the association becomes a body corporate by the name contained in the memorandum of association. |
| Examples include Agricultural Finance Corporation, Kenya Wildlife Services, Kenya Air Ports Authority Public universities. | Their objects are prescribed by the memorandum of association. |
| All state corporations belong to the state hence have one member. | Their features are generally similar to those of statutory corporations. |
| Interest may be transferred by the government. | However registred companies are different in that
• Membership is prescribed by law for example the minimum number of members is two for both public and private companies. However, where as the membership of a public company is unlimited, a private company cannot have more than 50 members unless the excess members are or have been employees of the company. • Members interest in the company is transferable. • Companies are managed by directors. • There are two types of registered companies namely public and private |
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