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ZIMSEC O Level Commerce Notes: Private Business Corporation

Private Business Corporation

  • found in the private sector.
  • Governed by the Private Business Corporation Act of 1993.
  • A cross between partnerships and limited companies.
  • A legal entity or body corporate which can sue or be sued in its own name.
  • Formed by a minimum of one to a maximum of twenty members.
  • Prepare an incorporation statement and drafts by-laws.
  • Pays a fee, to the Registrar of Companies for the registration and processing of the incorporation statement and bylaws.
  • Members have limited liability.
  • There is continuity even if one of the members leaves or dies.
  • Its name ends with the words Private Business Corporation or the capitalised abbreviation PBC.
  • Every member is an agent of the PBC.
  • All members are directors and choose a chairman to run the affairs of the business.
  • Every member takes part in the managing the affairs of the business.
  • No remuneration is paid to members for taking part in the managing of the business.
  • Any contract entered into by one member is binding on all members.
  • Any disputes about the affairs of the business are settled by a majority decision.
  • Each member contributes capital in the form of cash, assets or services to the PBC.
  • Can be converted into a company with not more than 20 members.
  • No partnership, association or body corporate or any other legal person or any person convicted of theft, forgery or fraud can be a member.
  • Any member, may at any time convene a meeting by giving all members notice of the time and place and purpose of the meeting.
  • The chairman of the meeting can be any member.
  • The chairman does not cast any votes.
  • Each member has a vote equivalent to the percentage of capital they contributed.
  • Financial statements are prepared at least once annually.
  • They are private.
  • They are sent to the Registrar of Companies.
  • Are approved and signed by one or more members whose capital aggregate is more than fifty percent.

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