Company Law (BTEC) Task 2: SBE Analysis, Memorandum, and Prospectus

This report presents an analysis of Company Law Task 2, focusing on a Small Business Enterprise (SBE). It identifies the strengths and weaknesses of SBE, offering recommendations for improvement and methods for managing performance. The report delves into the requirements for the memorandum of association, drawing articles of association to cover expected changes, and evaluating the doctrine of ultra vires and its impacts. Furthermore, it outlines the contents of a prospectus and includes a reflection on the learning gained from the task, including the application of Tuckman's theory for group formation. The report is based on the BTEC Level 4/5 HNC/D Diploma in Business curriculum.

COMPANY LAW
TASK 2

TASK 2a
1.1 Identification of the strength and weaknesses
of SBE
Strengths:
 Following all the rules and laws
farmed by authorised party
 Mentioning all the expenses and
fund utilised for the business
purposes in memorandum
 Having a great market presence in
the industry
 Higher level of the quality of goods
and services
 Low prices of the products as
compared to rivals
Weaknesses:
 The firm is weak in terms of
managing cost
 Poor financial performance
 Less market share in the industry
where it operates
 Sometimes cannot include
required information in article of
association

2.1 Recommendation for overcoming
such weaknesses
 Needs to ensure that needed information mentioned in
article of association or not at the time of publishing in
market
 Should implement cost management strategies
 The firm requires considering attractive marketing and
promotional activities

2.2 Methods for managing existing
performance
 Should cross check all the financial information in the
memorandum at the time of publishing in the market
 It requires following all the laws which are amended in
current year
 Must manage the costing so that able to allow customers at
the lowest charges
 Needs to ensure quality of the products and services at the
time of offering to the consumers

2.1 Requirements for the memorandum
 Company or agency information
 Unconditional Commitment of Third Party Provider to
Provide the Service
 Description of Services to Be Provided
 Scope of Services to Be Provided and by Whom
 Documentation of Services Match

2.2 Drawing articles of association for
covering expected changes
 In order to draw articles of association, there are some contents and components
included which are like:
 Name of the company
 A Finnish municipality as the company’s place of business
 The company's field of activity
 Share capital
 Nominal value and number of shares
 Number of board of directors
 Agenda of annual general meetings
 Supplementary provisions
 Accounting period followed by the firm
 Notice of general meetings of shareholders

2.3 Evaluating doctrine of ultra vires and its impacts
 A tool which is used by the firm for ensuring that how much fund is not
utilised by it at the workplace for any kind of particular objective which is not
mentioned in memorandum of association is known as doctrine of ultra vires.
 It is basically used by majorly two stakeholders of the entity which are like
creditors and shareholders. Impact of this is that shareholders and creditors
can easily know about the fund used by organisation other than specified in
memorandum.
 It makes the directors of an entity highly liable to make expenses and include
them in the memorandum of association.
 Further, it affects to the constitutions of the firm where it able to make
effectual business decisions and apply laws in legal manner.

2.4 Contents of prospectus
 Brief history of company and its main objects
 Location of the plant
 Capital structure
 Information about management of the firm
 Details about the project
 Financial and general information
 Commission, brokerage and tax exemptions
 Interest of directors
 Application and allotment

TASK 2b
Reflection
 In order to complete the task of group presentation I have contributed to
collect required information and arrange them in proper manner.
 Further, I contributed in order to make the strategies which are needed to
perform well. Apart from this, I gained knowledge about the
memorandum of association and article of association along with their
requirements.
 I can know through this project some strategies and tactics which help to
decline or eliminate business weaknesses and make it strong in the
market.
 In addition to this, I am able to increase my analytical and research skills
in proper direction. At the end, for the group formation we considered
Tuckman's theory.

REFERENCES
Contents of Prospectus of a Company. 2015. [Online]. [Available through]:
<http://www.commercepk.com/contents-of-prospectus-of-a-company/>
Braun, R. and et.al., 2013. Does charter competition foster
entrepreneurship? A difference‐in‐difference approach to European
company law reforms. JCMS: Journal of Common Market Studies.
51(3). pp. 399-415.
Malberti, C., 2015. The relationship between the Societas Unius Personae
proposal and the acquis: Creeping Toward an Abrogation of EU
Company Law?. European Company and Financial Law Review. 12(2).
pp. 238-279.
Sjåfjell, B. and Richardson, B. J. eds., 2015. Company Law and
Sustainability. Cambridge University Press.