Lesson Notes By Weeks and Term - Senior Secondary 2

Company account

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Term: 3rd Term

Week: 1

Class: Senior Secondary School 2

Age: 16 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Financial accounting

Topic:-       Company account

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

  1. Define a company
  2. List types of companies
  3. List key terminologies in the formation of a company
  4. Mention the steps in the formation of a company

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on accounting ratios

Students pay attention

STEP 2

EXPLANATION

She defines a company and lists its types

 

Students pay attention and participates

STEP 3

DEMONSTRATION

She lists and explains the key terminologies in the formation of company and mentions the steps in the formation of a company

Students pay attention and participate

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

COMPANY ACCOUNT

A company can be defined as a business owned by an association of people and operated as a legal person on behalf of its owners with the motive of profit.

EXAMPLESOFCOMPANIES

  1. Cadbury Plc
  2. Nestle Plc
  3. Dangote Sugar Refinery Plc
  4. Guinness Nig. Plc
  5. Okomu Oil Palm Plc
  6. Julius Berger Nig. Plc
  7. Access Bank Plc. Etc…

 

KINDS OF COMPANIES

There are three kinds of companies which may be constituted under the Companies Act of 1968;

  1. Company Limited by Shares: these are companies in which the liability of the members is limited to amount invested in the business. In the case of liquidation, the shareholders will only be liable to the full extent of their shares contributed as capital.

 

  1. Unlimited Company: in unlimited company, the liability of a member is unlimited and may be liable to the full amount of the company’s debts in case of liquidation
  2. Company Limited by Guarantee: they are not formed with the object of engaging in trading activities.

 

FEATURES OR CHARACTERISTICS OF LIMITED LIABILITY COMPANY

  1. Objective: the major objective is to make profit.
  2. Ownership:The business is owned by shareholders;

For private companies-two to fifty,

While for Public companies- seven to infinity.

  1. Legal Entity: The business is a separate legal entity from its owners. The business is regarded as a person; it can sue or be sued in its own name.
  2. Limited Liability: The liabilities of members is limited to the amount invested in the business, in the event of liquidation.
  3. Continuity/Perpetual Existence: There is continuity of business operations into unforeseeable future. The death of a shareholder may not affect the continuous existence of the business.

 

 

TYPESOFCOMPANIES

Limited liabilities company can be divided into two;

  1. Private limited Liability Company
  2. Public Limited Liability Company.

 

 

RELEVANTTERMINOLOGIESTOTHEFORMATIONOFACOMPANY

The key terms in the formation of a company includes;

  1. Promoters
  2. Memorandum of Association
  3. Articles of Association
  4. Certificate of Incorporation
  5. Certificate of Trading
  6. Prospectus
  7. Share Capital etc.

 

 

The following steps will be considered in the formation of a Company;

 

Step1:Get the promoters. They conceived as for setting-up a business and performs various formalities required for starting up a company.

Step2: The Promoter(s) secure the services of a solicitor to prepare the documents to be filed with the registrar of companies. The documents are; memorandum of association, articles of association and statement of nominal/ registered capital.

Step3:The documents are stamped and lodged with the registrar of companies.

Step4: The registrar issues a certificate of incorporation.

EVALUATION:    1. What is a company?

  1. Mention 3 kinds of companies.
  2. Mention 2 types of company.
  3. List 4 terminologies in the formation of a company.
  4. State the steps in the formation of a company
  5. State five differences between private and public limited liability company.
  6. Write short note on the following:       

                 (a) Prospectus

                 (b) Memorandum of association

                 (c) Articles of association

                 (d) Certificate of incorporation

                 (e) Certificate of trading.

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively