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Chairperson Sean Byrne and Managing Director Rory Brennan of Kilbay Ltd met to plan for a Board of Directors meeting - Leaving Cert Business - Question 5 - 2009
Question 5
Chairperson Sean Byrne and Managing Director Rory Brennan of Kilbay Ltd met to plan for a Board of Directors meeting. They discussed the downturn in the economy, the... show full transcript
Worked Solution & Example Answer:Chairperson Sean Byrne and Managing Director Rory Brennan of Kilbay Ltd met to plan for a Board of Directors meeting - Leaving Cert Business - Question 5 - 2009
Step 1
Kilbay Ltd has limited liability. Explain the term 'limited liability'.
Answer
Limited liability refers to the legal structure that protects the personal assets of shareholders in a company. If Kilbay Ltd were to fail, shareholders would only lose the amount they had invested in the company, and would not have to contribute further to settle any debts. This means they cannot be compelled to use personal resources to pay off business liabilities, ensuring that personal finances remain insulated from the company's financial obligations.
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:
Sean Byrne Managing Director
Rory Brennan Secretary
Step 3
Explain the term 'minutes' of a meeting.
Answer
Minutes are the official written record of a meeting. They are usually prepared by the secretary and include details such as those present, absentees, decisions made, and matters discussed. The minutes serve as a reference for future meetings and can help track actions agreed upon and ensure accountability among board members.
Step 4
Outline two advantages of meetings as a method of communication.
Answer
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Exchanging Information: Meetings allow participants to share information and ideas in real-time, facilitating immediate feedback and discussion, which can enhance understanding and collaboration.
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Problem Solving: Meetings provide a platform for addressing issues collaboratively. Participants can present their perspectives, brainstorm solutions, and collectively reach decisions more efficiently compared to written communication.
Step 5
Name two long-term sources of finance and explain one of them.
Answer
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Long-term loan / debenture: This source involves borrowing funds for an extended period, typically five years or more. It could be secured against company assets, which provides a layer of security for the lender. These loans usually carry interest and require regular repayments.
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Equity financing: This involves raising capital by selling shares to shareholders who become part owners of the company. Unlike loans, there are no repayment obligations, but shareholders expect dividends and a return on their investment through capital appreciation.