IMPACT OF LEGAL PERSONALITY ON A REGISTERED COMPANY

A RESEARCH PROJECT WRITTEN IN THE DEPARTMENT OF BUSINESS ADMINISTRATION, SCHOOL OF BUSINESS STUDIES. SUBMITTED IN PARTIAL FULFILMENT FOR THE AWARD OF HIGHER NATIONAL DIPLOMA (HND) IN BUSINESS ADMINISTRATION.

NOVEMBER 2009
1

COLLEGE OF ACCOUNTANCY AND COMPUTER TECHNOLOGY BLOCK B, FLAT 8, MASOJE ESTATE. P.T.I ROAD, EFFURUN. DELTA STATE. NIGERIA.

2

CERTIFICATION

We certify that

this work was carried out by Ugorji Festus

Chukwudi in the School of Business Studies, department of Business Administration, AKWA IBOM STATE POLYTECHNIC for the award of higher national diploma in Business Administration.

__________________ (Supervisor)

________________ Centre Co-ordinator

Date __________

Date __________

3

DEDICATION

I dedicate this project to Almighty God for his divine guidance, grace and mercy throughout my academic pursuit. May all Glory, Honour, Majesty and power be ascribed unto His Holy Name in Jesus Name.

4

ACKNOWLEDGEMENT
I am most grateful to the Almighty God for giving me life, strength and courage to sail through my educational career despite all odds and obstacles. In writing this project, I am indebted to my friends, colleagues and my family for their contributions; support and

encouragement in making this project work a success. I will like to use this opportunity to express my sincere thanks to my parents, brothers and sisters, relatives, and loved ones for their prayers, moral and financial support through this program. My profound gratitude goes to my Supervisor

…………………………………..who despite his crowded schedule, sacrificed time to read through the manuscript without which this project would not have seen the light of the day. My special thanks also goes to my wife for their advice, encouragement and assistance.

5

In like manner, I wish to acknowledge the effort of all my lecturers in accounting department for their principal knowledge imparted on me during my period of study. Finally, thanks to others I cannot remember during the course of the write up, may God reward every effort of kindness and love shown during my academic pursuit.

6

ABSTRACT

A company is a legally recognized organization designed to provide goods and/or services to consumers. Businesses are predominant in capitalist economies, most being privately owned and formed to earn profit that will increase the wealth of its owners and grow the business itself. The owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for work and acceptance of risk. A corporation or body corporate is a legal person created and recognised by the law. In this sense it is an artificial legal person as opposed to individuals who are known as natural persons. The incorporation of a company has some legal effects: firstly, it creates a legal person. Secondly, that legal person has "perpetual succession", i.e., it lasts until liquidated by an order of court.

7

In this project, attempt was made to examine impact of legal personality on a registered company. The writer critically looked into the short comings/legal impacts of few business enterprises and its management set-up, which lead to the establishment of the objectives of the study which included; generating enough surplus to pay back the invested capital to the investors as early as possible. To generating surplus for — (i) Expansion, (ii) Improvement of quality, (iii) Increasing efficiency through introducing new

technology, (iii) Innovative marketing to reach the deeper layers of low-income people and disadvantaged communities and (v) Undertake research and experimentation to improve and diversify products and services. In order to arrive at a conclusive decision on the above objectives the writer carried out an empirical survey and library research from which the various data were obtained. Based on the data, two hypothesis formulated by the researcher was tested using Chi-square analysis to arrive at a better 8 conclusion. The

hypothesis

testing

was

based

on

primary

data

while

the

secondary data were further analyzed to portray the state of affairs at various periods.

9

CHAPTER ONE INTRODUCTION

1.0 THE BACKGROUND OF THE STUDY Corporate legal personality arose from the activities of organisations such as religious orders and local authorities which were granted rights by the government to hold property and sue and be sued in their own right and not to have to rely on the rights of the members behind the organisation. Over time the concept began to be applied to commercial ventures with a public interest element such as rail building ventures and colonial trading businesses. However, modern company law only began in the

midnineteenth century when a series of Companies Acts were passed which allowed ordinary individuals to form registered companies with limited liability. The way in which corporate personality and limited liability link together is best expressed by examining the key cases.

10

The incorporation of companies in Nigeria normally involve the following procedure: i) taking instruction from the promoters/ clients ii) preparing the incorporation documents iii) stamping incorporation documents iv) Filing the incorporation documents with the Corporate Affairs Commission ("CAC" or the "Commission") and obtaining the certificate of incorporation.

1.1 STATEMENT OF RESEARCH PROBLEM Corporate personality refers to the recognition by the state that certain organizations have legal personality.

Historically, this meant that organizations such as religious orders and local authorities could hold property rights and could sue and be sued in their own right, without having to rely on the rights of the members of the organization. In considering the impact of legal personality on a registered company, the questions that easily come to mind are•

What is business organization/company? 11

• What are various forms of business organizations available?

What are various sources of funds available for business organization?

• •

What is legal personality In what way can the law of the land affect a registered company?

Why is corporate personality or body corporate? What are the Consequences Effect Of Incorporation

• What are the procedures for the registering a company in Nigeria?

1.2 THE SIGNIFICANCE OF THE STUDY This research will be of great interest and benefit to the following: 1. The manager and chief executives of the company under consideration. 2. Producers, intermediaries, as well as management, organizations/firms. 12

3. The students of marketing, accounting and business administration and those reading law. 4. Likewise to aspiring businessmen and entrepreneur. 5. The diverse group of people and the dynamic marketing partners as well as the society at large. The diversified group of people above, must know how to adapt to the marketing strategies, new technologies. 6. Lawyers and other legal practitioners.

1.3 OBJECTIVE OF THE STUDY It would have been a total waste of time, efforts, energy and of course fund, in conducting this research if it was not meant to achieve any meaningful objectives the research would also have been seen as a fruitless exercise if there were no fundamental objectives to be achieved at the end of the study. The objectives of the study therefore were:

(i)

To investigate the impact of legal personality on

registered company 13

(ii)

To find out whether or not, incorporating a company in

Nigeria has any serious consequence on the promoters or company itself. (iii) To enable the researcher to avail himself of the opportunity to contribute his quota to the pool of

knowledge on the formation, conduct and management of company in Nigerian (iv) To provide an objectively sufficient ground for the researcher to make contributions to DEBATE" of corporate personality? the "GREAT

1.4 LIMITATION OF THE STUDY Research work is subject to one form of limitation or the other, mine is not an exemption. It was the initial thought of the researcher that the exercise was easy but the contrary was the case. As a student, several academic demands compete with the limited but precious time available.

14

This implies that none of the competing exercise could be effectively handled without the others being worse off. This was my situation. Although the time expended was too small to do justice to the study. The opportunity cost in terms of other equally important activities forgone or cursorily attended to, was made. The researcher faces some embarrassment arising from lowlevel educated staff of the company completing the

questionnaire who could not understand the essence of the research work as this.

1.5 HYPOTHESIS It is a conjectural statement of the relationships between two or more variables. It is testable, tentative problem explanation of the relationship between two or more variables that create a state of affairs or phenomenon. E,C, Osuola (1986 page 48) said hypothesis should always be in declarative sentence form, and they should relate to them generally or specially variable to variables. 15

HYPOTHESIS THUS: 1. 2. 3. Explain observed events in a systematic manner Predict the outcome of events and relationships Systematically summarized existing knowledge.

In essence, there exist NULL HYPOTHESIS set up only to nullify the research hypothesis and the ALTERNATIVE

HYPOTHESIS for the purpose of the study. For the efficiency of the study, the hypothesis is as follows: Null Hypothesis (HO) 1. A company can die at anytime.

2.` The property of the company is not separate from that of the member/owner.

16

Alternative Hypothesis(HI) 1. A company does not die but continue to exist until its name is dissolved through a legal process. 2. A company may own property distinct from the property of its members. 1.6 THE STRUCTURE OF THE RESEARCH WORK This research work is to be organized in five chapters as follows: 1. Introduction 2. Review of Related Literature 3. Research Methods and Producers 4. Data presentation and Analysis and 5. Findings, Summary and Conclusion

17

CHAPTER TWO

LITERATURE REVIEW

2.0 FORMATION OF COMPANIES AND BUSINESSES IN NIGERIA Capacity to Form a Company The major player in the formation of a company is the promoter; he conceives the idea and takes all necessary steps to accomplish it, and however he usually consults a solicitor for professional guidance.

Section 18 of C.A.M.A Empowers any two or more persons to form and incorporate a company as long as they comply with the requirements of the Act in respect of companies. Also, an association of more than 20 persons formed for the purpose of carrying on any business for profit or gain must be registered under the Act as accompany. The Act prohibits certain categories of

18

persons from joining in the formation of a company; namely: a) persons that are less than 18 years of age, unless there are two other persons of full age and capacity who have already subscribed to the Memorandum of Association; b) persons of unsound mind who have been so found by a court in Nigeria or elsewhere; c)any person who is an undischarged bankrupt; d) Who is disqualified under Section 254 of C.A.M.A from being a director of a company? The Act prohibits a corporate body in liquidation from joining in formation of a company. An alien or foreign company may join in forming a company provided they comply with the provisions of any enactment regulating their rights and capacity to do so.

2.1 INCORPORATION OF COMPANIES Incorporated companies can generally be examined under two heads; a) Incorporation of local companies; and 19

b) Incorporation of companies with foreign participation Incorporation of Local Companies The incorporation of local companies in Nigeria normally involve the following procedure: i) taking instruction from the promoters/ clients ii) preparing the incorporation documents iii) stamping incorporation documents iv) Filing the incorporation documents with the Corporate Affairs Commission ("CAC" or the "Commission") and obtaining the certificate of incorporation.

Taking instructions The first step a legal practitioner takes when incorporating a company is to obtain necessary information from his client regarding the company to be incorporated. For instance, he must obtain the full names, addresses and occupation of the client as well as every other person connected with the promotion of the company. After this, he is to obtain, fill and deliver to the CAC, the Availability and Reservation of the 20

Name form. Enabling him to conduct a search at the Registry of the CAC to ascertain whether or not the proposed name is available and does not fall within the prohibited and restricted names stipulated in the Act.

Prohibited Names The Act prohibits the registration of any company whose name a) is identical with that by which a company in existence is already registered or so nearly resembles such name as to be calculated to deceive; b) contains the words "Chambers of Commerce" unless it is a company limited by guarantee; c) is capable of misleading as to the true nature or extent of its activities or is undesirable, offensive, or otherwise contrary to public policy. d) would violate any existing trademark or business name unless the consent of the owner of the mark or business name has been obtained. 21

Restricted Names The Act restricts the registration of any company with the following names except with the prior consent of the Commission: a) where such name include the work "Federal", "National" , "Regional", "State", "Government", or any other name suggesting the enjoyment of government patronage; or b) where such name contains the "Municipal" or "Chartered" or connected with any municipality or local authority, or c) if the name contains the word "Co-operative" or the words "Building Society", or d) where such name contains the word "Group" or "Holding".

2.2 CORPORATE PERSONALITY AND LIMITED LIABILITY Corporate personality refers to the recognition by the state that certain organizations have legal personality. This meant that organizations such as religious orders and local

authorities could hold property rights and could sue and be sued in their own right, without having to rely on the rights 22

of the members of the organization. Over time, however, corporate personality came to be conferred on commercial ventures such as trading or companies and roadway statutory

construction

projects

parastatals

(major

corporations) in which there was a public interest. By the mid nineteenth century, the difficulty involved in obtaining a grant of corporate status from parliament forced businesses to utilise the trust instrument to form "deed of settlement" companies. These companies were extremely complex legal entities that were sometimes used as instruments of fraud. In order to remedy this, a series of mid-nineteenth century Companies Acts were passed, creating a process whereby ordinary individuals could easily form a registered company with limited liability. As a result, within a few decades, the company went from being the privileged of a few to being almost a right.

A company once incorporated becomes a separate legal entity or personality and the liability of the members are said to be limited. But there is a distinction between the two. 23

Limited liability is the logical consequence of the existence of a separate personality. But however, that just as humans can have restrictions imposed on their legal personality (for example, in the case of children) so a company can have legal personality without limited liability if that is how it is conferred by statute. A company may still be formed today, that is, as registered unlimited company without limited liability… The logic of separate personality and limited liability was not tested to its full extent until the late nineteenth century as exemplified by the case of Salomon v Salomon & Co. (1897) A C 22.

2.3

EFFECT OF INCORPORATING A COMPANY

The incorporation of a company has two legal effects: firstly, it creates a legal person. Secondly, that legal person has "perpetual succession", i.e., it lasts until liquidated by an order of court.

24

Unlike a partnership, a company is recognised as a person in law. Thus, it is legally impossible to register a lease of an office in the name of a partnership; whereas in the case of a company, the lease can be registered in the name of a company. The law treats the persons who own and control the company as separate from the company itself. For instance A, B and C set up ABC Sdn Bhd, the law considers ABC Sdn Bhd to be separate person altogether. A company is an "artificial person", as opposed to a human who is a "natural person". Most of the advantages of companies stem from their separate legal personality. Because a company is a person in its own right, the following consequences ensue:

The resultants effects of incorporation are also stated in section 16(5). The company:

is capable forthwith of performing all the functions of

an incorporated company
• •

is capable of suing and being sued has perpetual succession 25

• •

have a common seal has power to acquire, hold and dispose of property

2.4

BODY CORPORATE

A corporation or body corporate is a legal person created and recognised by the law. In this sense it is an artificial legal person as opposed to individuals who are known as natural persons. As a person, a company has:

• • •

the rights to take legal action the rights to hold property with powers and liabilities as an individual but is

distinguished from the members it may have from time to time: Salomon v Salomon & Co Ltd (1897) AC 22. 2.5 SUING AND BEING SUED

Because a company is a separate legal entity it follows that it may enforce rights by suing and conversely it may incur 26

liabilities and be sued by others. In fact the rule in Foss v Harbottle (1843) 2 Hare 461; 67 ER 189 requires the company itself to be the person enforcing the rights. Members generally cannot do this on their company’s behalf although a company may sue and be sued by its own members.

2.6

PERPETUAL SUCCESSION

A company does not die but continue to exist until its name is struck off or dissolved through a legal process known as winding up or liquidation even though without any directors, members, employees, business etc.: Re Noel Tedman Holdings Pty Ltd (1967) Qd R 561. Its members may come and go but this does not affect the legal personality of the company: Abdul Aziz Bin Atan & 87 Ors v Ladang Tengo Malay Estate Sdn Bhd (1985) 2 MLJ 165.

2.7

COMMON SEAL

27

A company is required to have a common seal: section 16 (5). At common law, a company could enter into a contract only if there was a contractual document bearing the impression of the company seal. Usually, the articles of a company provide that the seal can only be used with the authority of the board of directors: article 96, Table A. Section 35(4) alters the common law so that a person with the requisite authority can enter into a contract on behalf of a company as if it were a natural person without the company’s seal. Thus companies can enter into oral

contracts or written contracts without the common seal where the law of contract and agency allows. Some documents such as share certificates and instrument of transfer of land require the seal of the company.

2.8

POWER TO OWN PROPERTY

A company may own property distinct from the property of its members. The members only own shares in the company but do not have a proprietary interest in the property of the 28

company: Macaura v Northern Assurance Co Ltd (1925) AC 619. Therefore, a change in membership of a company will have no effect on the ownership of the company’s assets.

2.9

LIABILITY OF MEMBERS

Section 16(5) states that members of a company have such liability to contribute to the assets of the company in the winding up, as is provided by the At. The company's debts are separate from the debts of its members. For a company limited by shares the liability of members is limited to the amount, if any, unpaid on the nominal value of their shares: section 214 (1)(d).

2.10

THE COMPANY AS A SEPARATE LEGAL ENTITY

A company has a dual nature, as an association of its members but also as a person separate from its members. As soon as necessary formalities of incorporation are 29

satisfied, a new entity comes into existence which is separate and distinct from its directors and shareholders.

2.11 The

ARTICLES OF ASSOCIATION Articles of Association the embodies internal To a the rules and and it

regulations

governing of a

management large

administration

company.

extent,

complements the Memorandum of Association to explain ambiguities in the memorandum; and supplements it

(memorandum) on matters on which the memorandum is silent.

Other Incorporation Documents After the preparation of the Memorandum and Articles of Association, the legal practitioner is equally expected to prepare and deliver the following documents to C.A.C: 1) Form CAC 2.2: Notice of address of the registered office of the proposed company and head office if different from the registered office. 30

2) Forms CAC2.3 and C.O.7: A statement in the prescribed form showing the list and particulars of the first directors of the company together with their consent to be directors. 3) Form CAC2.4: A statement of the authorised share capital signed by at least one director. 4) Form C.0.1: A statutory declaration in a prescribe form of compliance with all requirements of the Act 5) Form CAC 1 (Reservation and Availability of Name). 6) Form CAC 2.5: This is the form of Return of Allotment. It is to be completed and delivered to CAC within one month of the allotment of the company’s shares. 7) Other documents required to satisfy the requirements of any law relating to the formation of company.

Stamping After the incorporated documents have been prepared, the next step is to get all the documents stamped. Stamps are printed and fixed on incorporation documents like most legal documents or instruments. 31 The stamping gives the

document the legal authority, evidential recognition and force of law.

Filing and Recognition Once the incorporation documents have been prepared and duly stamped, the legal practitioner will deliver them to the Commission for filing and registration upon payment of appropriate filing and registration fees.

Companies with Foreign Participation An alien or a foreign company may join in the formation of a company in Nigeria. However, such alien or foreign company must comply with all enactments regulating their rights and capacities to undertake or participate in trade or business in Nigeria. An alien or foreigners who intends to participate in the formation of companies or business in Nigeria must familiarize him/herself with the following laws: 1) The Nigerian Investment Promotion Commission Decree No.16 of 1995 32

2) The Foreign Exchange (Monitoring and Miscellaneous Provisions) Decree No. 17 of 1995 3) Investment and securities Act No. 45 of 1999. 4) Immigration Act Cap 171 LFN 1990. 5) Industrial Inspectorate Act 180 LFN 1990 6) National Office of Technology Acquisition and Promotion Act Cap 268 LFN 1990. 7) The Companies and Allied matters Act cap 59 LFN 1990. Every foreign company intending to carry on business in Nigeria must take all steps necessary to obtain incorporation for the company as a separate entity in Nigeria and until so incorporated; such foreign company cannot have a place of business in Nigeria. However, such a foreign company may be allowed a place of business only for receipt of notices and other documents as matters preliminary to incorporation. Also, an alien may freely invest and participate in the operation of any enterprise in Nigeria except petroleum enterprises and enterprises in the “ Negative List”. The alien may operate alone or in joint venture with a Nigerian by means of a company which must be first of all registered by the CAC and thereafter 33

registered with the Nigerian Investment Promotion Commission.

Procedure for Establishing Business between a Nigerian and an Alien a) The first step for the legal practitioner for him to prepare a joint venture agreement (where necessary) along with any other pre-occupation agreement or documents between the Nigerian and the alien. b) After registering the company with the CAC, the legal practitioner should apply to the Nigerian Investment Promotion Commission for registration of the company. c) Application is also made for business/work permits including application to the Nigerian Embassy in the country of the alien for grant of “ Business Visa”. However an alien who does not intend to establish a business in Nigeria may prefer to buy shares into Nigerian company. Such investment must be effected with foreign currency imported into Nigeria through an Authorised Dealer and converted into the naira at the Autonomous Foreign Exchange market. 34

CHAPTER THREE

RESEARCH METHODS AND PROCEDURES 3.1 RESEARCH DESIGN

35

The research method selected for the study is a combination of a survey and an industrial study. The survey research method is described hereunder that: (i) It is a design in which primary data is gathered from members population; (ii) It is a design in which a structure and systematic research instrument like a questionnaire or an interview schedule is utilized together with the primary data; (ii) It is a method in which the researcher manipulates no explanatory variables because they have already occurred and so they cannot be manipulated; (iii) Data are got directly from the subjects; The subjects give the data the natural settings of their workplaces; (iv) The answers of the respondents are assumed to be largely unaffected of the content in which they are brought; (v) The impacts of the confounding factors are “controlled” statistically; and 36 of the sample that represents a specific

(vi)

The aim of the research may span from the exploration phenomena to hypotheses testing (stone 1995). The survey research method has some merit, which are to be articulated hereunder: In the survey research method, the sample of the respondents are selected in such a way as to make it low due to the utilization of big sample sizes,

which results in generally low sample errors. The survey research method also has the merit that data collection takes place in the “natural” settings of the workplace rather than an activated laboratory. Data are got directly from the respondents. The advantage that the survey yields data that suggests new hypothesis is very illuminating. There is also the merit that a set of systematic data collection instruments such as questionnaire interview schedules and observation gadgets can either be used alone or in conjunction with other instruments (stone, 1995). 3.2 SAMPLING

37

Spiegel (1992) observes that sampling theory is a study of the relationship existing between a population or universe and the samples drawn from it. The population in this study is from the senior junior staff of the firms. In order to make conclusions of sample theory and statistical references to be valid, a sample must be selected as to be representative of the population (Spiegel,1992). One way in which a

representative sample may be got, is by the process of stratified random sampling. In this research work, the technique of simple random sampling is used to select the sample of 100 respondents from each group of the

personnel, making a total sample size of 200. The list of all senior and junior staff of the firm is from the personnel department of the company. The numbers were written on a piece of paper, put in a basket and the papers were folded to cover the numbers and one of the pieces of paper was selected at a time without replacing it and any name corresponding to the number becomes a number of the sample. This method of sampling without replacement 38

was done until the sample of 100 respondents per group of personnel was arrived at. 3.3 Population The population, in this study is the totality of the senior and junior staff of GONEL SYSTEMS LIMITED. PTI ROAD

EFFURUN. The sample size is 200 and this number of respondents was chosen from the population. The rationale for studying a sample rather than the population includes that: 1. Most empirical research work in the social science involves studying a sample in place of the population. 2. Statistical Laws reveal that statistics composed from the sample data are usually reasonably accurate. 3. Luckily, it is usually possible to estimate the level of confidence that can be placed on the results. We should note that above is only possible if the probability sample size is large enough.

3.4 DATA COLLECTION 39

Questionnaire As earlier stated, the primary data collection instrument in this study is the questionnaire. In the questionnaire method of primary data collection, heavy dependence is placed on verbal reports from the subjects to get information on the earnings per share and standard set. The questionnaire has a lot of merits. It needs less skill to administer. Questionnaire can be administered to a big number of individuals at the same time. Also with a specific research budget, it is usually possible to cover a broader area. The impersonal nature of a questionnaire, its structure and standardized wording, its order of question, its

standardized instructions for recording answers might make one to conclude that it offers some uniformity from one measurement occasion to another (Selltiz et al, 1976). Another merit of questionnaire is that subjects may have a bigger confidence in their anonymity, and thus feel freer to express views they feel might be disapproved.

40

Another attribute of the questionnaire that is sometimes, though not always desirable is that it might place less pressure on the subjects for immediate response (Selltiz et al, 1976). The questionnaire also has some demerits. It has noted that for purpose of giving dependable responses to a

questionnaire, respondents must be considerably educated. Thus one of the demerits of the usual questionnaire is that it is appropriate only for with a considerable amount of education. There is also demerit that subject may be reluctant and unable. To report on the particular subject matter. Also, if a subject misinterprets a question or give his or her answer in a batting manner, there is often a little that can be done to ameliorate the situation. In a questionnaire, the information the researcher gets is limited to the fixed alternative answer format, when a specific answer is not available, it can lead to error (Selltiz, 1976).

41

There is also limitation of memory in reporting on past facts. The researcher is not a policeman that can compel answers. That is, the information may not be readily accessible to subject and thus the subject may be reluctant to put forth enough alternative information that he or she is only barely conscious of (Selltiz et al, 1996). In this research project, a structured and undisguised questionnaire is utilized which is made up of two parts namely, the personal data section and the section on the data on the actual subject matter of the work. The questionnaire was undisguised in the sense that the purpose of the data collection which was to collect primary data for writing up the researcher’s HND project was made know to the 200 respondents. The questionnaire was structured in the sense the questions are logically sequenced and are to be asked to the respondents in the same manner and no follow up questions are to be allowed. Some of the questions are of the fixed alternative answer format type. Ten (10) of the questions have yes or no answers, 42

Ten (10) of the questions have alternative answer for the respondents to tick. The structured questionnaire has the merit that it yields data that is easier to analysis than data produced by an unstructured diminishes questionnaire. Also the structured nature

both

researcher’s

and

research

instrument

biases. It however has the demerit that the rigidity of the research instrument diminishes the amount of information that could be got. Interview The method of communication of the research instrument is by means of the personal interview. The method has the merit that it produces a better sample of the population than either mail or the telephone methods. It also has the merit that it gives a very high completion and response rates. It has the merit that the interview has a bigger sensitively misunderstandings by the respondents and gives a chance for clarification of misunderstood questions. It has the merit that it is a very feasible method (Selltiz et al, 1976). The 43

personal interview method has the demerit that it is more costly than the mail or the telephone methods of

communication of a questionnaire. Observations In addition to questionnaire and face-to face interviews, observation was also carried out. This was to enable the researcher to witness by herself the officers of this firm and to interact with these people.

3.5 FIELD WORK The researcher and three other field data collectors did the fieldwork. The field data collectors were other classmates also offering the Part-time HND program, who have also offered research methodology. They had no problem gaining entrance into the office under consideration since one of them has a friend working there. They were to be trained by the researcher on how to greet the respondents and how to tick the questionnaire correctly and honestly.

44

3.6 DESCRIPTION ANALYSIS The data

OF

DATA

PRESENTATION

AND

TOOLS presentation tools are simple bar charts,

histograms, and pictorial tables. The most important parts of a table include; (a) (b) (c) (d) (e) (f) Table numbers Title of the table Caption Stub or the designation of the rows and columns The body of the table. The head note or prefatory note or explanatory just

before the title. (g) Source note, which refers to the literally or scientific

source of the table (Mills and Walter 1995) Anyiwe (1994) has observed that a table has the following merits over a prose information that; (f) (g) A table ensure an easy location of the required figure; Comparisons are easily made utilizing a table than a

prose information; 45

(h)

Patterns or trends within the figures which cannot be

visualized in the prose information can be revealed and better depicted by a table; and A table is more concise and takes up a less space than a prose formation: The data is to be analysed by means of percentage, cross tabulation and the chi-square test of population proportions for testing the two hypothesis. Percentages express the ratio of two sets of data to a common base of 100. The researcher made us of the computer program called SPSS (statistical package for social science) to carry out the computation of the hypothesis testing.

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 INTRODUCTION 46

In

the

previous

chapter,

the

research

methods

and

procedures have been handled. In this chapter the data presentation and analysis are to be done. The data is to be presented by means of tables, two simple bar charts, one histogram and one pie chart to make it amenable for further analysis. By analysis is meant the act of noting relationship and aggregating the set of variables with similar attributes and also breaking the unit of their components (Mills and Walters 1995).

In this research work, the research accepts the contention of Podsakoff and Dalton (1995) that the factual information from the data can be used as a basis for reasoning, calculation and discussion. Apart from the heading above, the other headings in this chapter include: Data Presentation, Percentage analysis Cross-tabulated analysis 47

Hypothesis testing

4.2 DATA PRESENTATION TABLE 4.1 THE SUMMARY OF THE PERSONAL DATA OF THE RESPONDENTS

48

1

SEX Male Female Total Marital Status Married Single Total AGE 21-30 years 31-40 years 41-50 years 51-60 years Total HIGHER EDUCATIONAL QUALIFICATION DIPLOMA OND HND FIRST DEGREE SECOND DEGREE NIM TOTAL

FREQUENCY 150 50 200 130 70 200 90 90 10 10 200 Angles subtended in degree

2

3

4

10 30 80 20 40 20 200

18 54 144 36 72 36 360

The marital statuses of the 200 respondents it is found that 130 of them are married while 70 of them are single. For the

ages of the 200 respondents they are 21-30 years, 31-40 years, 40-50 years, 51-60 years with frequency of 90,10 49

respectively. For the educational qualification of the 200 respondents they are diploma, OND, HND, First Degree, Second Degree, NIM. and they have frequencies of 10, 30, 80, 20, 40 and 20 respectively. Figure 4.1 below shows the simple bar chart of the data on the sex of the respondents. FIGURE 4.1: THE SIMPLE BAR CHART OF THE DATA ON THE SEX OF THE RESPONDENTS GENDER OF THE RESPONDENTS
160140120-

Frequency

10080 60 40 20 0

Gender
MAIL FEMALE

TABLE 2.

GENDER OF THE RESPONDENTS 50

Frequency percentage Valid Cumulative Percent Percent MAIL 150 75.0 75.0 75.0 FEMALE 50 25.0 25.0 100.0 Total 200 100.0 100.0 Source: from data in table 1 (generated from SPSS) statistical package for social science. From figure 4.1 above, it is shown that male respondents have the modal frequency of 150 out of the 200 respondents while the female respondents have the frequency of 50 of them. Figure 4.2 below shows the simple bar chart of the data on the marital statuses of the respondents.

FIGURE 4.2: THE SIMPLE BAR CHART OF THE DATA ON THE MARITAL STATUSES OF THE RESPONDENTS 140
120 100 80

MARRIED SINGLE

Frequency

60 40 20 0

51

Marital status

TABLE 4.3. Status

MARITAL STATUS OF THE RESPONDENTS

frequency Percentage Valid Cumulative Percent Percent MARRIED 130 65.0 65.0 65.0 SINGLE 70 35.0 35.0 100.0 Total 200 100.0 100.0

From figure 4.2 above, it is shown that the married respondents have the modal frequency of 130 out of the 200 respondents while the single respondents have the

frequency of 70 of them.

Frequency

FIGURE 4.3: THE HISTOGRAM OF THE DATA ON THE AGES OF THE RESPONDENTS. AGES OF THE RESPONDENTS
40 60 80

100

20

52
2.0 3.0 4.0

1.0

0

Age group

TABLE 4. AGES OF THE RESPONDENTS
Categories Frequency Percentage Valid (years) Percentage 21 TO 30 31 TO 40 41 TO 50 51 TO 60 Total 90 90 10 10 200 45.0 45.0 5.0 5.0 100.0 45.0 45.0 5.0 5.0 100.0
Cumulative Percent

45.0 90.0 95.0 100.0

SOURCE: From the data in Table 1. From figure 4.3 above, it is shown that the age classes limit are 20.5-30.5 years, 30.5-40.5 years, 40.5-50.5 years and 50.5-60.5 years with frequencies of 90, 90, 10, and 10 out of 200 respectively. This shows that this is bi-modal 53

distribution as the age classes of 20.5-30.5 years and 30. 540.5 years have a frequency of 10. Figure 4.4 below shows the pie chart of the data on the highest educational qualifications of the 200 respondents. FIG.4.4 THE PIE CHART OF THE DATA ON THE HIGHEST EDUCATIONAL QUALIFICATIONS OF THE 200 RESPONDENTS

OND 5% 15% SECOND DEGREE 10% 20% 80% FIRST DEGREE 10%

DIPLOMA
FIRST DEGREE OND

HND

TABLE 4. 5 EDUCATIONAL QUALIFICATION OF THE RESPONDENTS Educational Frequency Percentage Valid Cumulative level Percentage Percentage

DIPLOMA OND HND FIRST DEGREE SECOND DEGREE NIM Total

10 30 80 20 40 20 200

5.0 15.0 40.0 10.0 20.0 54 10.0 100.0

5.0 15.0 40.0 10.0 20.0 10.0 100.0

5.0 20.0 60.0 70.0 90.0 100.0

SOURCE: from the data in table 1.

From figure 4.4 above, the Educational Qualifications are Diploma, O.N.D, First Degree, Second Degree and NIM and the subtended angles in degrees are equal to 180, 540, 1440, 360, 720 and 360 and respectively at the center of the circle.

4.3 CROSS-TABULATED ANALYSIS 55

Table bellow show the analysis of the statuses of the 200 respondents TABLE 6. CROSS- TABULATION 1
A company does not die but continue to exist until its name is dissolved through a legal process. YES NO DON’T KNOW NO ANSWER

2 7 9

Total 12

DIPLOMA OND HND FIRST DEGREE SECOND DEGREE NIM Total

6 19 60 31 21 100

2 31 10 43

2 9 11

19 91 26 31 21 200

The above table shows that the total of 100 respondents (out of 200 said YES. This proved that A company does not die but continue to exist until its name is dissolved through a legal process. TABLE 7. Cross-tabulation 2
A company may own property distinct from DON’T YES the property of its members. NO NO

39

939

DIPLOMA OND HND FIRST DEGREE SECOND DEGREE NIM

10 19 14

KNOW
47

ANSWER

Total
10 19 91

30 10

9

19 40 21 200

Total

40 21 104

40

47

9

56

The above table indicates that A company may own property distinct from the property of its members, 104 respondents out of 200 said yes. While 40 did not agree with the fact.

4.4 HYPOTHESIS TESTING In attempting to arrive at decisions about the population, on the basis of sample information, it is necessary to make assumptions or guesses about the population parameter involved. Such an assumption is called statistical hypothesis, which may or may not be true. The procedure, which enables the researcher to design on the basis, is sample regards whether a hypothesis is true or not is called test of hypothesis or test of significance. The null hypothesis asserts that there is no significant difference between the statistics and the population

parameters and what ever is observed difference is there, is merely due to fluctuations in sampling from the same population. Null hypothesis is thereby denoted by the symbol H0. Any hypothesis, which contradicts the H0, is 57

called an alternate hypothesis and is denoted by the symbol H1. The researcher used chi-square analysis.

CHI-SQUARE TEST The c is one of the simplest and most widely used nonparametric test in statistical work. It makes no assumptions about the population being sampled. The quantity c

describes the magnitude of discrepancy between theory and observation i.e. with the help of c test we can know whether a given discrepancy between theory and observation can be attributed to chance or whether it results from the

inadequacy of the theory to fit the observed facts. If c is zero, it means that the observed and expected frequencies completely coincide. The greater the value of c the greater will be the discrepancy between observed and expected frequencies. The formula for computing chi-square is – c =(O-E)2/E  Where,O=Observed frequency 58

E=Expected or theoretical frequency

4.5 SOFTWARE USED FOR DATA ANALYSIS: For the data analysis and the interpretation, the researcher has adopted advanced version of SPSS (statistical package for social science). This application software has facilitated the researcher to construct the frequency table, various types of charts and to find out the valid percentage responses from the sample. By this automated data analysis it has minimized the researcher’s time constraints and reduced human error and give also accurate outlay of information.

Chi-Square Test (1) 59

A company does not die but continue to exist until its name is dissolved through a legal process. Observed Expected Residual Decision F F 100 50.0 50.0 Accept 43 50.0 -7.0 Reject 39 18 200 50.0 50.0 -11.0 -32.0 Reject Reject

YES NO DON’T KNOW NO ANSWER Total

Chi-Square Test (2) A company may own property distinct from the property of its members. Observed Expected Residual Decision F F 104 50.0 54.0 Accept 40 50.0 -10.0 Reject 47 9 200 50.0 50.0 -3.0 -41.0 Reject Reject

YES NO DON’T KNOW NO ANSWER Total

Residuals The observed value of the dependent variable minus the value predicated by the regression equation, for each case. Large absolute values for the residuals indicate that the

60

observed values are very different from the predicted values. SOURCE: From the questionnaires administered.

The formulated hypothesis that is subject to statistical test is at 5% level of significance in testing hypothesis, the calculated value of the test statistics is usually compared with tables of value. The critical values of the test statistics serve as criterion value. It afforded the basis for rejecting the null hypothesis is a function of the value of the tested statistic. Reject the null hypothesis if the calculated value of the test statistic is greater than the critical value. Accept the null hypothesis if the calculated value of the test statistic is less than the critical value.

A company does not die TEST STATISTICSbut continue to exist until its name is dissolved through a legal process.

A company may own property distinct from the property of its members

Chi-Square df

61 73.880 3

94.120 3

note: df = degree of freedom

4.6 SUMMARY OF RESULT Level of significance……….0.05 Critical value………………………43.0 Calculated value……………………73.880 From the above analysis, it could be seen that in the first test, A company does not die but continue to exist until its name is dissolved through a legal process, the calculated value is greater than the critical value so we reject the hypothesis. In the second test which state that A company may own property distinct from the property of its members, the level of significance is 0.05, the critical value is 44 while the calculated value from the test statistics table is 94.120. Looking the data above, it shows very clear that the calculated value is greater than the critical value so we reject the hypothesis.

62

CHAPTER FIVE FINDINGS, SUMMARY AND CONCLUSION

5.0 INTRODUTIONS Having tested the research hypothesis formulated in the course of this study, the chapter is therefore intended summaries the research findings, 63 draw to on

a conclusion

them. The main focus of this study had been an examination of the relative business. 5.1 FINDINGS The statistical tests of the research hypotheses formulated in effect of legal personality on a registered

the course of this study were successfully carried out by the researcher. The researcher found that A "company" is a business organisation that is registered (or "incorporated") under the Companies Act, 1965 or its predecessor legislation. Operationally, a small company may be run in exactly the same fashion as partnership. Legally, the organisation created is subject to quite different rules. The resultants effects of incorporation are also stated in section 16(5). The company:

is capable forthwith of performing all the functions of an incorporated company

• • •

is capable of suing and being sued has perpetual succession have a common seal 64

has power to acquire, hold and dispose of property

5.2 SUMMARY Limited liability is the logical consequence of the existence of a separate personality. The legal existence of a company (corporation) means it can be responsible for its own debts. The shareholders will lose their initial investment in the company but they will not be responsible for the debts of them company. Just as humans can have restrictions imposed on their legal personality (as in the case of children) a company can have legal personality without limited liability if that is how it is conferred by the statute. 5.3 CONCLUSION The term 'person' in law, means both recognizing and acknowledging of an entity that has rights and interests. Granting of 'personhood' enables an entity to commence acts and relations that are recognized in the law. The impact for legal personality is your liability for the company's debts is limited; changes in membership do not affect the 65

company; (this is called perpetual succession); members can be employed by the company; and taxation rates are more favourable.

REFERENCES
1. Longenecker, Justin G.; Carlos W. Moore, J. William Petty, Leslie E. Palich (2008) (Casebound). Small business management : launching and growing entrepreneurial ventures. (14th ed.). Cengage Learning. pp. 768. ISBN 0324569726. OCLC 191487420. 2. Small Business and Self-Employed One-Stop Resource 3. http://www.fbswllc.com/smallbusiness.html

66

4. The Small Business Economy - A Report to the President: 2001 pg. 84 - Table A.3 (the last time data was granular enough for the figures for less than 10 employees was 1998) 5. The Small Business Economy - A Report to the President: 2008 pg. 279 - Table A.6 6. Characteristics of Small Business Employees and Owners 1997, SBA Office of Small Business Advocacy - INTRODUCTION pg. i 7. http://www.scorerochester.org/help/funding/sources.php 8. Steve Lohr, "Small-Business Forces Unite; Meeting Drafts Proposals For Carter Memories of Earlier Gatherings Small-Business Forces Unite", The New York Times, Special, Jan. 15, 1980, Business & Finance, Page D1.

67

Sign up to vote on this title
UsefulNot useful