ExpertACCA · Question 52 · The formation and constitution of business organisations
Scenario: 'Urban Canopy Initiatives', a community group, wants to form a corporate entity to buy land for rooftop forests. They want limited liability to protect their members, but they do not want to issue shares, and any surplus income will be reinvested into the community rather than distributed as profit. Before incorporation, founder Elena signs a contract for a crane in the name of 'Urban Canopy Initiatives Ltd'.
Question: Which corporate structure is most appropriate for Urban Canopy Initiatives?
Scenario: 'Urban Canopy Initiatives', a community group, wants to form a corporate entity to buy land for rooftop forests. They want limited liability to protect their members, but they do not want to issue shares, and any surplus income will be reinvested into the community rather than distributed as profit. Before incorporation, founder Elena signs a contract for a crane in the name of 'Urban Canopy Initiatives Ltd'.
Question: Which corporate structure is most appropriate for Urban Canopy Initiatives?
Answer options:
A private company limited by shares.
A private company limited by guarantee.
An unlimited company.
A general partnership.
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