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Monday, 13 June 2011

Write a note on Managing Agents

Managing Agents :-
To look after the business of a company managing agents are appointed. According to the company ordinance a company is not authorized to appoint the managing agent. If the company is controlled by the Federal Government is restriction is not there.

Importance of Managing Agent

1. Management :-
The managing agents plays very effective role in settling the affairs of the company.

2. Solve the finance problem :-
The managing agent are also very useful for promoting the finance of the company. The major portion of the capital is raised through the personal efforts of the managing agents.

3. Credit for the company :-
They attract the funds in the form of debentures. They supply the fixed and working capital.

4. Duty of underwriting :-
The managing agents also perform the functions of underwriters and furnish, the necessary capital by using available resources.

Disadvantages of Managing Agent

1. Too much dependence on managing agent :-
There is too much dependence on the managing agents for the finance, it creates many problems.

2. Speculation :-
There is also speculation in shares of the company on a large scale.

3. Malpractices :-
There is a financial domination of the managing agents on the company which leads to malpractices.

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