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Company Law (D+E) Question Paper

Company Law (D+E)

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2011

UNIVERSITY EXAMINATIONS: 2010/2011
SECOND YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CFU 200: COMPANY LAW (D+E)
DATE: AUGUST 2011 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
Question One
a) Explain the restrictions imposed on the choice of name of a company (10 Marks)
b) Discuss various statutory and common law provisions under which a corporate veil of incopration may be lifted (10 Marks)
c) Explain the various ways in which persons intending to form a company
may avoid personal liability on contracts they make on behalf of the proposed company (6 Marks)
d) Discuss advantages of unlimited companies (4 Marks)
Question Two
Mr. and Mrs. MacOtiego intend to form a Limited Liability Company known as Blowdry Company
Ltd. They approach you and seek your advice. Advice them on the following issues:-
a) What is the meaning of a private limited company according to the Companies Act (6 Marks)
b) What are the advantages of forming a private company as opposed to a public company.(8 Marks)
c) Assuming that Mr.& Mrs. Macotiego wish to convert the private company into a public company what would they be required to do? (6 Marks)
Question Three
a) Explain the concept of “ capital “ as used in company law (4 Marks)
b) Distinguish between shares and stocks (6 Marks)
c) The Companies Act restricts the company from issuing shares at a discount. Identify and explain the
exceptions to such restrictions (10 Marks)
Question Four
a) Identify the different types of meetings that may be held by a Public limited company and explain the purposes each one serves (6 Marks)
b) State the rule in Sharp versus Dawes and explain the exceptions to this rule. (8 Marks)
c) What is a special notice? Give the circumstances under which a special notice would be required in
respect to Company meetings. (6 Marks)
Question Five
a) Explain the doctrine of ultra vires and state the purposes of such a doctrine (6 Marks)
b) Njoroge, Odhiambo and Makau are the directors of United Technology Ltd. The Company was
formed with the object of computer training. However due to power rationing, the company’s
business has fallen below the expected productivity and is threatened with closure. In order to keep
afloat, the three directors approached Rahisi Bank Ltd for an overdraft facility of Ksh 2,000,000/=
to establish an off-license bar and restaurant within the city centre.
The credit manager granted the loan. However, the company has run into financial difficulties and
is unable to repay the loan.
Discuss the legal position of the overdraft facility and the bank’s ability to recover the same from
United Technology Ltd. (8 Marks)
c) Discuss the exceptions to the doctrine of ultra vires (6 Marks)

Company Law (D+E) Question Paper

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