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Law Ii Question Paper

Law Ii

Course:Cpa Part Ii

Institution: Pinnacle Business School question papers

Exam Year:2005

Answer any FIVE questions.

QUESTION ONE.

a. Citing relevant cases explain the statement " A company is a legal entity quite separate and distinct from the persons who constitute it". (10mks)

b. Explain the advantages of converting a business carried on in partnership into a company limited by shares under the Companies Act. (10mks)

QUESTION TWO

a. i. Explain whether a promoter is entitled to receive remuneration for services he has rendered. (4mks)

ii. If the answer to (i) above is negative, then explain how a promoter may receive his remuneration. (10mks)

b. Explain the circumstances under which a public company having share capital and has issued a prospectus may commence business. (6mks)

QUESTION THREE

a. Explain what is meant by a Company's Memorandum of Association. (6mks)

b. Explain the contents of or clauses which must be contained in a company's Memorandum of Association. (10mks)

c. Explain how a company may change its name. (4mks)

QUESTION FOUR

a. Outline the rights an applicant has in the case of there being fraud or misrepresentation in the prospectus when making an application of shares in a company. (4mks)

b. Explain the legal principles set out in the following cases:

i. Derny V Peek (1889) (2mks)

ii. R V Kylsant (1932) (2mks)

c. Outline the various ways in which a person may become a member of a company. (12mks)

QUESTION FIVE

a. Explain the provisions of the Companies Act safeguarding the interests of the minority in a company. (10mks)

b. Explain the conditions under which redeemable preference shares may be issued. (10mks)

QUESTION SIX

a. The articles of Wangokho Ltd., a private company contain a pre-emptive clause. Explain the meaning of the pre-emptive clause in this context and the reasons why such a provision may be used. (6mks)

b. Beatrice who is a private secretary to Anyolo steals Anyolo's certificate and forges his signature to a transfer of shares to Charles. Charles lodges the transfer for registration and later transfers the shares to Daniel. Daniel in turn becomes registered as the holder and after holding the shares for some months transfers them to Edward.

Anyolo, wondering why he has not been receiving dividends for the last year or so, checks with the company and finds to his surprise that he is no longer a member. Explain the respective rights of the parties involved. (14mks)

QUESTION SEVEN

a. Explain the consequences that will ensue once a receiver has been appointed (10mks)

b. Outline five duties of a receiver. (10mks)

QUESTION EIGHT

a. Outline the legal position and duties of a secretary in a company. (10mks)

b. Explain the various ways in which a registered company may be dissolved (wound up) by the Court. (10mks)

Law Ii Question Paper

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