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Cfu 200: Company Law Question Paper

Cfu 200: Company Law

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2009

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UNIVERSITY EXAMINATIONS: 2009/2010
SECOND YEAR STAGE1 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CFU 200: COMPANY LAW (DAY&EVENING CLASS)
DATE: DECEMBER 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer Question ONE and Any other TWO Questions
QUESTION ONE
a) What are the legal consequences of registration of a company under the Companies
Act (cap 486) laws of Kenya? (8 Marks)
b) Under what circumstances may a company be deemed to be a subsidiary of another company?
(6 Marks)
c) Mr. & Mrs. Murgor intend to form a limited liability company known as M & M Hardware Ltd.
They approached you and seek your advice.
Advise them on the following issues:-
i) What is the meaning of a private company according to the Companies Act? (4 Marks)
ii) What are the advantages of forming a private company as opposed to a public
company? (4 Marks)
d) Distinguish between a company limited by shares from a company limited by guarantee.
(4 Marks)
e) What are the contents of memorandum of association as stated in the Companies Act.(4 Marks)
QUESTION TWO
Distinguish between the following classifications of debentures:
a) Bearer debentures and Registered debentures (5 Marks)
b) Redeemable debentures and irredeemable debentures (5 Marks)
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c) Unsecured debentures and secured debentures (5 Marks)
d) Debenture and Debenture stock. (5 Marks)
QUESTION THREE
a) Identify the different types of meetings that may be held by a public limited company.
(4 Marks)
b) State the rule in Sharp V. Dawes and explain the exceptions to this rule. (10 Marks)
c) (i) What is a special notice?
(ii) Give the circumstances under which a special notice would be required with respect
to company meetings. (6 Marks)
QUESTION FOUR
a) Explain the ways in which a person would:-
i) Become a member of the company. (5 Marks)
ii) Cease to be a member of a registered company . (5 Marks)
b) George, a sole trader carrying on a business in the printing industry, has asked Tumaini Bank
to advance him Shs. 500,000 /= as an addition working capital. The bank is prepared to
advance the money on condition that George offers a security. George has a share certificate for
5,000 shares issued by Mwangaza Company Ltd. George wants to know whether he can use
the shares whose value is Kshs. 650,000/= as security for the loan. He further seeks to know
whether he could still receive dividends even after he has charged the shares to the bank.
(10 Marks)
QUESTION FIVE
a) Discuss the rules relating to the appointment and disqualification of directors of a company.
(10 Marks)
b) What are the directors rights with regard to receiving remuneration and compensation for loss
of office. (6 Marks)
c) Advice the directors of the company on the ordinary business transacted at the Annual General
Meeting. (4 Marks)

Cfu 200: Company Law Question Paper

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