Get premium membership and access revision papers, questions with answers as well as video lessons.

Cfu 200 Company Law-Day &Amp; Evening Question Paper

Cfu 200 Company Law-Day &Amp; Evening

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2011

1
UNIVERSITY EXAMINATIONS: 2010/2011
SECOND YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CFU 200 COMPANY LAW-Day & Evening
DATE: DECEMBER 2011 TIME: 2 HOURS
INSTRUCTIONS: Answer Question One and Any Other Two Questions
Question One
a) Distinguish between a company limited by shares from a company limited by a guarantee.
(5Marks)
b) Explain the doctrine of ultra vires with regard to the objects of the company. (8Marks)
c) Identify the clauses contained in the memorandum of association (6Marks)
d) State what is meant by underwriting commission and distinguish it from brokerage.
(5Marks)
e) Explain the proprietary rights of a member in a company. (6Marks)
Question Two
a) Discuss the fiduciary duties of directors (10Marks)
b) Mwerevu is one of the directors of Kamaliza Ltd whose Articles of Association are in the
form of Table A. He knows that his fellow directors are interested in obtaining motor
vehicles from Modern vehicles Ltd, to increase the company’s fleet of trucks, Mwerevu
purchases controlling shares in mordern vehicles Ltd.
Mordern vehicles Ltd then sells the trucks to Kamaliza Ltd at Kshs 100,000 per vehicle,
over and above the true market price.Mwerevu voted at board meeting of Kamaliza Ltd
which decided on the purchase price without disclosing that he controlled the vendor
company. When the true facts are discovered the company’s board of directors does not
2
protest against Mwerevu’s conduct. Mpole a minority shareholder is aggrieved. Advise
him (10Marks)
Question Three
a) John Tumbo recently attended a court session during which he heard a counsel asking a key
witness about Articles of Association. John Tumbo does not understand the meaning of
Articles of Association. Explain to him
i. The meaning and characteristics of the Articles of Association (5 Marks )
ii. The legal significance and effect of Article of Association. (5 Marks )
b) i Discuss the distinctions between a partnership and a private limited company (5 Marks)
ii Discuss the legal principles that govern the following classes of persons in relation to
membership of a company:-
i. A minor
ii. A bankrupt (5Marks)
Question Four
a) Eundeka Ltd was in corporated twelve months ago. The directors are not sure how to
proceed with the operations of the company. Advise the directors on the following matters.
i. The appointment and duties of a company secretary (6 Marks )
ii. Holding of an annual general meeting (4 Marks )
b) Compare and contrast ordinary and preference shares (10 Marks)
Question Five
a) Discuss the provision of the Companies Act regarding the appointment of an Auditor
(5 Marks )
b) How may an Auditor be removed from office before the expiry of his period (5Marks)
c) What powers are accorded the Auditor to enable him to perform his duties in the company
(10Marks )

Cfu 200 Company Law-Day &Amp; Evening Question Paper

More Question Papers

Popular Exams