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Buss 216:Business Law Ii Question Paper

Buss 216:Business Law Ii

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2010

FACULTY : BUSINESS AND MANAGEMENT STUDIES

DEPARTMENT : BUSINESS ADMINISTRATION

TIME : 2 HOURS

INSTRUCTIONS Answer Question ONE and any Other TWO Questions

Question 1

a) The certificate of incorporation issued by the Registrar of companies is conclusive proof that the company has come into existence which bestows upon the company many distinctive characteristics, citing derived cases or practical examples where necessary discuss the characteristics of incorporated companies. (10marks)

b) David wishes to start a business but he does not know the best form of business entity he should establish. David has a lot a business acumen he can easily access finances and is a good organizer. He has come to you for advice. Advise David on the two most appropriate types of business entities that exist, indicating the advantages and disadvantages of public limited company. (10marks)

c) “Promoters of a company are not agents of the company until it is incorporated when they could be agents”. Anonymous. Discuss the statement clearly stating the promoters position in respect to the pre- incorporation contracts (cite case law) (10marks)

Question 2

a) The general rule is that majority decides and controls the company. In connection with statement explain the rule in FOSS VS HARBOTTLE, indicating the advantages and exceptions of the rule. (10marks)

b) Describe the rule in Turquand and its exceptions (5marks)

c) State the various charges that must be delivered to the Registrar for registration. (5marks)

Question 3

Write explanatory notes on any four of the following:

a) Qualification shares of a director of a company (5marks)

b) The golden rule in framing the prospectus (5marks)

c) Person who may petition the court for compulsory writing up of a company (5marks)

d) Matters requiring resolution with special notice to be passed. (5marks)

e) Ordinary business of company annual general meeting (5marks)

Question 4

a) State four matters where a special notice is required for a valid resolution to be passed. (4marks) b) What is company substratum and when is the substratum said to have failed? (8marks)

c) The directors manage a company. Members as members do not have management powers. However there are a number of situations where the members can exercise certain rights that border on controlling the directors actions. Discuss any four situations when members may be said to control director`s actions. (8marks)

Question 5

a) Highlight the main differences between memorandum of association and articles of association. (8marks)

b) What particulars may be contained in the annual return of every company registered under the Companies act, cap 486? (6marks)

c) Outline the main differences between a share and stock. (6marks)

Buss 216:Business Law Ii Question Paper

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