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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) Define the term company. (2marks)

b) List and briefly explain the characteristics of a company. (6marks)

c) A promoter is a person who does the necessary preliminary work incidental to the formation of a company. Briefly explain the functions of a promoter. (4marks)

d) A Memorandum of Association is a document that relates the company to outsiders. State and briefly explain five clauses of the Memorandum of Association. (5marks)

e) The objectives of a company can be altered by a special resolution but only to the extent allowed by Section 8 of the Companies Act. Briefly explain the various kinds of alterations allowed by Section 8 of the Act. (5marks)

f) Prospectus is the window through which an investor can look into the soundness of a company’s business activities. List the matters that should be contained under general information of the prospectus. (4marks)

g) Define the following terms as used in relation to a company’s share capital;

i) Authorized capital (1mark)

ii) Issued capital (1mark)

iii) Called up capital (1mark)

iv) Paid up capital (1mark)

Question 2

a) Distinguish between winding up and dissolution of a company. (4marks)

b) List and explain three modes of winding up of a company. (6marks)

c) Explain the circumstances under which a company may be wound up in each of the modes you have listed in (b) above. (6marks)

d) As a general rule the Companies Act Cap 486 demands that a retiring auditor should be reappointed without any resolution being passed at the AGM. List the circumstances under which this reappointment may not be automatic. (4marks)

Question 3

a) Define a public company. (2marks)

b) Briefly explain the distinguishing features of a private and public company. (10marks)

c) Explain the procedure that needs to be followed to convert a private company to a public company. (4marks)

d) Distinguish between the following terms:

i) Shares and stocks (2marks)

ii) Surrender of shares and forfeiture of shares (2marks)

Question 4

a) Explain the distinctive requirements for commencement of business for:

i) Private company (2marks)

ii) Public company (2marks)

b) Explain the circumstances under which a person may become a member of a company without being its shareholder. (4marks)

c) List and explain the various modes through which a person may become a member of a company. (5marks)

d) List the various rights of a member of a company as conferred by the Companies Act, Memorandum of Association or Articles of Association. (7marks)

Buss 216:Business Law Ii Question Paper

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