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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:2012

KENYA METHODIST UNIVERSITY

END OF 2ND TRIMESTER 2012(DAY) EXAMINATIONS
SCHOOL : BUSINESS AND ECONOMICS
DEPARTMENT : BUSINESS ADMINISTRATION
UNIT CODE : BUSS 216
UNIT TITLE : BUSINESS LAW II

TIME: 2 HOURS

INSTRUCTIONS

Answer question one which is compulsory and any other two questions.

Question One

Explain the characteristics of a company with the aid of decided cases.

(10 Marks)

Explain five circumstances under which the veil of incorporation of a company can be lifted by the by the court.

(10 Marks)

Explain what a HOLDING Company is using relevant examples.

(5 Marks)

Discuss the effect of an ultra vives transaction in relation to a company.

(5 Marks)

Question Two

Discuss the various types of companies that the law recognizes in Kenya under CAP 486.

(10 Marks)

Mr. Lesidai has just had a registered company formed. He now wishes to ALTER the ARTICLES OF ASSOCIATION. Advise him on the rules for the alteration of the same.

(10 Marks)

Question Three

Felix Juma has just received a leter informing him of the rejection of his application for registration with remarks, "Memorandum of Association not compliant with CAP 486 laws of Kenya." Discus all the possible reasons for the rejection of the memorandum of association.

(10 Marks)

Manwako Nsilu registered a music group as a company called Lokole. He feared that the bands expensive equipment would be destroyed and so insured it under his name Manwako Nsilu. The equipment was destroyed in a fire at a concert. Would he succeed in a claim for compensation? Give reasons for your answer.

(10 Marks)

Question Four
John and his ten friends have been operating as a self help group registered by the ministry of Social Services. They are now considering being incorporated into a registered company limited by shares. Point out the differences in requirements for registering a private limited company and a public limited company. (20 Marks)

Question Five

Lydia has won one million shillings from a lottery/competition being ran by one of the national TV stations. She has decided to invest it in a small company of which Julius and Jane are the directors. However, Lydia is not sure whether to lend the money to the company secured by a debenture containing a fixed and floating change or through purchase of ordinary or preference shares.

Lydia now seeks your advice on the following:

What is the difference between ordinary and preference shares and what rights accrue to the holders of each class of shares?

(10 Marks)

(i) What is the return on ordinary and preference share capital?

(5 Marks)

(ii) What are the restrictions that may be imposed on her ability to transfer any shares she may purchase in the company? (5 Marks)

Buss 216:Business Law Ii Question Paper

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