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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:2011

SCHOOL : SCHOOL OF BUSINESS AND ECONOMICS

DEPARTMENT : BUSINESS ADMINISTRATION

TIME : 2 HOURS

INSTRUCTIONS Answer Question ONE (Compulsory) and any Other TWO Questions

Question 1

a) In the celebrated case of Salomon-Vs-Salomon & Co. Ltd (1897), Lord Halsbury L.C observed: “Either the company was a legal entity or it was not. If it was, the business belonged to it and not to Mr. Salomon. If it was not, there was no person and nothing to be an agent of at all and it is impossible to say at the same time that there is a company and there is not”. In the light of the above quotation and case, discuss the idea of separate legal personality of a company or corporation. (15marks)

b) Discuss the other fundamental characteristics of a company other than its separate legal entity. (15marks)

Question 2

Write explanatory notes on the following:

a) Contents of Memorandum of Association. (10marks)

b) Lifting of the corporate veil. (10marks)

Question 3 a) i) Who is a promoter? (2marks)

ii) Explain the legal position and fiduciary duties of a promoter in relation to the formation of a company. (13marks)

b) Outline any TEN contents of Articles of Association of a company. (5marks)

Question 4

a) Define liquidation or winding up and describe the THREE modes of winding up a company. (10marks)

b) Explain the distinctions between a Memorandum and Articles of Association. (10marks)

Question 5

a) State and explain the ways by which a person may acquire and cease to be a member of a company as envisaged by the Companies Act (Cap 486). (14marks)

b) Explain the rule in Foss-Vs-Harbottle (1843) (6marks)

Buss 216:Business Law Ii Question Paper

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