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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:2013

KENYA METHODIST UNIVERSITY

END OF 2''ND ''TRIMESTER 2013 (EVENING) EXAMINATION
SCHOOL : BUSINESS AND ECONOMICS
DEPARTMENT : BUSINESS ADMINISTRATION
UNIT CODE : BUSS 216
UNIT TITLE : BUSINESS LAW II

TIME: 2 HOURS

INSTRUCTIONS: Answer Question One Compulsory in Section A, and any Other TWO Questions in Section B.

SECTION A

Question One
a) Discuss the nature of statutory companies in relation to the following:-
i) Formation
ii) Shareholders
iii) Initial capital
iv) Mode of operation (4marks)
b) Describe the ways in which a public company differs from a private company. (5marks)
c) With reference to relevant legal cases, discuss the consequences of the principles of corporate personality. (12marks)
d) Discuss the circumstances that may lead to piercing the corporate viel under the following:
i) Statutory provisions. (3marks)
ii) Case laws (3marks)
e) Describe THREE reasons that may motivate a company to convert from private to public company. (3marks)

SECTION B

Question Two
a) Fred, acquired a piece of land in 2007 at Ksh. 28,000 two years later he became a company promoter and sold the land to the company at $Ksh 80,000.
i) What remedy does the company have in this case? (2marks)
ii) provide a legal justification for your answer in part (i) (2marks)
b) Before the formation of the company, Fred entered into a contract with Jane for supplying water for a period of one year. Describe the nature of this contract in relation to:-
i) Its binding nature. (4marks)
ii) Liability (4marks)
iii) Ratification. (4marks)
c) Discuss the differences between preliminary contracts and provisional contracts. (4marks)

Question Three
a) The contents of a memorandum of association are prescribe by section 5 of the companies Act.
i) Describe the importance of the memorandum to a company.
(2marks)
ii) Discuss the details of the name clause of the memorandum in relation to the following:-
1. Choice of name (4marks)
2. Change of name (6marks)
3. Publication of name (4marks)
b) Discuss the doctrine of "ultra vires" as applied in the context of company law. (4marks)

Question Four
a) Section 211 of the company act deals with the aspect of oppressing
minorities
Describe the situations when such an order can be made. (4marks)
b) Discuss the meaning of oppression. (4marks)
c) Explain the rule in FOSS vs HARBOTTLE case. (4marks)
d) Describe the purpose of the above rule. (2marks)
e) Highlight the situations that are considered exceptions to the above rule
to the above rule. (6marks)

Question Five

Discuss the details of winding up a company under the following modes:
a) By court (5marks)
b) Voluntary (10marks)

Use legal cases where applicable.

Buss 216:Business Law Ii Question Paper

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