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Bmgt 323: Company Law Question Paper
Bmgt 323: Company Law
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2010
INSTRUCTIONS
1. Answer ALL Questions in section A and any other THREE from section B
2. Be precise and clear in your answer
1. A company, duly registered under the Companies Act, Chapter 486 of the Laws of Kenya
has been trading in charcoal and coal, which substances and business it never included in
its objects clause in the Memorandum of Association. This has been going on since it
changed its board of directors after the first year of doing the business of selling sugar,
which it was duly incorporated to do.
Required:
(a) To explain the doctrine which is under focus in the circumstances (5 marks)
(b) To give the effect/s of the transactions before the end of the first year with regard to
Mr. X who was buying the sugar but never paid for it (3 marks)
(c) To discuss the possible consequences of the transactions done after the first year of
trading. (6 marks)
2. You have been called upon to register a public company limited by shares in the
companies’ registry in Nairobi. Advise them on the steps they need to take (11 marks)
SECTION B
3. (a) Discuss the functions of a promoter. (9 marks)
(b) Discuss in details the contents of the Memorandum of Association of a company
(6 marks)
4. (a) Chetna registered a company by the name Chetna Buttercup Limited and started her
business of manufacturing and selling Blue Band. The business did very well and Muli
got to know about it. He too started a similar business by the name Chetan Butttercup
Limited. Chetna is very upset about it because her business is dwindling. She has sued
Muli. What should the court, and subsequently Muli do? Explain. (5 Marks)
(b) Welcome To Kabarak (K) Limited is a private company that is keen to change its
articles of association. Give the company some broad analysis regarding what the law
says on this issue. (7 marks)
(d) Discuss any three types of meetings which a registered company may hold in its life
time. (3 marks)
5. A company is totally separate from the persons who form or own it. But some third year
students of Kabarak University were recently shocked to hear a court deciding that it is
keen to keen to overlook this principle and reach the individuals or persons themselves in
some instances. Discuss this departure from the norm and where possible, use case law to
explain yourself (15 marks)
6. i. Clearly distinguish between a promoter of a company and a director. (2 marks)
ii. What are the common requirements the law lays on these two kinds of persons
(4 marks)
iii. The shareholders of Rangi Tano Auto-spares Company are five. They have not
been good terms. A special general meeting was called by the secretary, and since
these members do not see eye to eye, they have separately and unawares
appointed one of them who appears to be friends to all to be a proxy. He attended
the meeting, and being a proxy to all, transacted the company’s business
successfully. The company’s registrar has refused to take some of the resolutions
members made in this meeting. Is the registrar right? Explain. (3 marks)
iv. Discuss in detail three instances when a person may become a member of a
company (3 marks)
v. Briefly discuss the types of shares which may exist in a company limited by
shares. (3 marks)
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