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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:2013

KABARAK
UNIVERSITY
UNIVERSITY EXAMINATIONS
2012/2013 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE

BMGT 323: COMPANY LAW
DAY: FRIDAY

DATE: 16/08/2013
TIME: 2.00 – 5.00 P.M.

STREAM: Y3S2
INSTRUCTIONS:
Answer Question ONE (compulsory) and any other TWO Questions

1. Transformers Corp. plc was the holding company in a group of trading companies:
one subsidiary (Shop Ltd) operated small, city-centre supermarkets; another subsidiary
(Snack Ltd) manufactured pre-packaged sandwiches sold at petrol garages; and the
other subsidiary (Zip Ltd) manufactured zips used in clothing.
Due to his own negligence, one of the buyers for Zip Ltd, Billy, acquired a consignment
of metal for use in the manufacture of zips which caused nasty skin rashes when worn
next to the skin. Billy reported directly to a director of Zip Ltd, but that director did not
sit on the board of directors of Zip Ltd. Transformers Corp. Ltd has been sued for
damages in negligence by a woman who suffered such a skin rash.
The board of directors of Transformers Corp. had decided to sell Snack Ltd to a
competitor, Chubby Ltd. None of Snack Ltd’s directors would remain on the board of
directors after the business and all of its plant and premises were sold to Chubby Ltd.
Transformers Corp. plc did not disclose that a multi-million pound writ for damages for
negligence had been served on Snack Ltd as the result of a consignment of prawn
sandwiches which caused mild dioxin poisoning.
The leases over Shop Ltd s supermarkets all expire on 30th May 2003. Shop Ltd is to be
wound up on 25th May 2003. Transformers Corp plc wishes to renew all the leases in its
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own name.
Transformers Corp, by the service contracts of the directors, has agreed to indemnify
the directors personally against any liability occasioned during the course of their
directorships.
Advise Transformers on its various rights and liabilities. (30 marks)

2. “English courts should be more prepared to lift the veil of incorporation than they
have been in the past. Their reluctance to do so only encourages artificiality in
commercial life.” Discuss. (20 marks)

3. “Corporate governance policies have tended to show that directors still have the
effective power within companies and that it is only by non-legal means that their
power can be controlled.”
Discuss the duties and powers of directors and how they can be controlled by legal
and non-legal means. (20 marks)

4. “Information is central to company law in the modern era.” Discuss. (20 marks)

5. “The development of an understanding of corporate social responsibility is
essential to the development of a feasible and just modern form of company ”
Discuss what are the advantages or disadvantages of a Company over other form
of business. (20 marks)

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Bmgt 323: Company Law Question Paper

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