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Cpa Part Ii Section Iv Question Paper
Cpa Part Ii Section Iv
Course:
Institution: Vision Institute Of Professionals question papers
Exam Year:2010
Answer any five questions
1.Describe and discuss the significance of each of the following
i.The pre-emption rights of existing shareholders.(5 marks)
ii.The right of expropriation in the articles of a company.(5 marks)
iii.Share warrants.(6 marks)
iv.Redeemable preference shares.(4 marks)
2a).”When there are persons conducting the affairs of the company manner which appears to be constant with the articles of association ,then those dealing with them externally are not to be affected by any irregularity which may take place in the internal management of the company”as per lordHatherly in-mahony v East holyford mining company ltd(1875).Explain this statement in relation to the internal management rule in articles.(10 marks)
b)Ex plain the provisions of the companies act cap 486,governing the exercise of borrowing powers and the commencement of business for a public company limited by shares.(10 marks)
3a)What is meant by an ultra vires transaction to a company and what are the effects of such a transaction.(5 marks)
b)Muli is the managing director of wanyonge ltd.He has decided that the company should have a new factory.He arranges for walanguzi ltd to carry out the building work on the usual term contract for the building industry which requires that wanyonge ltd makes progress payment on a three monthly basis.The articles of association of wanyonge ltd provide that the directors of the company may negotiate for any contract on behalf of the company up to a value of Ksh 1,000,000.00 but contracts in excess of this sum must be approved by the company passing an ordinary resolution in a general meeting.The value of this building contract is Ksh 2,000,000.00,Misuli did not obtain the approval of the general meeting,the first progressive payment has now fallen due and other directors of wanyonge have resolved not to pay it on the ground that the contract was not properly authorized by the shareholders.You are required to explain whether wanyonge ltd is bound to pay this progress payment and more generally whether wanyonge ltd is bound to contract with walanguzi ltd.(15 marks)
4a)The objects clause in the memorandum of association of cooler ltd has a sub clause providing that each sub clause shall constitute a separate and independent object of the company,what is the purpose and effect of such a provision.(8 marks)
b)Explain the term business name and describe the relevance of the business name act cap 489.(12 marks)
b)Explain the term “business name”and describe the relevance of the business names act cap 489.(12 marks)
5.Although they may not be in the strict sense agents or trustees for the company,promoters stand in a fiduciary relation to it,Discuss by looking at the promoters relationship with the company he is forming and the remedies available for failure to discharge the fiduciary duty.(20 marks)
6a)Identify and explain the specific circumstances envisaged by the companies act for a reduction of share capital.(6 marks)
b)State and explain the exceptions to the general rule that a public company must not give financial assistance to any person for the purpose of acquisition of its shares.(10 marks)
c)What are the restrictions imposed by the companies act upon the payments of dividends out of capital and what are the excepyions.(4 marks)
7)With specific references to the facts and principles of law in Salomon v salomon & co ltd,discuss corporate identity and the occasions when it is set aside,(20 marks)
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