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Company Law Question Paper

Company Law

Course:Cpa Part Ii

Institution: Star College Of Management Studies question papers

Exam Year:2009

Company law, august 2009.
Answer any FIVE questions.

QUESTION ONE

a. Distinguish between a company and a co-operative society (8mks)

b. Citing relevance decided cases, explain the circumstances under which a court would lift the veil of incorporation (12mks)

QUESTION TWO

a. Kimoli and Anjere wish to venture into business. However, they are not sure of weather to trade as a partnership or a private limited company and seek your advice.

Advise them on the disadvantages of trading as a private limited company (12mks)

b. Highlight the legal consequences of incorporation of a company (8mks)

QUESTION THREE

a. " A company's shares can be issued at a discount, premium or per value".

Discuss this statement (12mks)

b. Explain the provisions which govern the issue of shares of a company for purposes other than raising capital (8mks)

QUESTION FOUR

With reference to company law, discuss the provisions which govern the removal of a director from the office before expiry of his tenure (20mks)

QUESTION FIVE

a. Explain the reasons why a company would resort to a takeover, merger or a reconstruction (10mks)

b. Highlight the advantages of instituting a scheme of arrangement (10mks)

QUESTION SIX

a. In relation to the law of relating to meetings under company law, discuss the rules which govern the following:

(i) Voting by proxy (4mks)

(ii) Revocation of the authority of a proxy (6mks)

b. Explain the rights of an auditor of a company (10mks)

QUESTION SEVEN

A public company in the mining business made an issue of its shares to the public at sh. 10 per share.

In the prospectus, the company stated that " the company has discovered a booming market in the European Union member countries for its minerals"

The company had never marketed its minerals in the European Union member countries. Timothy, without reading the prospectus applied for shares and has allotted 1,000 shares at sh. 10 each.

Mary read the prospectus, applied for the shares but was not alloted the any shares. Later on, Mary bought 2,000 shares at the stock exchange at sh. 25 each.

Peter, an old shareholder in the company owned 500 shares even before the company made the new issue. He is disappointed with the price at which the new offer for sale was made claiming that this had destabilised the price of the company's shares.

Required:

a. Explain the legal principles applicable in the above case an advise Timothy, Peter and Mary. (12mks)

b. Timothy prepared a transfer form to transfer 100 shares only to his wife Rose and presented the form to the company. The company erroneously transferred the entire 1000 shares to Timothy's wife.

Timothy is aggrieved and seeks your legal advice.

Discuss the legal principles in the case and advise Timothy. (8mks)

Company Law Question Paper

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