(a)
Under section 4 (2) (a) of the Companies Act, a company limited by shares means that a member thereof can only be called upon to contribute to the assets of the company the amount if any outstanding on his shares beyond which he is not liable.
Under section 4 (2) (b) of the Companies Act, company limited by guarantee means that a member can only be called upon to contribute to the assets of the company the amount he undertook to contribute, if the company was wound up during his membership or within 1 year of cessation of membership, beyond which he is not liable.
marto answered the question on February 6, 2019 at 10:55
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Distinguish between the following classifications and debentures:
(a) Bearer debentures and registered debentures.
(b) Redeemable debentures and irredeemable debentures.
(c) Debentures and debenture...
(Solved)
Distinguish between the following classifications and debentures:
(a) Bearer debentures and registered debentures.
(b) Redeemable debentures and irredeemable debentures.
(c) Debentures and debenture stock
(d) Unsecured debentures and secured debentures
Date posted:
February 6, 2019
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Answers (1)
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Anna and Berita are directors of Pesa Limited and each holds forty per cent of the ordinary shares. The remainder is held by Charles.
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(Solved)
Anna and Berita are directors of Pesa Limited and each holds forty per cent of the ordinary shares. The remainder is held by Charles.
In addition to the shares, Anna also holds debentures issued by Pesa Limited, redeemable on 8 August 2003. Anna wishes to dispose of her shares and debentures.
On the other hand, Berita and Charles do not wish Anna's substantial interest in the company to pass to other people upon the sale of the shares and debentures.
Advise Pesa Limited on the legality of each of the courses of action listed below:
(a) Pesa Limited will raise the necessary funds and purchase the shares and debentures.
(b) Pesa Limited will raise funds and lend them to Charles so that he may purchase Anna's debentures. Charles will also arrange for a private loan guaranteed by Pesa Limited so that he may purchase Anna‟s shares.
(c) A new company, Pendo Limited, will be formed and eighty per cent of its ordinary shares will be held by Pesa Limited. Berita and Charles to hold ten per cent each. Pendo limited will borrow money to buy Anna's shares and debentures
Date posted:
February 6, 2019
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Answers (1)
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Martha is engaged in the promotion of a company. She seeks your advice on several matters relating to the promotion of a company. You are...
(Solved)
Martha is engaged in the promotion of a company. She seeks your advice on several matters relating to the promotion of a company. You are required to advise her on the following matters:
(a) The restrictions upon the choice of a corporate name with which a promoter must
comply.
(b) The legal duties of a promoter with regard to her responsibility where she sells her
own property to the company she is promoting.
(c) The promoter's right to payment for her services by the company after
incorporation.
Date posted:
February 6, 2019
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Answers (1)
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Section 213 of the Companies Act qualifies the liability of past and present members as contributors. Explain these qualifications as provided for in the...
(Solved)
Section 213 of the Companies Act qualifies the liability of past and present members as contributors. Explain these qualifications as provided for in the Companies Act.
Date posted:
February 6, 2019
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Answers (1)
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Enumerate the circumstances under which the court may order the winding up of a company on a just and equitable ground.
(Solved)
Enumerate the circumstances under which the court may order the winding up of a company on a just and equitable ground.
Date posted:
February 6, 2019
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Answers (1)
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Rush, Fast and Speed are directors of Modern Technology Company Ltd. The company was formed with the main object of computer training. However, due to...
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Rush, Fast and Speed are directors of Modern Technology Company Ltd. The company was formed with the main object of computer training. However, due to the power rationing, the company business has fallen below the expected productivity and is threatened with closure. In order to keep afloat, the three directors approached Money Bank Ltd for an overdraft of Sh. 2 million to establish an off-licence bar and restaurant within the city centre. The credit manager asked the company to provide its copy of the memorandum of association and the company complied. Modern Technology was then given the overdraft. However, it has run into financial difficulties and is unable to repay the loan.
Can the bank successfully sue for recovery of the loan?
Date posted:
February 6, 2019
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Answers (1)
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Explain the circumstances under which directors of a company will be held personally liable to acts committed on behalf of the company.
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Explain the circumstances under which directors of a company will be held personally liable to acts committed on behalf of the company.
Date posted:
February 6, 2019
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Answers (1)
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(i)What is a special notice?
(ii) Give the circumstances under which a special notice would be required with respect to company meetings.
(Solved)
(i)What is a special notice?
(ii) Give the circumstances under which a special notice would be required with respect to company meetings.
Date posted:
February 6, 2019
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Answers (1)
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State the Rule in Sharp-vs-Dawes and explain the exceptions to this rule?
(Solved)
State the Rule in Sharp-vs-Dawes and explain the exceptions to this rule?
Date posted:
February 6, 2019
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Answers (1)
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Identify the different types of meetings that may be held by police limited companies.
(Solved)
Identify the different types of meetings that may be held by police limited companies
Date posted:
February 6, 2019
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Answers (1)
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What happens to a floating charge when it crystallizes?
(Solved)
What happens to a floating charge when it crystallizes?
Date posted:
February 6, 2019
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Answers (1)
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A part from the appointment of a receiver, four other events will cause a floating charge to crystallize. Describe these four events.
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A part from the appointment of a receiver, four other events will cause a floating charge to crystallize. Describe these four events.
Date posted:
February 6, 2019
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Answers (1)
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a)Explain the proprietary rights of a member in a company.
(b) Rita applied for 2,000 shares in Bidii Yako Company Ltd. following her application, no...
(Solved)
a)Explain the proprietary rights of a member in a company.
(b) Rita applied for 2,000 shares in Bidii Yako Company Ltd. following her application, no allotment at the time was made. Later on without her application, 2,000 shares were transferred to her and her name placed in the register of members.
Rita knowing that her name was in the register of members took no steps to have it rectified. Later on, the company collapsed. Rita was called upon to pay up on her shares and she has declined to do so arguing that she was not a member of Bidii Yako Company Ltd. She seeks your advice on the matter. Advise Rita
Date posted:
February 6, 2019
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Answers (1)
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a) Outline the information that is required when registering a charge.
b) In July 2001, Muungano Ltd obtained an overdraft from a bank upon...
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a) Outline the information that is required when registering a charge.
b) In July 2001, Muungano Ltd obtained an overdraft from a bank upon deposit of title deeds and the execution of a memorandum of charge the memorandum was executed in due form by the company but left undated. The overdraft continued and subsequently the manager of the bank filled in the date as 10th January 2002. The memorandum was then registered with the registrar of company‟s on 31st January 2002 and the registrars certificate to that effect was duly issued.
Discuss the validity of the charge
Date posted:
February 6, 2019
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Answers (1)
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Triple H, Undertaker Austin and Flair are directors of Mieleka Ltd a company regulated by Table A. Fair is the managing director and undertaker...
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Triple H, Undertaker Austin and Flair are directors of Mieleka Ltd a company regulated by Table A. Fair is the managing director and undertaker is the chairperson of the company. Sometime ago the directors meeting as a board decided to:
i) Lend Triple H Shs.500,000 to purchase a car for his wife Stephane for her personal use;
ii) Advance Shs.500,000 to Austin to cover his expenses on a worldwide (promotional tour on behalf of the company).
Booker T, the company secretary informs you that Stone Cold a shareholder claims that this transaction should have been approved by the members and that he intends to raise the matter during the next general meeting.
Required
i) Advise Booker T which of the transactions need approval by the members in general meeting
ii) What are the consequences of the necessary approval not being obtained?
Date posted:
February 6, 2019
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Answers (1)
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Discuss the rules relating to appointment and vacation of office of directors.
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Discuss the rules relating to appointment and vacation of office of directors .
Date posted:
February 6, 2019
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Answers (1)
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Outline the various matters that require to be sanctioned by members through a special
resolution.
(Solved)
Outline the various matters that require to be sanctioned by members through a special
resolution.
Date posted:
February 6, 2019
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Answers (1)
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a)State the circumstances under which a company would be required to maintain an index
of the register of members
b) Kazi Bure borrowed...
(Solved)
a)State the circumstances under which a company would be required to maintain an index
of the register of members
b) Kazi Bure borrowed Shs.50,000 from Tumaini Bank and deposited his XYZ Supermarket Ltd‟s share certificate with a blank transfer as a security. Subsequently he bought goods from the supermarket on credit. The goods were worth Shs.15,000. The articles of association of XYZ Supermarket Ltd claimed a first and paramount lien on its members shares on debts due to the supermarket. However, before the supermarket lien arose the bank gave the supermarket notice of Kazi Bure's share certificate having been lodged with the bank as a security for the loan. Kazi Bure is unable to pay for the goods he obtained from the supermarket and has also defaulted on the loan. XYZ Supermarket Ltd wants to exercise its lien and the bank wants to exercise its equitable right to have the shares transferred to into its name.
In this situation discuss the rights of
i) The Bank
ii) XYZ Supermarket Ltd
c) Bob and Babs jointly own shares in Powerfoam Ltd. They are seeking your advice
regarding their legal position as joint holders of the shares. Advice them
Date posted:
February 6, 2019
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Answers (1)
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The capital of may no doubt be diminished by the expenditure upon and reasonably incidental to all the objects specified. A part of it may...
(Solved)
The capital of may no doubt be diminished by the expenditure upon and reasonably incidental to all the objects specified. A part of it may be lost in carrying on the business operations authorized. Of this, all persons trusting the company are aware and take the risk. But creditors have the right to rely and were intended by the legislature to have the right to rely on the capital remaining undistributed by any expenditure outside these limits or by the return of nay of it to the shareholders.
Per Lord Herchell L.J. in Trevor v Whitworth (1837) 12 App. Cap 409 at 415.
a)Discuss this statement outlining the circumstances and conditions under which companies may reduce their capital.
b) State what is meant by underwriting commission and distinguish it from brokerage
Date posted:
February 6, 2019
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Answers (1)
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a) James and Shem proposed to form a company by the name 'Micromine Limited'. On behalf of the proposed company, Shem entered into contracts to...
(Solved)
a) James and Shem proposed to form a company by the name 'Micromine Limited'. On behalf of the proposed company, Shem entered into contracts to purchase office furniture and stationery.
Required:
i) What are the company's rights and liabilities under such contracts after incorporation?
ii) What provisions for the protection of Shem are found in such contracts?
Date posted:
February 6, 2019
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Answers (1)