(a)
- This is an action instituted by a member in his name on behalf of the company to remedy a wrong done to the company.
-It is representative in character.
-Involves the violation of corporate rights. Prudential Assurance Co. Ltd V. Newman Industries Ltd.
- Right to institute a derivative action in a matter of grace.
- It is controlled by the plaintiff.
- There must be a dispute between a member (s) of the company and those in control of its affairs.
-The company must be joined as a co-defendant to enable it enforce its rights EstamcoLtd. V. Greater London Council, Spokes V. The Grosvenor and Another
marto answered the question on February 7, 2019 at 05:11
-
Outline the documents that must be delivered to the registrar of companies together
with the memorandum of association.
(Solved)
Outline the documents that must be delivered to the registrar of companies together
with the memorandum of association.
Date posted:
February 7, 2019
.
Answers (1)
-
Tama Quin Ltd., a company manufacturing pharmaceutical drugs is about to make a new issue of 400,000 shares of Sh. 40 each at the current...
(Solved)
Tama Quin Ltd., a company manufacturing pharmaceutical drugs is about to make a new issue of 400,000 shares of Sh. 40 each at the current market price of Sh. 50 each.
The prospectus states: 'The company has just patented the manufacture of a drug that cures malaria.'
Jacob White, the managing director of the company is interviewed on television and he states that the news to be released shortly will demonstrate a great break-through in the control of malaria. He also stated that the company was the only one with modern technical knowledge of this great invention. As a result there is over-subscription of the shares.
Allan, who has not read the prospectus, applied for shares and is allotted 2000 at the price of Sh. 50 each.
Betty, who read the prospectus, is not allotted any shares but buys 3000 shares at the stock exchange at Sh. 60 per share.
Charles, who read the report of the interview in the national newspaper, bought 5000 shares at the stock exchange at Sh. 55 per share.
In the meantime, the patents are found not to be original and are revoked. The shares fall in value to Sh. 10 per share.
David who owned 10,000 shares in the company long before the new issue is disappointed as he believes the publicity has caused the shares to fall in price (value).
Advise Allan, Betty, Charles and David
Date posted:
February 6, 2019
.
Answers (1)
-
(b)
(i)State the circumstances under which the objects clause of a company may
be altered.
(ii) Explain the procedure to be followed in...
(Solved)
(b)
(i)State the circumstances under which the objects clause of a company may
be altered.
(ii) Explain the procedure to be followed in altering the objects clause.
Date posted:
February 6, 2019
.
Answers (1)
-
In what way does the decision in the case of Macaura Versus Northern Assurance
Company Limited (1925) illustrate the corporate entity theory.
(Solved)
In what way does the decision in the case of Macaura Versus Northern Assurance
Company Limited (1925) illustrate the corporate entity theory.
Date posted:
February 6, 2019
.
Answers (1)
-
Mr. and Mrs. Matanguta intend to form a limited company known as M and M Hardware Limited. They approach you and seek you advice.
...
(Solved)
Mr. and Mrs. Matanguta intend to form a limited company known as M and M Hardware Limited. They approach you and seek you advice.
Advise them on the following issues:
(i) What is the meaning of a private limited company according to the Companies Act?
(ii) What are the advantages of forming a private company as opposed to a public company?
(iii) Assuming Mr. and Mrs. Matanguta wish to convert the private company into a public company, what would they be required to do?
Date posted:
February 6, 2019
.
Answers (1)
-
In relation to company meetings, explain the following:
(i) Issues that require special resolution
(Solved)
In relation to company meetings, explain the following:
(i) Issues that require special resolution
Date posted:
February 6, 2019
.
Answers (1)
-
Jane Wangokho is a minority shareholder of Tuzo Company Limited.
John Daudi is the managing director and majority shareholder of Tuzo Company Limited.
...
(Solved)
Jane Wangokho is a minority shareholder of Tuzo Company Limited.
John Daudi is the managing director and majority shareholder of Tuzo Company Limited.
Jane Wangokho has discovered that John Daudi has breached his duties as a director by purchasing goods from the company at a gross undervalue. A general meeting of the company at which John Daudi attended and voted has ratified the sale.
Advise Jane Wangokho on the courses of action she may take.
Date posted:
February 6, 2019
.
Answers (1)
-
Explain the disadvantages to a minority shareholder in bringing a derivative action.
(Solved)
Explain the disadvantages to a minority shareholder in bringing a derivative action.
Date posted:
February 6, 2019
.
Answers (1)
-
Citing decided cases, state and describe the characteristics of a derivative action.
(Solved)
Citing decided cases, state and describe the characteristics of a derivative action.
Date posted:
February 6, 2019
.
Answers (1)
-
Outline the documents that must be delivered to the registrar of companies together
with the memorandum of association.
(Solved)
Outline the documents that must be delivered to the registrar of companies together
with the memorandum of association.
Date posted:
February 6, 2019
.
Answers (1)
-
What are the contents of the memorandum of association as stated in the...
(Solved)
What are the contents of the memorandum of association as stated in the
Companies Act?
Date posted:
February 6, 2019
.
Answers (1)
-
Distinguish a company limited by shares from a company limited by guarantee.
(Solved)
Distinguish a company limited by shares from a company limited by guarantee.
Date posted:
February 6, 2019
.
Answers (1)
-
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
.
Answers (1)
-
Anna and Berita are directors of Pesa Limited and each holds forty per cent of the ordinary shares. The remainder is held by Charles.
...
(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
.
Answers (1)
-
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
.
Answers (1)
-
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
.
Answers (1)
-
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
.
Answers (1)
-
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...
(Solved)
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
.
Answers (1)
-
Explain the circumstances under which directors of a company will be held personally liable to acts committed on behalf of the company.
(Solved)
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
.
Answers (1)
-
(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
.
Answers (1)