- Reduction of number of members
- Under section 33 of the Companies Act, if at any time, the number of members of a company falls below the statutory minimum and the company continues to carry on business for more than 6 months while the number is so reduced all persons who are members after the 6 months and who are aware that the company has less than 2 or 7 members are personally liable for all the debts of the company incurred after the 6 months and may be sued for them.
- Non-publication or mis description of the company's name
Under section 109 (4) of the companies Act a member who is an officer of the company may be held liable to make good any liability arising if he signed or authorized the signing of a negotiable instrument on which the company?s name is not published or is mis described.
-Fraudulent trading
- Under section 323 (1) of the Companies Act if in the course of winding up it appears that any business of the company has been carried on:
- For any fraudulent purpose or
marto answered the question on February 7, 2019 at 05:40
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(a) Joe owns 2000 shares in Lotto Limited and 1000 shares in Jolles Ltd. He sells all his shares in Lotto Limited to Janet and...
(Solved)
(a) Joe owns 2000 shares in Lotto Limited and 1000 shares in Jolles Ltd. He sells all his shares in Lotto Limited to Janet and 500 shares in Jolles Ltd. to Jeremy. All the shares in Lotto Limited are partly paid up. Six months later, Lotto limited goes into liquidation.
(i) In the absence of any express agreement, discuss the liability of Joe and Janet in relation to the company's debts.
(ii) State the steps to be taken to register the transfer of shareholding from Joe and Jeremy.
(b) Outline the exceptional cases when a member may be held liable in excess of the limited liability which he undertook when he became a member of the company
Date posted:
February 7, 2019
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Answers (1)
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(i)State the circumstances under which the objects clause of a company may
be altered
(ii) Explain the procedure to be followed in altering...
(Solved)
(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 7, 2019
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Answers (1)
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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 7, 2019
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Answers (1)
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Describe the meaning and essence of an application for early dissolution.
(Solved)
Describe the meaning and essence of an application for early dissolution.
Date posted:
February 7, 2019
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Answers (1)
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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 7, 2019
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Answers (1)
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(i)Citing decided cases, state and describe the characteristics of a 'derivative action.'
(ii) Explain the disadvantages to a minority shareholder in bringing a derivative...
(Solved)
(i)Citing decided cases, state and describe the characteristics of a 'derivative action.'
(ii) Explain the disadvantages to a minority shareholder in bringing a derivative action.
Date posted:
February 7, 2019
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Answers (1)
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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)
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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
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Answers (1)
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(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)
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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
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Answers (1)
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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)
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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)
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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
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Answers (1)
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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.
...
(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)