(i) This problem is based on allotment of shares. In this case Sarah had applied for 4000 shares but ABC Co. Ltd. allotted her 2000 only. Can Sarah sue the company? The answer to this question is emphatically no for the following reasons:
-Sarah's application for shares was an offer to the company which it was not bound to accept but accepted by allotting her 2000 shares. If the allotment
letter was posted, the contract was concluded on postage (Household Five Insurance Co. Ltd. V. Grant).
- Company prospectuses always provide that the company is not bound to allot the quantum of shares applied for. Since ABC Co. Ltd. is a public company there must have been a prospectus inviting prospective investors to apply for the shares.
- Since an allotment is an appropriation of a number of shares Sarah is bound to take up the number allotted to her.
- My advice to Sarah is to take up the shares allotted and drop the threat to sue the company. In any event she can always dispose them off.
marto answered the question on February 7, 2019 at 07:54
-
With regard to investor protection, explain the meaning of inside information
(Solved)
With regard to investor protection, explain the meaning of inside information.
Date posted:
February 7, 2019
.
Answers (1)
-
Explain to a new shareholder of a central depository account the circumstances in which a central depository securities account may be suspended.
(Solved)
Explain to a new shareholder of a central depository account the circumstances in which a central depository securities account may be suspended.
Date posted:
February 7, 2019
.
Answers (1)
-
Abel and Boaz have been carrying out business as a partnership.
They have both been employed on full time basis in the business and have...
(Solved)
Abel and Boaz have been carrying out business as a partnership. They have both been employed on full time basis in the business and have shared profits and losses equally. Abel wished to bring his son David into the business and Boaz accepts the proposal.
They wish to convert the partnership into a private limited company, ABD Company Ltd., in which Abel and Boaz will each hold 40 percent of the shares and David will hold 20 per cent. All the three shareholders will be directors of the new private company.
(a) Advise the three shareholders of ABD Company Ltd. on the documents which they
are required to submit to the registrar of companies for approval in connection with the formation of the private company.
(b) After ABD Company Ltd. was formed, there arose a disagreement between Boaz and David regarding the day-to-day management of the business. Abel and David decided to remove Boaz from the board of directors.
Date posted:
February 7, 2019
.
Answers (1)
-
In pursuit of good corporate governance practices by directors, enumerate the best practices relating to directors which would promote and protect the shareholders rights.
(Solved)
In pursuit of good corporate governance practices by directors, enumerate the best practices relating to directors which would promote and protect the shareholders rights.
Date posted:
February 7, 2019
.
Answers (1)
-
Outline the reasons that may lead to suspension of promoters by a company.
(Solved)
Outline the reasons that may lead to suspension of promoters by a company.
Date posted:
February 7, 2019
.
Answers (1)
-
Explain the preliminaries incidental to promotion of a company.
(Solved)
Explain the preliminaries incidental to promotion of a company.
Date posted:
February 7, 2019
.
Answers (1)
-
The law requires that certain statutory books must be kept in the registered offices of the company.
Explain the contents and matters...
(Solved)
The law requires that certain statutory books must be kept in the registered offices of the company.
Explain the contents and matters relating to inspection of the following statutory books:
(a) Register of members.
(b) Register of directors and secretaries.
(c) Register of directors' interests.
(d) Register of charges.
Date posted:
February 7, 2019
.
Answers (1)
-
Ropoff Company Ltd., a private limited company, has been under inquiry on alleged fraudulent financial transactions. The officers of the company under suspicion have denied...
(Solved)
Ropoff Company Ltd., a private limited company, has been under inquiry on alleged fraudulent financial transactions. The officers of the company under suspicion have denied any association with the company.
At the inquiry it was suggested that the corporate veil be lifted and the realities of the company in question be looked into.
Explain the instances when the veil of incorporation may be lifted
Date posted:
February 7, 2019
.
Answers (1)
-
The principle of corporate legal personality is an important and fundamental aspect of company law.
Discuss this statement citing relevant decided cases.
(Solved)
-The principle of corporate legal personality is an important and fundamental aspect of company law.
Discuss this statement citing relevant decided cases.
Date posted:
February 7, 2019
.
Answers (1)
-
Explain the effect of the failure by the company to register a charge of a debenture.
(Solved)
Explain the effect of the failure by the company to register a charge of a debenture.
Date posted:
February 7, 2019
.
Answers (1)
-
Give reasons why a company may seek to control the funds from which dividends are paid.
(Solved)
Give reasons why a company may seek to control the funds from which dividends are paid.
Date posted:
February 7, 2019
.
Answers (1)
-
Explain the circumstances when a dividend may become payable and enforceable as a debt against the company.
(Solved)
Explain the circumstances when a dividend may become payable and enforceable as a debt against the company.
Date posted:
February 7, 2019
.
Answers (1)
-
(a) Explain the category of persons to whom an auditor owes a duty of care in the preparation of his audit report.
...
(Solved)
(a) Explain the category of persons to whom an auditor owes a duty of care in the preparation of his audit report.
(b) Enumerate the rights accorded to an auditor to enable him perform his duties as the auditor of a company.
(c) In Hedley Byrne V. Heller (1964) the court held that provided that it could be established that a special relationship existed between parties it was possible for a person to sue for having suffered a financial loss even though no contractual relationship existed between the parties.
Highlight the factors that should be established in order for a third party to successfully sue an auditor for professional negligence.
Date posted:
February 7, 2019
.
Answers (1)
-
(a) Outline the qualified minority rights of a member which can only be enforced by the joint efforts of a membership group as defined under...
(Solved)
(a) Outline the qualified minority rights of a member which can only be enforced by the joint efforts of a membership group as defined under the Companies Act.
(b) The Articles of X Company Ltd provide that every member is entitled to one vote for each of the first ten shares and thereafter to one vote for each additional ten shares. Jane owns one hundred shares. She transfers ten of her shares to her nine nominees to increase her voting powering general meetings. Joseph, who is the chairman at the general meeting, refuses to accept the votes of Jane‟s nominees.
Advise Jane on the validity of the Chairman‟s action and her right as a member.
Date posted:
February 7, 2019
.
Answers (1)
-
'The rule in the case of Ashbury Railway Carriage Vs. Riche (1875)stated that an act has not been authorized by the objects clause of a...
(Solved)
'The rule in the case of Ashbury Railway Carriage Vs. Riche (1875)stated that an act has not been authorized by the objects clause of a company's Memorandum of Association in ultra vires to the company and the members cannot ratify it.'
Discuss.
b) Explain the various ways in which persons intending to form a company may avoid
personal liability on contracts they make on behalf of the proposed company.
c) It has been held that the memorandum and Articles of Association of a company shall, when registered, bind the company and the members to the same extent as if the documents has been signed and sealed by each member and contained covenants an the part of each member to observe all the provisions of the memorandum and the articles.
Explain the effect of this provision on the relationship between shareholders and their company and between shareholders themselves.
Date posted:
February 7, 2019
.
Answers (1)
-
(a) The principle of corporate legal personality is an important and fundamental aspect of company law.
Discuss this statement citing relevant decided cases....
(Solved)
(a) The principle of corporate legal personality is an important and fundamental aspect of company law.
Discuss this statement citing relevant decided cases.
(b) Ropoff Company Ltd., a private limited company, has been under inquiry on alleged fraudulent financial transactions. The officers of the company under suspicion have denied any association with the company.
At the inquiry it was suggested that the corporate veil be lifted and the realities of the company in question be looked into.
Explain the instances when the veil of incorporation may be l
Date posted:
February 7, 2019
.
Answers (1)
-
(a) Explain the rules that govern quorum and the exceptions thereof
(b) In relation to proxies, write brief notes on:
(i) General proxies.
(ii) Special proxies....
(Solved)
(a) Explain the rules that govern quorum and the exceptions thereof
(b) In relation to proxies, write brief notes on:
(i) General proxies.
(ii) Special proxies.
Date posted:
February 7, 2019
.
Answers (1)
-
Discuss the powers of the liquidator:
(a) With the sanction of the court.
(b) Without the sanction of the court
(Solved)
Discuss the powers of the liquidator:
(a) With the sanction of the court.
(b) Without the sanction of the court
Date posted:
February 7, 2019
.
Answers (1)
-
Two years ago, Smart Limited issued a series of debentures in favor of Tumaini Bank. The debentures were in the Standard Bank form described as...
(Solved)
Two years ago, Smart Limited issued a series of debentures in favor of Tumaini Bank. The debentures were in the Standard Bank form described as a fixed and floating charge over all the company‟s assets. There was an express term of the debenture that the company would not issue a subsequent fixed charge to rank in priority to the floating charge. Six months later, Smart Limited issued a fixed charge over its freehold property in favor of Mali Bank Mali Bank was unaware of the prohibition. Smart Limited has gone into liquidation and both banks are proving their debts on priority basis.
Discuss the legal position of each bank.
(c) The most common method of securing debentures is to execute a trust deed.
Explain the meaning of a trust deed and outline its advantages
Date posted:
February 7, 2019
.
Answers (1)
-
Enumerate the various types of charges that require registration as stated under the
Companies Act.
(Solved)
Enumerate the various types of charges that require registration as stated under the
Companies Act.
Date posted:
February 7, 2019
.
Answers (1)