Buss 216:Business Law Ii Question Paper
Buss 216:Business Law Ii
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2011
SCHOOL : SCHOOL OF BUSINESS AND ECONOMICS
DEPARTMENT : BUSINESS ADMINISTRATION
TIME : 2 HOURS
INSTRUCTIONS Answer Question ONE and any other TWO Questions Cite relevant case law or/and give practical examples
Question 1
a) Outline the main differences between a company and partnership. (10marks)
b) Discuss in detail, the “Rule in Foss versus Harbottle” indicating the majority rule, importance of the case and setting out the exceptions. (10marks)
c) Explain the Golden Rule of framing the prospecting and the defences available to the director or other person involved in issuing a misleading prospectus. (10marks)
Question 2
a) State and explain the various types of shares a public limited company may issue. (10marks)
b) What are the consequences of completion of incorporation of a public limited company, limited by shares? (10marks)
Question 3
Write detailed notes on the following: (10marks)
a) The difference between share and stock.
b) Meaning and scope of substratum.
c) Meaning and types of general meetings of public limited company.
d) The duties of Chairman of company meetings.
Question 4
a) Explain briefly the difference between winding up receivership. (6marks)
b) Distinguish between director’s qualification and director’s disqualification. (6marks)
c) Mwangi, a promoter of KML Ltd. which was issued with certificate of incorporation on June 2nd, 2010, bought two cars from Onyango on 2nd February 2010. On 4th September 2010 Mwangi who had become a director of KML Ltd. bought a house from Njuguna. The cars and the house were said to be bought for the company KML Ltd. by December 31, 2010 both Onyango and Njuguna had not been paid.
i) Advise Onyango and Njuguna on how to recover the money owed. (4marks)
ii) Can KML Ltd. ratify Mwangi’s contract with Onyango? (4marks)
Question 5
a) ‘Turquand Rule’ is an important concept in company law. Explain fully the concept. (8marks)
b) Discuss the various resolutions that a company may pass when making decisions. (10marks)
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