Business Law Ii Question Paper
Business Law Ii
Course:Buss 216
Institution: Kenya Methodist University question papers
Exam Year:2008
KENYA METHODIST UNIVERSITY
END OF FIRST TRIMESTER 2008 EXAMINATION
FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTMENT : BUSINESS ADMINISTRATION
COURSE CODE : BUSS 216
COURSE TITLE : BUSINESS LAW II
TIME : 3 HOURS
INSTRUCTIONS
• Answer Question ONE and any other THREE Questions
Question 1
a) The certificate of incorporation issued by the Registrar of Companies is conclusive proof that the company has come into existence, thereby bestowing upon the company a number of distinctive features. Citing case law or practical examples where appropriate, discuss the said features. (15marks)
b) “Promoters are not agents of the company they promote until incorporation when they could be agents.”
Discuss the statement clearly stating the promoters’ position in respect to the pre-incorporation contacts. (10marks)
Question 2
Joseph wishes to start a business but he does not know the best form of business entity he should establish. Joseph has a lot of business acumen, he can easily access finances and is a good organizer. He has come to you for advice. Advise him on the different types of business entities that exist and indicate the advantages and disadvantages of a public limited company. (25marks)
Question 3
a) Majority decides and rules the company. In connection with this statement, explain the role of Foss Vs Harbottle indicating the advantages of this rule, and outline exceptions to the rule. (15marks)
b) The memorandum of association is a public statement that must be known by the public. However, the articles are only for internal management. Discuss the rule in Turquand; give exceptions to the rule. (10marks0
Question 4
a) A company may freely alter its articles of association but there are some restrictions on the alterations. Outline these restrictions. (12marks)
b) State the content/particulars of the annual return that every company registered under the companies Act, Cap.486, must make to the Registrar of Companies?
(13marks)
Question 5
a) The directors manage a company. Members as members do not have management powers. However there are a number of situations where the members can exercise certain rights that border on controlling director’s actions. Discuss any five such situations. (10marks)
b) Outline eight charges that must be delivered to the Registrar for registration.
(8marks)
c) State four matters where special notice is required for a valid resolution to be passed.
(7marks)
Question 6
Write explanatory notes on any five of the following:
a) Subsidiary company. (5marks)
b) Persons who may petition the court for compulsory winding up of a company.
(5marks)
c) Qualification shares of a director of a company. (5marks)
d) Matters requiring special resolutions to be passed. (5marks)
e) Foreign company. (5marks)
f) The golden rule in framing the prospectus. (5marks)
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