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Business Law Ii (Buss 216) Question Paper

Business Law Ii (Buss 216)

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2010

TIME : 2 HOURS
INSTRUCTIONS Answer Question ONE (compulsory) and any Other TWO Questions

Question One
a) Define the term company. (2 marks)
b) List and briefly explain the characteristics of a company. (6 marks)
c) A promoter is a person who does the necessary preliminary work incidental to the formation of a company. Briefly explain the functions of a promoter. (4 marks)
d) A Memorandum of Association is a document that relates the company to outsiders. State and briefly explain five clauses of the Memorandum of Association. (5 marks)
e) The objectives of a company can be altered by a special resolution but only to the extent allowed by Section 8 of the Companies Act. Briefly explain the various kinds of alterations allowed by Section 8 of the Act. (5 marks)
f) Prospectus is the window through which an investor can look into the soundness of a company’s business activities. List the matters that should be contained under general information of the prospectus. (4 marks)
g) Define the following terms as used in relation to a company’s share capital;
i. Authorized capital (1 mark)
ii. Issued capital (1 mark)
iii. Called up capital (1 mark) iv. Paid up capital (1 mark)

Question Two
a) Distinguish between winding up and dissolution of a company. (4 marks)
b) List and explain three modes of winding up of a company. (6 marks)

c) Explain the circumstances under which a company may be wound up in each of the modes you have listed in (b) above. (6 marks)
d) As a general rule the Companies Act Cap 486 demands that a retiring auditor should be reappointed without any resolution being passed at the AGM. List the circumstances under which this reappointment may not be automatic. (4 marks)

Question Three
a) Define a public company. (2 marks).
b) Briefly explain the distinguishing features of a private and public company. (10 marks)
c) Explain the procedure that needs to be followed to convert a private company to a public company. (4 marks)
d) Distinguish between the following terms:
i. Shares and stocks (2 marks)
ii. Surrender of shares and forfeiture of shares (2 marks)

Question Four
a) Explain the distinctive requirements for commencement of business for:
i. Private company (2 marks)
ii. Public company (2 marks)
b) Explain the circumstances under which a person may become a member of a company without being its shareholder. (4 marks)
c) List and explain the various modes through which a person may become a member of a company. (5 marks)
d) List the various rights of a member of a company as conferred by the Companies Act, Memorandum of Association or Articles of Association. (7 marks)

Business Law Ii (Buss 216) Question Paper

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