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Bmgt 323: Company Law Question Paper

Bmgt 323: Company Law

Course:Bachelor Of Commerce

Institution: Kabarak University question papers

Exam Year:2012

KABARAK
UNIVERSITY
UNIVERSITY EXAMINATIONS
2012/2013 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
BMGT 323: COMPANY LAW
DAY: MONDAY

DATE: 10/12/2012
TIME: 2.00 – 4.00 P.M.
STREAM: Y3S2
INSTRUCTIONS:
1.
Answer Question 1 and any two other questions
2.
Question 1 carries 30 marks. All other questions carry Equal(20) marks
3.
No materials are to be brought into the examination room
QUESTION ONE
1. The company is, at law a different person altogether form the subscribers......, and
though it may be after that after incorporation, the business is precisely same as it was
before same as it was before, and the same persons are managers, and the same hands
receive the profits, the company is not, law, the agent of the subscriber or trustee for
them” per lord Mc Naughteen in Salmon V Salmon & Co.Ltd (1897) A.C.22, at p.51.
Taking this statement as the point of departure, discuss the nature of the limited
liability company and its main attributes. (30 marks)

QUESTION TWO
2. The doctrine of ultra vires as was explained in Ashbury’s case should be maintained, but
this doctrine ought to be reasonably and not unreasonably be understood and applied,” per
Selbourne L.J in Attorney General v Great Eastern Railway (1880)5 App.Cas 473 In the
light of Lord Selbourne’s statement, explain the major issues that have been raised against
the doctrine of ultra-vires. What is the status of this doctrine in Kenya business law?
(20 marks)
QUESTION THREE
3. (a) Explain the circumstances under which the corporate veil can be lifted or the
certificate of a company can be cancelled remembering to include statutory and case
law circumstances Support your answer with decided cases and examples (10 Marks)

(b) “........the directors are therefore said to be both trustees and agents of the
company.......they are a body delegated with the duty of managing general affairs of
the company....’’ Aberdeen Brothers Co v Blaike Brothers (1845)
In light of the above statement discuss the duties of a company director sue statutory
rules and cases in your answer.

(10 marks)
QUESTION FOUR
4. (a) Under S 212 of the Companies Act CAP 389, a Court may order the winding up of
a company. State how Winding up may be done under the following circumstances:-
(i)
A member’s voluntary winding up (6MARKS)
(ii)
Winding up by Order of Court (7MARKS)
(iii)
Winding up by supervision of court (7MARKS)

QUESTION FIVE
5. It has been contended that the Article of Association of a company constitute a
contract not merely between the shareholders and the company, but also between the
individual shareholder and every other.
Discuss the validity of the contention, noting to support your answer with relevant
statutory and judicial authorities (20 marks)

Bmgt 323: Company Law Question Paper

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