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Law 6011 Corporate Law And Governance Question Paper

Law 6011 Corporate Law And Governance

Course:Master Of Business Administration In Corporate Management

Institution: Kca University question papers

Exam Year:2014

UNIVERSITY EXAMINATIONS: 2013/2014
EXAMINATION FOR THE MASTERS OF BUSINESS ADMINISTRATION
(MBA) CORPORATE MANAGEMENT
LAW 6011 CORPORATE LAW AND GOVERNANCE
KITENGELA CAMPUS
DATE: AUGUST, 2014
TIME: 3 HOURS
INSTRUCTIONS: Answer Question One and Any Other Three Questions
QUESTION ONE (31 MARKS)
Under the Articles of Association of Bidii plc, Alex was appointed to be the managing directors for
life. It was also provided that the Managing Director could only be removed if he was declared
bankrupt or he became incapable of performing his duties. Alex was thereafter given a contract of
service under the Company’s seal appointing him to the post indicating that he was to serve as a
Managing Director for life. No condition upon which he could be removed was indicated in that
contract.
After Alex had served for ten years, there was a disagreement between him and the other directors on
how the Company was being run. It was even alleged that he had misappropriated the Company’s
funds. The other directors therefore pushed through a special resolution in the annual general meeting
of the company to amend the Articles of Association so as to add another ground for the removal of the
Managing Directors by a resolution passed by other directors of the company unanimously. The other
directors were thus able to remove Alex from office.
Alex approaches you for advice. Explain to him:
a)
The legal effects of the Articles of Association of a company vis-à-vis the power to enforce its
provisions. (11 Marks)
b) The legal provisions for the alteration of Articles of Association of a company. (10 Marks)
c) The effect of alteration on contract of directors. (10 Marks)
1
QUESTION TWO (23 MARKS)
a) Critically examine winding up of a company by the court. (20 Marks)
b) What are the consequences of a winding up order? (3 Marks)
QUESTION THREE (23 MARKS)
The decision of House of Lords in Salomon v A Salomon & Co. Ltd [1897] AC 22 has had a lasting
influence in corporation law. It is often credited with the principle of separate legal entity of the
corporation distinct from the members.
a) Discuss the doctrine of corporate personality as highlighted in that case. (4 Marks)
b) Explain any three (3) theories of corporate personality. (9 Marks)
c) What are the advantages and disadvantages of incorporation? Illustrate. (10 Marks)
QUESTION FOUR (23 MARKS)
a)
Examine the two major types of corporations that can exist under law. Give examples.
(6 Marks)
b)
Highlight the characteristics of the (at least 5) forms of incorporated entities that exist under
Kenyan law.
c)
(12 Marks)
Explain the possibility of conversion of a company from one form to another. (5 Marks)
QUESTION FIVE (23 MARKS)
Allan is a businessman in Nairobi. He seeks to establish a company under which his businesses will be
accommodated. He has approached you as an expert in corporate issues to advise him of the pre-
incorporation role. He has heard about promoters and seeks to know who exactly they are and what the
law provides about them. Explain to him:
a) Who promoters are and highlight the fiduciary duties they possess. (14 Marks)
b) The remedies available against promoters for breach of fiduciary duties. (9 Marks)
QUESTION SIX (23 MARKS)
Since a company is an artificial person, it can only act through an agency of a human person. In light
of this:
a)
Identify the two primary organs of the company and discuss their roles in company
management.
b)
(12 Marks)
Critically examine the indoor management rule under company law. (11 Marks)
2

Law 6011 Corporate Law And Governance Question Paper

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