Get premium membership and access revision papers, questions with answers as well as video lessons.

Company Law Question Paper

Company Law

Course:Certified Public Accountant

Exam Year:2010

KASNEB

COMPANY LAW

DECEMBER 2010

QUESTION ONE
a) A company is regarded a legal person, distinct from its members. The fact that a person holds all or substantially all of the shares in a company does not make the company's business that person's business in the eyes of the law.

Discuss the above statement. (12 marks)

b) Explain the legal provisions governing pre-incorporation contracts. (8 marks)

QUESTION TWO
a) Explain the meaning of the term "articles of association" as used in company law.
(4 marks)

b) Once signed and registered, the articles of association of a company have effects on both the shareholders and the company itself.
Describe these effects as provided in the Companies Act. (6 marks)

c) Outline the provisions of the Companies Act which govern the alteration of the articles of association of a company. (5 marks)

d) Highlight five advantages of a private company over a public company. (5 marks)

QUESTION THREE
a) Explain the meaning of the term "floating charge" as used in company law. (4 marks)

b) Discuss the factors that distinguish a debenture from a share. (8 marks)

c) Every trading company is deemed to have borrowing powers. However, the law imposes some restrictions on these powers.
With reference to the above statement, explain:

1. The restrictions on the borrowing by a company. (2 marks)
2. The legal effect of ultra vires borrowing. (6 marks)

QUESTION FOUR
a) Describe the powers of Commissioner for Cooperative Development during liquidation of a cooperative society. (10 marks)

b) The members of Changamwe Cooperative Society Ltd wish to change the name of their society to Mawe Cooperative Society Ltd and seek your legal advice.

Advise the members on the following:

1. Procedure to be followed in order to change the name. (6 marks)
2. Legal effect of the change of name. (4 marks)

QUESTION FIVE
a) With reference to meetings of directors of a company, explain the following:
1. Meaning of the term "special resolution"
2. Matters that require a special resolution.

b) Highlight the circumstances under which a director of a company would be disqualified from holding office. (6 marks)

QUESTION SIX
a) Describe the procedure that a person should follow in order to transfer his shares to another shareholder. (8 marks)

b) Sharp kioko transferred his shares in Mwamba ltd to Faith Kazuri six months ago. The shares were partly paid for. Nine months after the transfer, Mwamba ltd went into liquidation. You have been appointed the liquidator of Mwamba ltd.

Analyze the case and advise Sharp Kioko on his liability for the debts of Mwamba ltd.
(12 marks)

QUESTION SEVEN
a) Analyze the provisions of the Companies Act which govern the appointment of auditors of a company. (10 marks)

b) Explain the purpose of a profit and loss account of a company. (6 marks)

c) With reference to company law, outline the books of account that a company is required to maintain. (4 marks)

Company Law Question Paper

More Question Papers

Popular Exams