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Bba 402 Company Law Question Paper

Bba 402 Company Law

Course:Bachelor Of Commerce

Institution: Pwani University question papers

Exam Year:2012

A Constituent College of Kenyatta University
UNIVERSITY EXAMINATIONS
2011/2012 ACADEMIC YEAR
4TH YEAR EXAMINATION
BACHELOR OF COMMERCE COURSE
CODE/TITLE: BBA 402: COMPANY LAW
END OF SEMESTER II DURATION: 3 HRS
INSTRUCTIONS Answer question one (Compulsory) and any Two from in Section B

Question One
City Acre Limited was incorporated in 2008. The directors of the company who were also the shareholders are Ochieng and Kamau who own the company’s shares equally. In 2009 the company borrowed 1 million from Bidii Bank which the directors used to purchase a car for their own use. Between 2008 and 2010 Chali supplied the company with its raw materials and Kshs. 500,000 is still unpaid. Although Ochieng and Kamau are listed directors, the real running of the company and decision making is not done by them. Last year it was discovered that the company was unable to pay its debts. Discuss
a) The liabilities of the directors if any. (20marks)

b) The type of winding up that would be most appropriate and why? (6marks)

c) Other than the facts stated above, what other grounds can lead to winding up of a company under section 5:219 of the companies ACT. (10marks)

Question Two
a. Explain the meaning of the following terms:
i. Poll vote (2marks)
ii. Proxy vote (2marks)
b. Discuss five principal differences between a public limited company and private limited company as outlined by the companies ACT. (5marks)
c. Outline the effects of ultra vires action. (5marks)

SECTION B-
Answer any two questions in this Section (30marks)

Question Three
a) “While every person who deals with the company is deemed to know the contents of the memorandum of association and the articles of association, person outside the company are entitled to assume that any internal procedures required for purposes of validating of action of the company has been compiled with. Discuss the above statement in light of Companies Act Cap 486. (10marks)

b) Describe the rights and liabilities of members of a company. (5marks)

Question Four
a) Shareholders of a company have rights in the company while creditors have rights against the company. Discuss. (10marks)

b) Give an outline the distinction between a share and a debenture bond.
(5marks)

Question Five
a) Though the certificate of incorporation is conclusive for purposes of incorporation, using decided cases, outline circumstances under which it could be withdrawn. (10marks)

b) What disadvantages would one encounter when running a business as a company? (5mark)

Bba 402 Company Law Question Paper

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