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- The profits which may be distributed as dividend are accumulated realized profits so far as not previously utilized by distribution or capitalization, less accumulated realized losses so far as not previously written off in a reduction or re-organization.
- Profits are generally ascertained by reference to audited accounts prepared on a proper basis.
- If a fixed asset has a limited useful economic life, provision must be made for depreciation calculated to write off the value of that asset over the period of its useful economic life.
- In so far as depreciation relates to the historical cost of the asset it must be treated as a realized loss and debited against profit, in determining the amount of distributable profit remaining. But if the asset has been revalued, any increase depreciation provision related to the increase in value of the asset may be treated as profit.
- If on a general revaluation of all fixed assets it appears that there is a diminution in value, any provision related to it need not be treated as realized loss.
-If a company shows development expenditure as an asset in its accounts it must usually be treated as realized loss.
- A public company may only make a distribution of its net assets are at the time, not less that the aggregate of its called up of its called up share capital and
marto answered the question on February 6, 2019 at 08:19
- In order to frustrate a threatened take-over bid, the directors of Kesho Ltd. issue to themselves and their nominees sufficient ordinary shares for cash so...(Solved)
In order to frustrate a threatened take-over bid, the directors of Kesho Ltd. issue to themselves and their nominees sufficient ordinary shares for cash so as to give themselves control of a majority of the shares which give the right to vote at a general meeting.
Mwananchi, a minority shareholder who had hoped to benefit by selling to the bidder, is very annoyed by the action of the directors.
Advise him as to his legal rights.
Date posted: February 6, 2019. Answers (1)
- Describe the various kinds of resolutions that may be passed at general meetings.
State the difference between them and list matters that require such resolutions...(Solved)
Describe the various kinds of resolutions that may be passed at general meetings.
State the difference between them and list matters that require such resolutions to be passed before they can have effect.
Date posted: February 6, 2019. Answers (1)
- In relation to corporate insolvency,
a)
i) Explain what is meant by a contributory.
ii) Distinguish between fraudulent and wrongful trading. Against whom...(Solved)
In relation to corporate insolvency
a)
i) Explain what is meant by a contributory.
ii) Distinguish between fraudulent and wrongful trading. Against whom may proceedings by brought for breaches of provisions against fraudulent trading and wrongful trading?
b) Highlight the powers of the court on hearing a petition.
Date posted: February 6, 2019. Answers (1)
- Highlight the circumstances under which a person may cease to be a member of a
company.(Solved)
Highlight the circumstances under which a person may cease to be a member of a
company.
Date posted: February 6, 2019. Answers (1)
- Birds Limited has three directors: Peacock, Sparrow and Vulture. Explain the legal implication of each of the following situations: a) Vultures son has recently...(Solved)
Birds Limited has three directors: Peacock, Sparrow and Vulture. Explain the legal implication of each of the following situations:
a) Vulture's son has recently come of age and vulture wishes to appoint him a director of
the company.
b) The company is considering the purchase of a substantial quantity of goods from fly ltd., in which sparrow has a large shareholding through he is not a director peacock and vulture are unaware of sparrow's interest in fly ltd.
c) Because of adverse publicity about peacock's private life, vulture and sparrow wish to
remove him as a director, since he refuses to resign.
d) In view of the adverse publicity, vulture and sparrow decide to exclude peacock from participation in the company's affairs.
e) The directors are advised by wise & co., the company's auditors, that there is no possibility of the company trading at a profit in the foreseeable future and no reasonable prospect of its paying its debts
Date posted: February 6, 2019. Answers (1)
- State the requirements of the Companies Act which relate to the company giving
financial assistance for purchase of its own shares....(Solved)
State the requirements of the Companies Act which relate to the company giving
financial assistance for purchase of its own shares. What are the consequences of non - compliance with these requirements?
Date posted: February 6, 2019. Answers (1)
- State and briefly discuss the conditions which must be fulfilled before a company can
either issue or redeem shares which are stated to be...(Solved)
State and briefly discuss the conditions which must be fulfilled before a company can
either issue or redeem shares which are stated to be redeemable.
Date posted: February 6, 2019. Answers (1)
- Y Ltd whose articles are similar to Table A, publish a weekly magazine. In one issue an article is critical of the policies of the...(Solved)
Y Ltd whose articles are similar to Table A, publish a weekly magazine. In one issue an article is critical of the policies of the city commission. A number of Commissioners who are also members of the company requisition a general meeting and secure the passing of an ordinary resolution ordering the company to publish in the next issue a withdrawal of the criticism. The directors of the company are adamant.
The angry commissioners approach you for the purpose of filing an action to compel the directors to publish a withdrawal.
Advise them.
Date posted: February 6, 2019. Answers (1)
- To what extent does the doctrine of constructive notice operate negatively? (Solved)
To what extent does the doctrine of constructive notice operate negatively?
Date posted: February 6, 2019. Answers (1)
- State the powers of the inspection appointed to investigate the affairs of the company(Solved)
State the powers of the inspection appointed to investigate the affairs of the company
Date posted: February 6, 2019. Answers (1)
- Detail the statutory provisions governing the investigation into the affairs of a company
by the registrar. (Solved)
Detail the statutory provisions governing the investigation into the affairs of a company
by the registrar.
Date posted: February 6, 2019. Answers (1)
- State the legal consequences of a winding up order made against a company.(Solved)
State the legal consequences of a winding up order made against a company.
Date posted: February 6, 2019. Answers (1)
- Describe the circumstance under which a company may be wound up on the ground that it is "just and equitable" to do so.(Solved)
Describe the circumstance under which a company may be wound up on the ground that it is "just and equitable" to do so.
Date posted: February 6, 2019. Answers (1)
- Outline the legal rules that govern the appointment of an Administrative Receiver by a holder of a floating charge. (Solved)
Outline the legal rules that govern the appointment of an Administrative Receiver by a holder of a floating charge.
Date posted: February 6, 2019. Answers (1)
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b) The directors of Alumasi Co. Ltd borrowed Shs.20 million from Maendeleo Bank. The Bank was informed that the money was intended to...(Solved)
b) The directors of Alumasi Co. Ltd borrowed Shs.20 million from Maendeleo Bank. The Bank was informed that the money was intended to be used to expand the company‟s horticultural business. The bank however, did not ask for the company‟s Memorandum of Association and lent the money. The money was spent for purposes not intended. These facts have come to light and Maendeleo Bank seeks your advice on whether the bank can successfully recover the money.
Advise the bank.
Date posted: February 6, 2019. Answers (1)
- Distinguish between a Fixed Charge and a Floating Charge(Solved)
Distinguish between a Fixed Charge and a Floating Charge
Date posted: February 6, 2019. Answers (1)
- Describe the duties of an Auditor as set out under the Companies Act.(Solved)
Describe the duties of an Auditor as set out under the Companies Act.
Date posted: February 5, 2019. Answers (1)
- Highlight the requirements to be met before a notice of meeting served on members can be held to be valid.(Solved)
Highlight the requirements to be met before a notice of meeting served on members can be held to be valid.
Date posted: February 5, 2019. Answers (1)
- The rule in Foss v Harbottle establishes the principle that where a wrong is done to the company, the proper plaintiff is the company itself....(Solved)
The rule in Foss v Harbottle establishes the principle that where a wrong is done to the company, the proper plaintiff is the company itself. However, where the wrong is done by the company directors, it may be impossible for the company to sue. In such a case, a derivate action may be the only option.
a) Explain what is meant by “derivative action”.
b) Describe the conditions that must be satisfied before a derivative suit can be instituted
Date posted: February 5, 2019. Answers (1)
- Define the term "prospectus" and explain the circumstances under which a company may issue a prospectus(Solved)
Define the term "prospectus" and explain the circumstances under which a company may issue a prospectus.
Date posted: February 5, 2019. Answers (1)