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- The value of security remain uncertain since the company continues to carry on business in the ordinary manner.
- A fixed charge created subsequent to the floating charge has priority in the satisfaction of claims.
- Other interests for example landlords distress for rent has priority in the satisfaction of claims.
- Other interests for example landlords distress for rent has priority in the satisfaction of claims.
- A floating charge created within 6 months before the commencement of winding up is deemed to be a fraudulent preference and is void.
-A floating charge created within 12 months before the commencement of winding up is invalid unless it is proved that the company was solvent immediately after its creation.
marto answered the question on February 6, 2019 at 10:25
- What happens to a floating charge when it crystallizes?(Solved)
What happens to a floating charge when it crystallizes?
Date posted: February 6, 2019. Answers (1)
- A part from the appointment of a receiver, four other events will cause a floating charge to crystallize. Describe these four events. (Solved)
A part from the appointment of a receiver, four other events will cause a floating charge to crystallize. Describe these four events.
Date posted: February 6, 2019. Answers (1)
- a)Explain the proprietary rights of a member in a company.
(b) Rita applied for 2,000 shares in Bidii Yako Company Ltd. following her application, no...(Solved)
a)Explain the proprietary rights of a member in a company.
(b) Rita applied for 2,000 shares in Bidii Yako Company Ltd. following her application, no allotment at the time was made. Later on without her application, 2,000 shares were transferred to her and her name placed in the register of members.
Rita knowing that her name was in the register of members took no steps to have it rectified. Later on, the company collapsed. Rita was called upon to pay up on her shares and she has declined to do so arguing that she was not a member of Bidii Yako Company Ltd. She seeks your advice on the matter. Advise Rita
Date posted: February 6, 2019. Answers (1)
- a) Outline the information that is required when registering a charge.
b) In July 2001, Muungano Ltd obtained an overdraft from a bank upon...(Solved)
a) Outline the information that is required when registering a charge.
b) In July 2001, Muungano Ltd obtained an overdraft from a bank upon deposit of title deeds and the execution of a memorandum of charge the memorandum was executed in due form by the company but left undated. The overdraft continued and subsequently the manager of the bank filled in the date as 10th January 2002. The memorandum was then registered with the registrar of company‟s on 31st January 2002 and the registrars certificate to that effect was duly issued.
Discuss the validity of the charge
Date posted: February 6, 2019. Answers (1)
- Triple H, Undertaker Austin and Flair are directors of Mieleka Ltd a company regulated by Table A. Fair is the managing director and undertaker...(Solved)
Triple H, Undertaker Austin and Flair are directors of Mieleka Ltd a company regulated by Table A. Fair is the managing director and undertaker is the chairperson of the company. Sometime ago the directors meeting as a board decided to:
i) Lend Triple H Shs.500,000 to purchase a car for his wife Stephane for her personal use;
ii) Advance Shs.500,000 to Austin to cover his expenses on a worldwide (promotional tour on behalf of the company).
Booker T, the company secretary informs you that Stone Cold a shareholder claims that this transaction should have been approved by the members and that he intends to raise the matter during the next general meeting.
Required
i) Advise Booker T which of the transactions need approval by the members in general meeting
ii) What are the consequences of the necessary approval not being obtained?
Date posted: February 6, 2019. Answers (1)
- Discuss the rules relating to appointment and vacation of office of directors.(Solved)
Discuss the rules relating to appointment and vacation of office of directors .
Date posted: February 6, 2019. Answers (1)
- In a company with a share capital:
i) What is the members right to appoint a proxy
ii) What are the rights of...(Solved)
In a company with a share capital:
i) What is the members right to appoint a proxy
ii) What are the rights of the proxy so appointed?
Date posted: February 6, 2019. Answers (1)
- Outline the various matters that require to be sanctioned by members through a special
resolution.(Solved)
Outline the various matters that require to be sanctioned by members through a special
resolution.
Date posted: February 6, 2019. Answers (1)
- a)State the circumstances under which a company would be required to maintain an index
of the register of members
b) Kazi Bure borrowed...(Solved)
a)State the circumstances under which a company would be required to maintain an index
of the register of members
b) Kazi Bure borrowed Shs.50,000 from Tumaini Bank and deposited his XYZ Supermarket Ltd‟s share certificate with a blank transfer as a security. Subsequently he bought goods from the supermarket on credit. The goods were worth Shs.15,000. The articles of association of XYZ Supermarket Ltd claimed a first and paramount lien on its members shares on debts due to the supermarket. However, before the supermarket lien arose the bank gave the supermarket notice of Kazi Bure's share certificate having been lodged with the bank as a security for the loan. Kazi Bure is unable to pay for the goods he obtained from the supermarket and has also defaulted on the loan. XYZ Supermarket Ltd wants to exercise its lien and the bank wants to exercise its equitable right to have the shares transferred to into its name.
In this situation discuss the rights of
i) The Bank
ii) XYZ Supermarket Ltd
c) Bob and Babs jointly own shares in Powerfoam Ltd. They are seeking your advice
regarding their legal position as joint holders of the shares. Advice them
Date posted: February 6, 2019. Answers (1)
- The capital of may no doubt be diminished by the expenditure upon and reasonably incidental to all the objects specified. A part of it may...(Solved)
The capital of may no doubt be diminished by the expenditure upon and reasonably incidental to all the objects specified. A part of it may be lost in carrying on the business operations authorized. Of this, all persons trusting the company are aware and take the risk. But creditors have the right to rely and were intended by the legislature to have the right to rely on the capital remaining undistributed by any expenditure outside these limits or by the return of nay of it to the shareholders.
Per Lord Herchell L.J. in Trevor v Whitworth (1837) 12 App. Cap 409 at 415.
a)Discuss this statement outlining the circumstances and conditions under which companies may reduce their capital.
b) State what is meant by underwriting commission and distinguish it from brokerage
Date posted: February 6, 2019. Answers (1)
- a) James and Shem proposed to form a company by the name 'Micromine Limited'. On behalf of the proposed company, Shem entered into contracts to...(Solved)
a) James and Shem proposed to form a company by the name 'Micromine Limited'. On behalf of the proposed company, Shem entered into contracts to purchase office furniture and stationery.
Required:
i) What are the company's rights and liabilities under such contracts after incorporation?
ii) What provisions for the protection of Shem are found in such contracts?
Date posted: February 6, 2019. Answers (1)
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The shares of Promotion Limited, a private company are held by members of three families, that is, the family of Mr. Karanja, Mr. Mutisya...(Solved)
The shares of Promotion Limited, a private company are held by members of three families, that is, the family of Mr. Karanja, Mr. Mutisya and Mr. Otieno.
Mr. Karanja and Mr. Mutisya hold 90% of the company's shares. However, they feel that, the company is in need of further capital but due to the squabbles among the families, Mr. Otieno is not willing to inject additional funds so long as Mr. Karanja still holds any shares in the company. Further, Mr. Karanja and Mr. Mutisya have reasonable cause to believe and do in fact believe that the family of Mr. Otiengo is running their own business which is competing with that of Promotion Limited. It is known as a fact that Mr. Otieno is obtaining information as a member of Promotion Limited, which he is using to the benefit of his competing business.
To resolve the problems, Mr. Karanja and Mr. Mutisya propose to alter the company‟s articles of association by adding two new articles. The first article will enable the shareholders of 90% of the company's shares to compulsorily acquire the shares of the minority shareholder. The second one will require any shareholder who carries on competing business with company's business to transfer his shares to the nominee of the directors.
Required:
i) State the restrictions imposed both by common law and statute law upon a company's
power to alter its articles of association.
ii) Discuss the validity of the proposed alteration
Date posted: February 6, 2019. Answers (1)
- Outline the documents that are normally kept at the registered office of a company.(Solved)
Outline the documents that are normally kept at the registered office of a company.
Date posted: February 6, 2019. Answers (1)
- Tim and Tom wish to establish a business jointly. However, they are not sure whether to establish a limited liability company or an unlimited...(Solved)
Tim and Tom wish to establish a business jointly. However, they are not sure whether to establish a limited liability company or an unlimited liability company; as they know little about these types of companies.
i) Explain to them the differences between a limited company and an unlimited company.
ii) State the provisions of the Companies Act regarding the re-registration of unlimited company as limited.
Date posted: February 6, 2019. Answers (1)
- Distinguish between a corporation sole and a corporation aggregate.(Solved)
Distinguish between a corporation sole and a corporation aggregate.
Date posted: February 6, 2019. Answers (1)
- Happy co. Ltd was incorporated in January 2000 with an authorized share capital of 50,000,000 of one shilling per share which is fully issued and...(Solved)
Happy co. Ltd was incorporated in January 2000 with an authorized share capital of 50,000,000 of one shilling per share which is fully issued and fully paid. The original articles of association gave the directors authority to issue the initial authorized share capital.
The directors are proposing to purchase a plot from Mr Karan for KShs.3,000,000 and to finance the purchase by a fresh issue of 2,000,000 shares at one shilling per share to Mr. Karan. In order to develop the plot they propose to raise further capital by issuing a further 2,000,000 shares of one shilling each. The directors propose that 1,000,000 of the shares should be offered to existing shareholders and 1,000,000 to the general public. The shares to Mr Karan, the existing shareholders and to the general public are to be offered at one shilling and fifty cents each.
Explain the preliminary checks which the directors must make before proceeding with these proposals. State the steps the directors must take to give them effect.
Date posted: February 6, 2019. Answers (1)
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Dividend is payable only in cash to shareholders out of profits available for distribution.
State the rules which determine the extent to which profits...(Solved)
Dividend is payable only in cash to shareholders out of profits available for distribution.
State the rules which determine the extent to which profits arising out of the disposal of fixed assets may be used to pay such dividends.
Date posted: February 6, 2019. Answers (1)
- 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)