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-This problem is based on breach of duty by directors.
-In this case it is apparent that Daudi is guilty of breach of duty to the company. His conduct is fraudulent in character and the company is entitled to damages since the general meeting of the company has ratified the abuse of power Jane Wangokho and other aggrieved members have the right to institute a derivative action against Daudi for the misfeasance. The action is representative in character.
-My advise is based on the exceptions to the rule in Foss V.Harbottle which facilitate a derivative action against fraudsters if the company cannot itself institute proceedings.
marto answered the question on February 6, 2019 at 11:07
- Explain the disadvantages to a minority shareholder in bringing a derivative action.
(Solved)
Explain the disadvantages to a minority shareholder in bringing a derivative action.
Date posted: February 6, 2019. Answers (1)
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Citing decided cases, state and describe the characteristics of a derivative action.(Solved)
Citing decided cases, state and describe the characteristics of a derivative action.
Date posted: February 6, 2019. Answers (1)
- Outline the documents that must be delivered to the registrar of companies together
with the memorandum of association.(Solved)
Outline the documents that must be delivered to the registrar of companies together
with the memorandum of association.
Date posted: February 6, 2019. Answers (1)
- What are the contents of the memorandum of association as stated in the...(Solved)
What are the contents of the memorandum of association as stated in the
Companies Act?
Date posted: February 6, 2019. Answers (1)
- Distinguish a company limited by shares from a company limited by guarantee.
(Solved)
Distinguish a company limited by shares from a company limited by guarantee.
Date posted: February 6, 2019. Answers (1)
- Distinguish between the following classifications and debentures:
(a) Bearer debentures and registered debentures.
(b) Redeemable debentures and irredeemable debentures.
(c) Debentures and debenture...(Solved)
Distinguish between the following classifications and debentures:
(a) Bearer debentures and registered debentures.
(b) Redeemable debentures and irredeemable debentures.
(c) Debentures and debenture stock
(d) Unsecured debentures and secured debentures
Date posted: February 6, 2019. Answers (1)
- Anna and Berita are directors of Pesa Limited and each holds forty per cent of the ordinary shares. The remainder is held by Charles.
...(Solved)
Anna and Berita are directors of Pesa Limited and each holds forty per cent of the ordinary shares. The remainder is held by Charles.
In addition to the shares, Anna also holds debentures issued by Pesa Limited, redeemable on 8 August 2003. Anna wishes to dispose of her shares and debentures.
On the other hand, Berita and Charles do not wish Anna's substantial interest in the company to pass to other people upon the sale of the shares and debentures.
Advise Pesa Limited on the legality of each of the courses of action listed below:
(a) Pesa Limited will raise the necessary funds and purchase the shares and debentures.
(b) Pesa Limited will raise funds and lend them to Charles so that he may purchase Anna's debentures. Charles will also arrange for a private loan guaranteed by Pesa Limited so that he may purchase Anna‟s shares.
(c) A new company, Pendo Limited, will be formed and eighty per cent of its ordinary shares will be held by Pesa Limited. Berita and Charles to hold ten per cent each. Pendo limited will borrow money to buy Anna's shares and debentures
Date posted: February 6, 2019. Answers (1)
- Martha is engaged in the promotion of a company. She seeks your advice on several matters relating to the promotion of a company. You are...(Solved)
Martha is engaged in the promotion of a company. She seeks your advice on several matters relating to the promotion of a company. You are required to advise her on the following matters:
(a) The restrictions upon the choice of a corporate name with which a promoter must
comply.
(b) The legal duties of a promoter with regard to her responsibility where she sells her
own property to the company she is promoting.
(c) The promoter's right to payment for her services by the company after
incorporation.
Date posted: February 6, 2019. Answers (1)
- Section 213 of the Companies Act qualifies the liability of past and present members as contributors. Explain these qualifications as provided for in the...(Solved)
Section 213 of the Companies Act qualifies the liability of past and present members as contributors. Explain these qualifications as provided for in the Companies Act.
Date posted: February 6, 2019. Answers (1)
- Enumerate the circumstances under which the court may order the winding up of a company on a just and equitable ground. (Solved)
Enumerate the circumstances under which the court may order the winding up of a company on a just and equitable ground.
Date posted: February 6, 2019. Answers (1)
- Rush, Fast and Speed are directors of Modern Technology Company Ltd. The company was formed with the main object of computer training. However, due to...(Solved)
Rush, Fast and Speed are directors of Modern Technology Company Ltd. The company was formed with the main object of computer training. However, due to the power rationing, the company business has fallen below the expected productivity and is threatened with closure. In order to keep afloat, the three directors approached Money Bank Ltd for an overdraft of Sh. 2 million to establish an off-licence bar and restaurant within the city centre. The credit manager asked the company to provide its copy of the memorandum of association and the company complied. Modern Technology was then given the overdraft. However, it has run into financial difficulties and is unable to repay the loan.
Can the bank successfully sue for recovery of the loan?
Date posted: February 6, 2019. Answers (1)
- Explain the circumstances under which directors of a company will be held personally liable to acts committed on behalf of the company.(Solved)
Explain the circumstances under which directors of a company will be held personally liable to acts committed on behalf of the company.
Date posted: February 6, 2019. Answers (1)
- (i)What is a special notice?
(ii) Give the circumstances under which a special notice would be required with respect to company meetings. (Solved)
(i)What is a special notice?
(ii) Give the circumstances under which a special notice would be required with respect to company meetings.
Date posted: February 6, 2019. Answers (1)
- State the Rule in Sharp-vs-Dawes and explain the exceptions to this rule? (Solved)
State the Rule in Sharp-vs-Dawes and explain the exceptions to this rule?
Date posted: February 6, 2019. Answers (1)
- Identify the different types of meetings that may be held by police limited companies.(Solved)
Identify the different types of meetings that may be held by police limited companies
Date posted: February 6, 2019. Answers (1)
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A person who lends to the security of a specific mortgage of a company's property is always entitled to repayment on his loan out...(Solved)
A person who lends to the security of a specific mortgage of a company's property is always entitled to repayment on his loan out of the proceeds of the sale of the mortgaged property. This is done before any other creditor receives any payment. A person who takes a floating charge is not in such a secure position.
Why is the holder of a floating charge in a less favorable position?
Date posted: February 6, 2019. Answers (1)
- 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)