- Reduction of number of members
- Under section 33 of the Companies Act, if at any time, the number of members of a company falls below the statutory minimum and the company continues to carry on business for more than 6 months while the number is so reduced all persons who are members after the 6 months and who are aware that the company has less than 2 or 7 members are personally liable for all the debts of the company incurred after the 6 months and may be sued for them.
- Non-publication or mis description of the company's name
Under section 109 (4) of the companies Act a member who is an officer of the company may be held liable to make good any liability arising if he signed or authorized the signing of a negotiable instrument on which the company?s name is not published or is mis described.
-Fraudulent trading
- Under section 323 (1) of the Companies Act if in the course of winding up it appears that any business of the company has been carried on:
- For any fraudulent purpose or
marto answered the question on February 7, 2019 at 05:40
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(a) Joe owns 2000 shares in Lotto Limited and 1000 shares in Jolles Ltd. He sells all his shares in Lotto Limited to Janet and...
(Solved)
(a) Joe owns 2000 shares in Lotto Limited and 1000 shares in Jolles Ltd. He sells all his shares in Lotto Limited to Janet and 500 shares in Jolles Ltd. to Jeremy. All the shares in Lotto Limited are partly paid up. Six months later, Lotto limited goes into liquidation.
(i) In the absence of any express agreement, discuss the liability of Joe and Janet in relation to the company's debts.
(ii) State the steps to be taken to register the transfer of shareholding from Joe and Jeremy.
(b) Outline the exceptional cases when a member may be held liable in excess of the limited liability which he undertook when he became a member of the company
Date posted:
February 7, 2019
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Answers (1)
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(i)State the circumstances under which the objects clause of a company may
be altered
(ii) Explain the procedure to be followed in altering...
(Solved)
(i)State the circumstances under which the objects clause of a company may
be altered
(ii) Explain the procedure to be followed in altering the objects clause.
Date posted:
February 7, 2019
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Answers (1)
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In what way does the decision in the case of Macaura Versus Northern Assurance
Company Limited (1925) illustrate the corporate entity theory?
(Solved)
In what way does the decision in the case of Macaura Versus Northern Assurance
Company Limited (1925) illustrate the corporate entity theory?
Date posted:
February 7, 2019
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Answers (1)
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Tama Quin Ltd., a company manufacturing pharmaceutical drugs is about to make a new issue of 400,000 shares of Sh. 40 each at the current...
(Solved)
Tama Quin Ltd., a company manufacturing pharmaceutical drugs is about to make a new issue of 400,000 shares of Sh. 40 each at the current market price of Sh. 50 each.
The prospectus states: 'The company has just patented the manufacture of a drug that cures malaria.'
Jacob White, the managing director of the company is interviewed on television and he states that the news to be released shortly will demonstrate a great break-through in the control of malaria. He also stated that the company was the only one with modern technical knowledge of this great invention. As a result there is over-subscription of the shares.
Allan, who has not read the prospectus, applied for shares and is allotted 2000 at the price of Sh. 50 each.
Betty, who read the prospectus, is not allotted any shares but buys 3000 shares at the stock exchange at Sh. 60 per share.
Charles, who read the report of the interview in the national newspaper, bought 5000 shares at the stock exchange at Sh. 55 per share.
In the meantime, the patents are found not to be original and are revoked. The shares fall in value to Sh. 10 per share.
David who owned 10,000 shares in the company long before the new issue is disappointed as he believes the publicity has caused the shares to fall in price (value).
Advise Allan, Betty, Charles and David
Date posted:
February 6, 2019
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Answers (1)
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(b)
(i)State the circumstances under which the objects clause of a company may
be altered.
(ii) Explain the procedure to be followed in...
(Solved)
(b)
(i)State the circumstances under which the objects clause of a company may
be altered.
(ii) Explain the procedure to be followed in altering the objects clause.
Date posted:
February 6, 2019
.
Answers (1)
-
In what way does the decision in the case of Macaura Versus Northern Assurance
Company Limited (1925) illustrate the corporate entity theory.
(Solved)
In what way does the decision in the case of Macaura Versus Northern Assurance
Company Limited (1925) illustrate the corporate entity theory.
Date posted:
February 6, 2019
.
Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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(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
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Answers (1)
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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
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Answers (1)
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What happens to a floating charge when it crystallizes?
(Solved)
What happens to a floating charge when it crystallizes?
Date posted:
February 6, 2019
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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Distinguish between a corporation sole and a corporation aggregate.
(Solved)
Distinguish between a corporation sole and a corporation aggregate.
Date posted:
February 6, 2019
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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)