December 2021.                                                                                                                 Time Allowed: 3 hours.

Answer any FIVE questions.                                                                                       ALL questions carry equal marks.


1.          Explain four limitations to a director’s powers to act that may be contained in a company’s constitution. (8 marks)

2.          Describe six general duties of a director under the Companies Act, 2015 or equivalent legislation.                (12 marks)

(Total: 20 marks)



1.          Highlight four reasons that form a basis for a derivative claim in Kenya.                (4 marks)

2.          Outline the information that should appear in a company’s register of members.                (6 marks)

3.          Explain five legal requirements for the beneficial owner’s register in Kenya.                (10 marks)

(Total: 20 marks)



1.          Distinguish between an “ordinary resolution” and “special resolution”.                (4 marks)

2.          Jane is a director of XYZ Limited, a public limited company and would like to call for a general meeting of the company. Give your professional advice to Jane about the following:

The four methods through which XYZ Limited can give a notice of the general meeting to its members. (4 marks)

The legal requirements in Kenya for the meeting if the notice is issued on the company’s website. (12 marks)

(Total: 20 marks)



1.          Explain three rights of a company’s auditor in relation to a company’s general meetings.                (6 marks)

2.          Explain three requirements for a notice by a company’s members’ statement about audit concerns.                (6 marks)

3.          Give four circumstances under which an auditor in office will not be considered as re-appointed if no appointment of an auditor is made at the end of a term of appointment.                                                                                        (8 marks)

(Total: 20 marks)



1.          Give five documents that form a quoted company’s annual reports.                (10 marks)

2.          Explain three requirements for a company’s proper accounting records.                (6 marks)

3.          Highlight two contents of a company’s financial records.                 (4 marks)

(Total: 20 marks)



1.           Explain three items that an auditor would investigate in a company’s financial records to enable the auditor form an opinion about a company’s financial statements.                                                                                   (6 marks)

2.          Explain which court appoints an inspector to investigate a company’s affairs and what circumstances may lead to such an appointment.                                                                                                                                  (14 marks)

(Total: 20 marks)



With respect to investigation of a company’s affairs and mergers:

1.          Identify the court that has powers to appoint an inspector.                (2 marks)

2.          Describe six circumstances that might lead to such an appointment in (a) above.                (12 marks)

3.          Discuss the types of information that should be contained in the draft terms of scheme for a proposed merger. (6 marks)

(Total: 20 marks)

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