THURSDAY: 27 April 2023. Morning Paper. Time Allowed: 3 hours. Answer any FIVE questions. ALL questions carry equal marks. Do NOT write anything on this paper.
QUESTION ONE
1. A group of four graduates have decided to form a small business firm to deal in import and export trade. You have been appointed as a member of the technical committee to help in registering the firm as a limited liability Explain to the committee the matters below:
- The FIVE legal characteristics of the entity that will be (5 marks)
- FIVE particulars to be included in the company’s Memorandum of (5 marks)
2. With respect to the nature and classification of companies, distinguish between a registered company and a:
- Statutory corporation (1 mark)
- Patnership(4 marks)
3. Outline FIVE instances under common law where the veil of incorporation may be lifted (5 marks)
(Total: 20 marks)
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QUESTION TWO
1. With respect to company meetings, answer the following questions:
- Define a “special notice”. (2 marks)
- Highlight TWO circumstances under which a special notice would be (4 marks)
- Describe FOUR matters that require to be determined by members through a special (4 marks)
2. In the context of Company Directors:
- Explain the indoor management (4 marks)
- Identify what constitutes Directors’ (6 marks)
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(Total: 20 marks)
QUESTION THREE
1. In relation to company membership:
- Describe TWO rules which a company might use to remove from its register of members details of a former (4 marks)
- Explain the circumstances under which a court might order rectification of the register of members of a (2 marks)
- Explain FOUR disadvantages that a minority shareholder may face in bringing a derivative (4 marks)
2. Describe FIVE responsibilities of a company (10 marks)
(Total: 20 marks)
QUESTION FOUR
1. The general rule is that an auditor is only liable to the company for professional Discuss THREE circumstances under which the auditor of a company might be liable to third parties for professional negligence. (6 marks)
2. Outline THREE items contained in a company’s auditor (3 marks)
3. Directors are required to prepare a director’s report to accompany the financial statement presented to members.
Highlight FOUR matters captured in a director’s report. (8 marks)
4. Identify THREE ways in which the appointment of a Court appointed inspector may be (3 marks)
(Total: 20 marks)
QUESTION FIVE
1. Describe THREE circumstances under which a company is allowed to pay commission on (6 marks)
2. Highlight the circumstances under which a company might decline to register a transfer of (6 marks)
3. Highlight the particulars contained in a company (8 marks)
(Total: 20 marks)
QUESTION SIX
1. Highlight FOUR grounds upon which the commissioner of insurance might petition for the winding up of a company (4 marks)
2. Highlight SIX powers that a liquidator can exercise without the sanction of the (6 marks)
In the context of foreign companies:
- Highlight FOUR particulars contained in a certificate of registration of a foreign (4 marks)
- Discuss the options available to a foreign company to establish presence in (6 marks)
(Total: 20 marks)
QUESTION SEVEN
1. Highlight FIVE forms of corporate (5 marks)
2. In the context of debt capital, state FIVE advantages of a trust (5 marks)
3. Highlight the documents that a liquidator must lodge with the registrar of companies when making an application for voluntary winding up of a company. (5 marks)
4. With respect to company administration, highlight FIVE powers exercised by an administrator appointed by the (5 marks)
(Total: 20 marks)
