Company Law August 2023 Past paper

THURSDAY: 24 August 2023. Morning Paper. Time Allowed: 3 hours.

Answer any FIVE questions. ALL questions carry equal marks. Do NOT write anything on this paper.


1. Explain THREE ways in which persons intending to form a company may avoid personal liability on contracts they make on behalf of the proposed company. (6 marks)

2. Summarise any FOUR legal duties of a company’s external auditor. (4 marks)

3. The general rule is that companies must not give loans to directors. However, there are certain circumstances under which a company can give loans to a director.

In relation to the above statement, examine THREE such circumstances. (6 marks)

4. Outline FOUR contents of a certificate of incorporation of a company. (4 marks)

(Total: 20 marks)



1. Distinguish between “participative preference shares” and “non-participative preference shares”. (4 marks)

2. Highlight FOUR statutory registers that must be maintained and kept at the registered office of a company. (4 marks)

3. A company can be wound up for failure to pay its debts. Explain to Edna Makena, one of the creditors of Ushindi Co. Ltd, THREE circumstances under which a company may be deemed unable to pay its debts. (6 marks)

4. Describe THREE types of company prospectuses. (6 marks)

(Total: 20 marks)



1. Explain THREE pieces of information that a Director’s report must contain once a company has issued debentures in any financial year. (6 marks)

2. Summarise SIX contents of a notice of a general meeting. (6 marks)

3. List FOUR fiduciary duties of company directors. (4 marks)

4. A private company need not have a company secretary.

Explain TWO ways in which service and actions are carried out when a private company elects not to have a company secretary. (4 marks)

(Total: 20 marks)



1. State SIX elements of proper accounting records under company law. (6 marks)

2. Highlight SIX offences relating to liquidation of companies. (6 marks)

3. Evaluate FOUR ways in which a company can reorganise its share capital. (8 marks)

(Total: 20 marks)



1. In relation to investigation of company affairs:

Explain the purpose of an investigation into a company’s affairs under company law. (4 marks)

Identify FOUR parties that have the authority to initiate an investigation of a company’s affairs under
company law. (4 marks)

Highlight SIX consequences of an adverse finding from investigation of a company’s affairs. (6 marks)

2. Describe THREE reporting requirements for foreign companies operating in Kenya. (6 marks)

(Total: 20 marks)



1. In relation to corporate restructuring, explain the following terms:

Compromises. (2 marks)

Arrangements. (2 marks)

Reconstructions. (2 marks)

Takeovers. (2 marks)

2. Discuss THREE advantages and THREE disadvantages of the principle of legal personality. (12 marks)

(Total: 20 marks)



1. Describe FOUR types of opinions that can be issued in an Auditor’s report. (8 marks)

2. With specific reference to beneficial ownership:

Explain THREE criteria that a beneficial owner must satisfy. (6 marks)

State SIX particulars to be entered in the register of beneficial owners as prescribed by the regulations on
beneficial ownership. (6 marks)

(Total: 20 marks)

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