COMPANY LAW
GENERAL OBJECTIVES
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply and comply with the provisions of company law in relevant circumstances and environments.
LEARNING OUTCOMES
A candidate who passes this paper should be able to:
- Apply legal principles relating to formation of companies
- Evaluate the rights and obligations of members and shareholders
- Comply with the legal principles governing liquidation of corporates and restructuring
- Comply with the legal principles relating to companies incorporated outside Kenya
- Ensure books of account are prepared in compliance with the law.
CONTENT
7.1 Nature and classification of companies
- Nature and characteristics of a company
- Types of companies
- Principle of legal personality and veil of incorporation
- Distinction between companies and other forms of business associations, sole proprietorships, partnerships and cooperative societies.
7.2 Formation of companies
- Promoters and pre-incorporation contracts
- Process of forming a company
- Memorandum and articles of association
- Certificate of incorporation
- Effects of incorporation
7.3 Membership of a company
- Acquisition of membership
- Register of members
- Rights and liabilities of members
- Cessation of membership
7.4 Shares
- Classes of shares
- Variation of class rights
- Share certificates
- Issue and allotment
- Transfer and transmission
- Transfer of shares under central depository system
- Mortgaging and charging of shares
7.5 Share capital
- Meaning and types of share capital
- Raising of share capital
- Prospectus/information memorandum
- Maintenance of capital
- Alteration of capital
- Dividends
7. 6 Debt capital
- Borrowing powers of the company
- Debentures
- Charges
- Registration of charges
- Remedies of debenture holders
7.7 Company meetings
- Nature and classification of company meetings
- Essentials of a valid meeting
- Voting
- Resolutions
7.8 Directors
- Qualifications, appointment and disqualification
- Powers and duties of directors
- Removal and vacation of office
- Register of directors
- Remuneration of directors
- Loans to directors
- Compensation for loss of office
- Disclosure of director’s interest in contracts
- The rule in Turquand’s case/Indoor Management rule
- Insider dealing
7.9 The company secretary
- Qualification, appointment and removal
- Powers and duties of the company secretary
- Liability of the company secretary
- Register of secretaries
7.10 Auditors
- Qualification, appointment and removal
- Remuneration of auditors
- Powers and duties
- Rights and liabilities
7.11 Company accounts, audit and investigation
- Books of accounts
- Form and content of accounts
- Group accounts
- Director’s report
- Auditor’s report
- Annual returns
- Investigation of company affairs
- Appointment and powers of inspectors
- Inspector’s report
7.12 Corporate restructuring
- Need for restructuring
- Mergers,
- Post merger reorganisation
- Takeovers and acquisitions
- Schemes of arrangement and compromises
- Reconstruction
7.13 Receivership and liquidation of companies
- Meaning of receivership
- Appointment and vacation of office
- Powers and duties of a receiver
- Termination of receivership
- Meaning of liquidation
- Types of liquidation
- Appointment, powers and duties of liquidators
- Discharge of liquidators
- Distribution of assets and dissolution of companies
7.14 Companies incorporated outside the country
- Process of registering a company
- Certificate of registration
- Power to hold land
- Registration of charges
- Accounts of foreign companies
- Service of process and notices on foreign companies
- Returns
- Penalties
- Cessation of business
7.15 Emerging issues and trends
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