1. a) Distinguish between a company and a cooperative society.

(8 marks)
b) Citing relevant decided cases, explain the circumstances under which a
court would lift the veil of incorporation. (12 marks)

2. Kimoli and Anjere wish to venture into business. However, they are not sure
whether to trade as a partnership or a private limited company and seek your
advise.
a) Advise them on the disadvantages of trading as a private limited company.
(12 marks)
b) Highlight the legal consequences of incorporation of a company. (8 marks)

3. A company's shares can be issued at a discount, premium or par value.

Discuss the statement. (12 marks)
Explain the provisions which govern the issue of shares of a company for the
purposes other than raising capital. (8 marks)

4. With reference to company law, discuss the provisions which govern the
removal of a director from office before expiry of his tenure. (20 marks)

5. a) Explain the reasons why a company would resort to take over, merger or
a reconstruction.
(10 marks)
b) Highlight the advantages of instituting a scheme of arrangement. (10
marks)

6. a) In relation to the law relating to meetings under company law, discuss

the rules which govern the following:
1. Voting by proxy (4 marks)
2. Revocation of authority of proxy. (6 marks)
b) Explain the rights of auditor of a company. (10 marks)

7. A public company in the mining business made an issue of its shares to the
public at sh.10 per share.
In the prospectus, the company stated that " the company has discovered a
booming market in the European Union member countries for its minerals"
The company had never marketed its minerals in the European Union
member countries. Timothy, without reading the prospectus applied for shares
and was allotted 1000 shares at sh.10 each.
Mary read the prospectus, applied for the shares but was not allotted any
shares. Later on, Mary bought 2000 shares at the stock exchange at sh.25
each.
Peter, an old shareholder in the company owned 500 shares even before the
company made the issue. He is disappointed with the price at which the new
offer for sale was made claiming that this had destabilized the price of the
company's shares.
Required:
a) Explain the legal principles applicable in the above case and advise
Timothy, Peter and Mary. (12 marks)
b)Timothy prepared a transfer form to transfer 100 shares only to his wife
Rose presented the form to the company. The company erroneously
transferred the entire 1000 shares to Timothy's wife.
Timothy is aggrieved and seeks your legal advise.
Discuss the legal principles in the case and advise Timothy. (8 marks)

8. a. A company is regarded as a legal person, distinct from its members. The

fact that a person holds all or substantially all of the shares in a company does
not make the company's business that person's business in the eyes of the
law.
Discuss the above statement (12mks.)
b. Explain the legal provisions governing pre-incorporation contracts (8mks.)

9.a. Explain the meaning of the term "articles of association" as used in

company law (4mks)
b. Once signed and registered, the articles of association of a company have
effects on both the shareholders and the company itself. Describe these
effects as provided in the Companies Act (6mks.)
c. Outline the provisions of the Companies Act which govern the alteration of
the articles of association of a company (5mks.)
d. Highlight five advantages of a private company over a public company
(5mks)

10. a. Explain the meaning of the term "floating charge" as used in Company
law.(4mks.)
b. Discuss the factors that distinguish a debenture from a share (8mks.)
c. Every trading company is deemed to have borrowing powers. However, the
law imposes some restrictions on these powers.
With reference to the above statement, explain:
(i) The restrictions on borrowing by a company (2mks)
(ii) The legal effect of ultra vires borrowing6mks

11.A. Describe the powers of the Commissioner for Co-operative

Development during liquidation of a co-operative society (10mks)
b. The members of Changarawe Co-operative Society Ltd wish to change
their society name to Mawe. Advise the members on the following:
(
i) Procedure to be followed in order to change the name (6mks)
ii. Legal effect of the change of name (4mks.)

12.A. With reference to meetings of directors of a company, explain the

following:
(i) Meaning of the term "special resolution" (2mks)
(ii) Matters that require a special resolution (10mks.)
b. Highlight the circumstances under which a director of a company would be
disqualified from holding office (8mks.)

13.a. Describe the procedure that a person should follow in order to transfer
his shares to another shareholder (8mks)
b. Sharp Kioko transferred his shares in Mwamba Ltd. to Faith Kazuri six
months ago. The shares were partly paid for. Nine months after the transfer,
Mwamba Ltd. went into liquidation. You have been appointed the liquidator of
Mwamba Ltd. Analyze the case and advice Sharp Kioko on his liability for the
debts of Mwamba Ltd.( 12mks)

14.a. Analyze the provisions of the Companies Act which govern the
appointment of auditors of a company (10mks.)

b. Explain the purpose of a profit and loss account of a company (6mks.)

c. With reference to company law, outline the books of account that a
company is required to maintain (4mks.)
15a. What disadvantages would one encounter when running a business as a
company? (10mks)
b. Outline the process of registering a co-operative society under the cooperative Societies Act (10mks)

16 Section 13 (1) of the Act allows companies to alter their articles of

association.
a. Outline the various restrictions both statutory and common law relating to
the alteration of the company's articles (10mks)
b. Companies before incorporation may engage into preliminary contracts
(pre-incorporation contracts). Outline the various rules relating to the
enforcement of such contracts (10mks)

17.a. Highlight the terms implied in a contract of sale of shares between a

transferor and a transferee (6mks)
b. In relation to company financing differentiate between debentures and
shares (6mks)
c. In relation to issuing of shares by companies, explain the rules that govern
allotment of shares (8mks)

18.Mazao Ltd has adopted table A as its articles:

a. Due to the companies drop in performance the company directors have not
recommended any dividend this year. During the company's AGM the
members agitated that no dividend would be paid and passed a resolution
recommending and declaring a dividend of Sh. 0.8 per share be paid. The
directors ignored this directive only to learn that the G.M intends to go to court
to compel the board of directors to pay the dividend. Using decided cases
advice the directors on their legal position (8mks)
b. Identify the various categories of persons who may not be appointed as
director (s) of a company (12mks)

19.a. Explain the meaning of the following terms:

i. Poll vote (4mks)
ii. Proxy vote (4mks)
b. In relation to the law of meetings indicate the business of the company that
requires each of the following types of resolution:
i. Ordinary resolution (4mks)
ii. Special resolution (4mks)
iii. Resolution requiring special notice (4mks)

20.a. Highlight the contents of a statutory report (10mks)

b. Outline the various rules that govern the payment of dividends by
companies (10mks)

21.a. Outline the various grounds under which a company may be wound up
by the coup under just and equitable grounds (12mks)
b. Highlight the various powers the liquidator may exercise without the
sanction of the court (8mks)
22. Explain the restrictions imposed on the choice of name of a company (10
Marks)
b) Discuss various statutory and common law provisions under which a
corporate veil of incopration may be lifted (10 Marks)
23. a)Discuss the proper plaintiff Role citing at least two cases.
[ 15 marks]
b)Discuss the various modes of winding up as provided in S.219 of the
Companies Act[ 5 marks]
24 a) While every person who deals with the company to know the contentsof
Memorandum and Articles of Association, it is assumed that any Internal
procedures required for purposes of Validating of action of the company is
complied Discuss[ 15 marks]
b) Discuss the fiduciary position of a promoter. 5 Marks
25. a) Come And Talk To Us Company Limited, a duly registered public
company, has
approached you as a legal expert to advise them on how they can widen their
membership base. Advise them on how they may achieve their objective.
(10mks)
b) Discuss the defences available to a director/promoter who has been sued
for a
mis-statement in a prospectus. (6mks)
c) Discuss the four main grounds by which one may be disqualified from being
director of a company. (4mks)
26 a) Discuss the contents in a Memorandum of Association. (10mks)
b) What are the grounds of disqualifying a person from being a company

director/(5mks)
c) What are the restrictions imposed by courts on the power of a company to
alter its Articles of Association? (5mks)
27 a) Explain what a prospectus is, in company law. (5mks)
b) What are the contents of a prospectus? (10mks)
c) Discuss the fiduciary position of a promoter? (5mks)
28. a) Explain the doctrine of ultra vires and state the purposes of such a
doctrine (6 Marks)
b) Njoroge, Odhiambo and Makau are the directors of United Technology Ltd.
The Company was formed with the object of computer training. However due
to power rationing, the companys business has fallen below the expected
productivity and is threatened with closure. In order to keep afloat, the three
directors approached Rahisi Bank Ltd for an overdraft facility of Ksh
2,000,000/= to establish an off-license bar and restaurant within the city
centre.The credit manager granted the loan. However, the company has run
into financial difficulties and is unable to repay the loan.
Discuss the legal position of the overdraft facility and the banks ability to
recover the same from United Technology Ltd. (8 Marks)
c) Discuss the exceptions to the doctrine of ultra vires (6 Marks)
29 While citing a relevant case, discuss the following statement The general
rule is that shareholders are distinct from the company[ 20 marks]
30. Outline the fundamental duties of the promoters.[ 8 marks]
b)Explain the various ways one may acquire membership.[ 12 marks]
.