Company Law::Pastpapers


answer any FIVE questions


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)


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)


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)


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


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)


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)


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.

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)



a) A company is regarded 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. (12 marks)

b) Explain the legal provisions governing pre-incorporation contracts. (8 marks)


a) Explain the meaning of the term "articles of association" as used in company law.
(4 marks)

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. (6 marks)

c) Outline the provisions of the Companies Act which govern the alteration of the articles of association of a company. (5 marks)

d) Highlight five advantages of a private company over a public company. (5 marks)


a) Explain the meaning of the term "floating charge" as used in company law. (4 marks)

b) Discuss the factors that distinguish a debenture from a share. (8 marks)

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:

1. The restrictions on the borrowing by a company. (2 marks)
2. The legal effect of ultra vires borrowing. (6 marks)


a) Describe the powers of Commissioner for Cooperative Development during liquidation of a cooperative society. (10 marks)

b) The members of Changamwe Cooperative Society Ltd wish to change the name of their society to Mawe Cooperative Society Ltd and seek your legal advice.

Advise the members on the following:

1. Procedure to be followed in order to change the name. (6 marks)
2. Legal effect of the change of name. (4 marks)


a) With reference to meetings of directors of a company, explain the following:
1. Meaning of the term "special resolution"
2. Matters that require a special resolution.

b) Highlight the circumstances under which a director of a company would be disqualified from holding office. (6 marks)


a) Describe the procedure that a person should follow in order to transfer his shares to another shareholder. (8 marks)

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 advise Sharp Kioko on his liability for the debts of Mwamba ltd.
(12 marks)


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

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

c) With reference to company law, outline the books of account that a company is required to maintain. (4 marks)