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Formation of companies

Unit: Company law

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August 2025

1 Questions
Question 1c
​ ​​In relation to formation of companies in your country, discuss FIVE differences between a memorandum of association and articles of association.


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April 2025

1 Questions
Question 1b
​​John Martin wishes to register a company that will offer cleaning services. He is not sure on how to select a name for the company as he is afraid that the name he wishes to use might be rejected. He has come to you for advice. 

 Required: 
 With reference to the above statement, describe SIX circumstances when the registrar of companies might reject a proposed name.


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December 2024

2 Questions
Question 1c
​​A Memorandum of Association was judicially defined by Lord Cairns in Ashbury Railway Carriage Co Ltd vs. Riche as "the charter" which defines the limitation of the powers of a company to be established under the Act. 

 With reference to the above statement, analyse FOUR rules concerning the legal effect of the memorandum of association of a company.


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Question 4b
​​Examine FIVE exceptions to the doctrine of indoor management.


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August 2024

2 Questions
Question 5b
​​With regard to formation of a company, highlight THREE fiduciary duties of a promoter.


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Question 1c
​​Analyse SIX circumstances under which a company could repudiate pre-incorporation contracts.


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April 2024

2 Questions
Question 1c
​​Examine SEVEN rules governing the alteration of company status in your country.


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Question 3c
​​With reference to incorporation of companies: 

(i) Explain the doctrine of adoption.

(ii) Describe how the doctrine of adoption relates to pre-incorporation contracts.


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December 2023

3 Questions
Question 7d
​​Patricia Wahito wishes to form a company and has approached you seeking guidance on the choice of a name. She has read from the Companies Act that the name chosen must not be undesirable in the opinion of the Registrar. 

Required: 
(i) With reference to the above statement, advise Patricia Wahito on FOUR matters to consider in choosing a name for her company. 

(ii) Identify FOUR places and documents upon which the company’s name must be displayed.


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Question 1d
​​Tom Bwire is acting as a promoter of Tomtom Company Ltd. and is negotiating a lease agreement for office space at Upper Hill in Nairobi. 

 Describe what Tom should do to ensure that once the company is formed, the lease agreement does not bind him personally.


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Question 1c
​​Discuss the legal responsibilities and potential liabilities that promoters may incur during the pre-incorporation stage of a company.


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August 2023

3 Questions
Question 2d
​​Describe THREE types of company prospectuses.


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Question 1d
​​Outline FOUR contents of a certificate of incorporation of a company.


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Question 1a
​​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.


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April 2023

1 Questions
Question 1a
​​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 company. 
Explain to the committee the matters below: 

(i) The FIVE legal characteristics of the entity that will be registered.

(ii) FIVE particulars to be included in the company’s Memorandum of Association.


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December 2022

1 Questions
Question 1a
​​Highlight FIVE rules relating to the naming of companies.


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August 2022

1 Questions
Question 3a
​​With reference to formation of companies: 

(i) Outline six statutory documents required to form a private company. 

(ii) Highlight four common law duties of a promoter.


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December 2021

2 Questions
Question 6b
​​John and Peter are in partnership business. They have decided to incorporate their business. Please advise them on the following matters: 

(i) Three differences between a private company limited by shares and a public one. 

(ii) Three requirements in order for their articles of association to be registered.


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Question 1a
​​ With reference to formation of companies: 

(i) Summarise four ways through which a company might alter its status. 

(ii) Outline two ways through which company documents might be validly executed.


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September 2021

2 Questions
Question 2
​​In the context of formation of companies: 

(a) Highlight five ways through which a promoter might receive remuneration. 

(b) Explain five legal effects of registration of articles of association of a company. 

(c) John bought shares from Kibao Company Limited. Later on, he discovered that his name was missing from the register of members of the company. The Corporation Secretary has refused to rectify the omission. John is aggrieved and seeks your advice. 

Advise John on the following: 

(i) Two persons who could sue for rectification of the register of members. 

(ii) Four orders that the court might issue with respect to an application for rectification of the register.


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Question 1a
​​Tom Jerry and Marsha Bear are purposing to form a joint business venture. They are debating whether to form a limited liability company (LLC) or a limited liability partnership (LLP). Their knowledge on these forms of business associations is limited and they have thus approached you for guidance. 

Required: 
Advise Tom Jerry and Marsha Bear on five differences between a limited liability company (LLC) and limited liability partnership (LLP).


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May 2021

1 Questions
Question 2c
​​With reference to both case law and common law, discuss five rules governing pre-incorporation contracts.


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November 2020

1 Questions
Question 1a
​​In relation to formation of companies:

(i) Explain four common law duties of a promoter. 

(ii) Discuss three rules that govern pre-incorporation contracts.


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November 2019

1 Questions
Question 2a
​​With reference to formation of companies:

(i) Explain the meaning of the term "promoter".

(ii) Highlight three fiduciary duties of a promoter of a company.

(iii) Outline two remedies to the company for breach of fiduciary duty by promoters.


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May 2019

1 Questions
Question 3b
​​In the context of formation of companies in your country: 

(i) Outline five particulars that might be stated in an application for registration of a company. 

(ii) Describe the prescribed format of the articles of association.


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November 2018

3 Questions
Question 1a
​​On 1 September 2018, Peter Kioko decided to form a company under the name PK Ltd. Before the company was duly formed, Peter Kioko made a contract for the company in which PK Ltd. received a down payment of Sh.500,000 for the supply of household items to Fanika Ltd. PK Ltd. has since been incorporated but remains in breach of the said contract. Fanika Ltd. feels aggrieved and has approached you for legal advice. 

Required: 
Analyse the legal principles applicable in the above case and advise Fanika Ltd.


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Question 1b
​​Discuss the doctrine of ultra vires in relation to the memorandum of association of a limited company.


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Question 3c
​​(i) Outline four undertakings that would amount to promotional acts of a company during its formation.

(ii) Explain four consequential attributes that flow from incorporation of unincorporated associations. 


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May 2018

1 Questions
Question 1a
​​With reference to formation of companies:

(i) Explain the meaning of the term "articles of association".

(ii) Describe four effects of registration ofthe articles of association of a company.

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


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November 2017

1 Questions
Question 5b
​​(i) Explain three categories of public companies.

(ii) Jairo Chai would like to start a company. He has approached you as a student of company law to guide him through the process.

With reference to the above statement, describe the procedure of registering a limited liability company.


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November 2016

3 Questions
Question 2a
​​ Explain the general effect of pre-incorporation contracts.


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Question 6b
​​With reference to the procedure for registration of companies:

(i) Describe the requirements that an application for registration must meet before the registrar can approve it.

(ii) Highlight the requirements that a certificate of registration must comply with.


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Question 2b
​​Discuss how a promoter might overcome the liability of pre-incorporation contracts.


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May 2016

3 Questions
Question 6a
​​ Discuss five legal consequences of incorporation.


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Question 5a
​​Basil Peters, a Canadian National intends to register a branch office in Nairobi. The head office will be based in Canada. The company once established will carry out Biometric research and does not intend to declare profits. All proceeds of trading will be used for further research. The company is proposed to be a small scale company with about ten specialist researchers. The company once registered, hopes to raise shillings sixty million over a two year period from a selected group of investors to meet the company's research needs. 

Advise Basil Peters on the following: 

(i) The type of company that would be suitable to set up and why. 

(ii) The documents required to accompany the application for registering the foreign company.


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Question 3b
​​(i) Define the term "promoter".

(ii) Describe four legal rights of an incorporated company against promoters who sold their property to the company at a profit while it was in the process of formation.


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November 2015

1 Questions
Question 4c
​​ Discuss three effects of the ultra vires doctrine.


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Question 4b
​​Explain four acts or omissions which might give rise to criminal liability in respect of a prospectus.


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Question 2b
​​Tom and Harry were in the process of incorporating a company called Foot Shoes Itd. The objects of the company were to make and sell shoes. Before the process of incorporation was complete, Tom entered into a contract with Clean Leather Ltd. under which Clean Leather Ltd. agreed to supply Foot Shoes Ltd. with leather worth one million shillings. 

The price was to be paid in four installments of two hundred and fifty thousand shillings each, over a period of one year. 

Tom signed the contract as follows: "Signed by Tom, on behalf of Foot Shoes Ltd.". By the time the leather was delivered, Foot Shoes Ltd. had been incorporated. 

However, after the second installment had been paid, Foot Shoes Ltd. was unable to pay the balance. 

Advise Clean Leather Ltd. on how to recover the outstanding amount of five hundred thousand shillings.


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Question 1c
​​Explain the restrictions imposed on promoters of a company in relation to choice of name.


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Question 1b
​​Outline the contents of a prospectus issued in Kenya by a foreign company.


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Question 1a
​​ (i) Explain the meaning of the term "promoter" in the context of company law. 

(ii) Discuss three duties of a promoter of a company.


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