CPA › Company law › Nature and classification of companies
Back to Unit

Nature and classification of companies

Unit: Company law

Premium Topic Resources

Sign in to download the full Topic PDF and enable offline revision mode.

Login to Access
Join the community! 550+ students upgraded in the last 24 hours. Limited Discount Seats Available

August 2025

 1 Questions
Question 1a
​​Enumerate FOUR limitations of a private limited company.


Answers and Explanations are locked.

Login to View Answer

April 2025

 1 Questions
Question 1a
​​Your friend intends to start running a medium sized enterprise as a sole proprietor in his local town. He has come to you for advise on the possible challenges he might encounter as a result of operating his business. 

Required: 
 Advise your friend on FOUR possible challenges about the form of business he intends to operate.


Answers and Explanations are locked.

Login to View Answer

December 2024

 2 Questions
Question 1b
​​Explain TWO differences between a “holding company” and a “subsidiary company”.


Answers and Explanations are locked.

Login to View Answer
Question 1a
​​Outline FOUR characteristics that define the legal framework within which companies operate in Kenya.


Answers and Explanations are locked.

Login to View Answer

August 2024

 3 Questions
Question 2a
​​Highlight THREE characteristics of a company limited by guarantee.


Answers and Explanations are locked.

Login to View Answer
Question 1b
​​Pizza World Enterprises Ltd., is a small family-owned company operating a chain of restaurants. The company has of late been facing financial difficulties. One reason being that the company’s directors have been using the company’s funds for personal expenses. As a result, the company has not been honouring its obligations to its creditors. The creditors are now contemplating suing the company directors. 

Required: 
Discuss THREE possibilities of the court lifting the veil of incorporation when the case is brought in a court of competent jurisdiction.


Answers and Explanations are locked.

Login to View Answer
Question 1a
​​With reference to companies, explain the term “body corporate”.


Answers and Explanations are locked.

Login to View Answer

April 2024

 1 Questions
Question 3b
​​Distinguish between “Private Limited Company” and “Public Limited Company”.


Answers and Explanations are locked.

Login to View Answer

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.


Answers and Explanations are locked.

Login to View Answer
Question 1a
​​Explain the concept of legal personality in the context of corporate entities.


Answers and Explanations are locked.

Login to View Answer
Question 1b
​​Examine THREE classifications of companies on the basis of liability.


Answers and Explanations are locked.

Login to View Answer

August 2023

 1 Questions
Question 6b
​​Discuss THREE advantages and THREE disadvantages of the principle of legal personality.


Answers and Explanations are locked.

Login to View Answer

April 2023

 3 Questions
Question 1c
​​Outline FIVE instances under common law where the veil of incorporation may be lifted.


Answers and Explanations are locked.

Login to View Answer
Question 1b
​​With respect to the nature and classification of companies, distinguish between a registered company and a: 

(i) Statutory corporation. 

(ii) Partnership.


Answers and Explanations are locked.

Login to View Answer
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.


Answers and Explanations are locked.

Login to View Answer

December 2022

 4 Questions
Question 1d
​​Identify FOUR features of an unlimited company.


Answers and Explanations are locked.

Login to View Answer
Question 1c
​ ​​​​​Explain the difference between a “company limited by shares” and a “company limited by guarantee.”


Answers and Explanations are locked.

Login to View Answer
Question 1b
​​Describe the effect of the principle elucidated by Lord MacNaghten in the case of Salomon-V-Salomon.


Answers and Explanations are locked.

Login to View Answer
Question 1a
​​Highlight FIVE rules relating to the naming of companies.


Answers and Explanations are locked.

Login to View Answer

August 2022

 1 Questions
Question 1a
​(i) Explain three advantages of a public company over a private company. 

(ii) Distinguish between “corporation sole” and “corporation aggregate”.


Answers and Explanations are locked.

Login to View Answer

April 2022

 4 Questions
Question 6b
​​Summarise five provisions governing amendment of articles of association of a company.


Answers and Explanations are locked.

Login to View Answer
Question 1c
​​A person dealing with a company is entitled to assume in the absence of facts putting him in doubt that there has been due compliance with all matters of internal management and procedure required by articles of association. 

With reference to the rule in Royal British Bank v. Turquand, summarise five exceptions to the above statement.


Answers and Explanations are locked.

Login to View Answer
Question 6d
​​
 Distinguish between a "private" and a "public" company.


Answers and Explanations are locked.

Login to View Answer
Question 7c
​​ Describe six grounds under which the veil of incorporation might be lifted.


Answers and Explanations are locked.

Login to View Answer

December 2021

 1 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.


Answers and Explanations are locked.

Login to View Answer

May 2021

 3 Questions
Question 4c
​​Highlight three conditions for a company to be deemed a "small company".


Answers and Explanations are locked.

Login to View Answer
Question 2b
​ ​​Highlight four differences between a "private company" and a "public company".


Answers and Explanations are locked.

Login to View Answer
Question 2a
​​ Explain three characteristics of a company.


Answers and Explanations are locked.

Login to View Answer

November 2020

 1 Questions
Question 7b
​​Explain the distinguishing features of the following types of companies:

(i) Companies limited by guarantee.

(ii) Private companies.

(iii) Public companies.


Answers and Explanations are locked.

Login to View Answer

November 2019

 1 Questions
Question 3a
​​A company is a legal person and is distinct from its members. This principle is regarded as a curtain, a veil or shield between the company and its members. This veil can be lifted by the Courts and statutes.

Describe the circumstances for lifting of the veil by:

(i) The Courts.

(ii) The Statutes.


Answers and Explanations are locked.

Login to View Answer

May 2019

 1 Questions
Question 2a
​​(i). Joanne wishes to register a business enterprise but she knows very little about business associations. She mulls over various choices including partnerships, sole proprietorships and limited companies. Joanne is unable to make up her mind on the type of business to establish and seeks your advice.

Required:

Advise Joanne on eight advantages of sole proprietorships over the other forms of business structures.

(ii). Distinguish between a "corporation sole" and "corporation aggregate."



Answers and Explanations are locked.

Login to View Answer

November 2018

 4 Questions
Question 5a
​​ With reference to the types of companies, summarise three provisions relating to the liabilities of the members of a company.


Answers and Explanations are locked.

Login to View Answer
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. 


Answers and Explanations are locked.

Login to View Answer
Question 3b
​​Describe four reasons why a court in exercising its inherent jurisdiction for the sake of justice might disregard the principle of legal personality.


Answers and Explanations are locked.

Login to View Answer
Question 3a
​ ​​Explain the distinction between "statutory companies" and "non-statutory companies".


Answers and Explanations are locked.

Login to View Answer

May 2018

 1 Questions
Question 7b
​ ​​Cliff, Mohammed and Mwikali have been running the business of supplying stationary to various customers including some government ministries as a partnership trading under the name "Relax Enterprise". They are desirous of converting their business into a limited liability company. 

Explain to them two differences between companies and partnerships.


Answers and Explanations are locked.

Login to View Answer

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.


Answers and Explanations are locked.

Login to View Answer

May 2017

 1 Questions
Question 1a
​​Explain four distinctions between "co-operative societies" and "limited companies".


Answers and Explanations are locked.

Login to View Answer

November 2016

 1 Questions
Question 1a
​​ With reference to classification of companies, explain the meaning of a "holding company" in relation to another company.


Answers and Explanations are locked.

Login to View Answer

May 2016

 1 Questions
Question 2b
​​ Describe five ciassifications of companies under the Companies Act.


Answers and Explanations are locked.

Login to View Answer

November 2015

 2 Questions
Question 7a
​​Discuss five advantages of a private company over a public company.


Answers and Explanations are locked.

Login to View Answer
Question 7b
​​Wanyoro Ltd. is a public company. Its directors have decided to venture into transport business by acquiring a fleet of public service vehicles. They did not notice that this activity is outside its objects clause. The company's chairman. Ann Omesa who owns 10% of the voting shares negotiated a loan which was in excess of the company's issued capital from Joan Mekonge, a financier. 

Joan Mekonge did not refer to any of the company's registered documents nor did she inquire into the purpose to which the money would be put. The money is used by the directors to pay part of the purchase price of the vehicles. The rest of the purchase price remains unpaid. Some members who hold a substantial amount of shares in Wanyoro Ltd. intend to move a resolution to insert into the memorandum, an object permitting the acquisition and use of the vehicles. One of the directors of Wanyoro Ltd. announces that if this is done, he will apply to court to have the new object clause quashed. 

Advise the directors of the company.


Answers and Explanations are locked.

Login to View Answer

Pilot September 2015

 2 Questions
Question 7c
 Distinguish between companies and partnerships as forms of business associations.


Answers and Explanations are locked.

Login to View Answer
Question 2a
​​Discuss five ways in which the veil of incorporation might be lifted under statutory provisions


Answers and Explanations are locked.

Login to View Answer
Related Topics