KASNEB Company law - Question 1a

With reference to companies, explain the term “body corporate”. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 1c

Analyse SIX circumstances under which a company could repudiate pre-incorporation contracts. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 2a

Highlight THREE characteristics of a company limited by guarantee. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 2b

State FIVE legal implications of issuing shares at a discount. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 2c

Discuss SIX ways in which a person might acquire membership in a company. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 3a

Define the term “debentures”. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 3b

Distinguish between “convertible debentures” and “non-convertible debentures”. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 4a

Explain FIVE ways in which directors may handle conflict of interest in a company. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 4b

Outline FIVE powers of directors under the Companies Act. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 5b

With regard to formation of a company, highlight THREE fiduciary duties of a promoter. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 5c

Examine FIVE consequences of non-compliance with audit requirements under company law. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 6b

Summarise SEVEN roles of an administrator in a company that is under administration. ... [Click to view full question and step-by-step solution]

KASNEB Company law - Question 6c

Analyse FOUR reasons for undertaking corporate restructuring. ... [Click to view full question and step-by-step solution]

August 2024

1a

Nature and classification of companies

With reference to companies, explain the term “body corporate”.

1b

Nature and classification of companies

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.

1c

Formation of companies

Analyse SIX circumstances under which a company could repudiate pre-incorporation contracts.

2a

Nature and classification of companies

Highlight THREE characteristics of a company limited by guarantee.

2b

Shares

State FIVE legal implications of issuing shares at a discount.

2c

Membership of a company

Discuss SIX ways in which a person might acquire membership in a company.

3a

Debt capital

Define the term “debentures”.

3b

Debt capital

Distinguish between “convertible debentures” and “non-convertible debentures”.

3c

Company meetings

Amani Limited was scheduled to hold its Annual General Meeting (AGM) on 30 June 2024. The company secretary sent out notice for the meeting on 10 June 2024. On the day of the meeting, only 13 shareholders out of the total 209 shareholders attended the meeting, either in person or by proxy. The company's articles of association specified that the quorum for an AGM was 20 shareholders. During the meeting, the shareholders present approved the annual financial statements and declared a final dividend.

Required:

Discuss the legal implications of:

(i) The notice period.

(ii) The quorum.

(iii) Resolutions made during the AGM.

3d

Company meetings

Outline EIGHT general meeting agenda items that require a special resolution under the Companies Act.

4a

Company Directors

Explain FIVE ways in which directors may handle conflict of interest in a company.

4b

Company Directors

Outline FIVE powers of directors under the Companies Act.

4c

The Company Secretary

With regard to Companies Act, describe FIVE roles of a company secretary in ensuring good corporate governance within a company.

5a

Shares

Ben Apollo borrowed Sh.500,000 from Bank of Pesadi and deposited his Simba Supermarket Ltd.’s share certificate with a blank transfer as security. Subsequently, he bought goods from the supermarket on credit. The goods were worth Sh.150,000. The articles of association of Simba Supermarket Ltd., conferred a first and paramount lien on its members’ share for debts due to the supermarket. Before the supermarket’s lien arose, the bank gave the supermarket notice of Ben Apollo’s share certificate having been lodged with the bank as security for the loan. Ben Apollo is unable to pay for the goods he obtained from Simba Supermarket Ltd. and has also defaulted on the loan. Both Simba Supermarket Ltd. and the Bank of Pesadi now want to exercise their respective liens on the shares.

Required:

Discuss the legal position and advise Simba Supermarket Ltd. as appropriate.

5b

Formation of companies

With regard to formation of a company, highlight THREE fiduciary duties of a promoter.

5c

Audit of Company Accounts

Examine FIVE consequences of non-compliance with audit requirements under company law.

6a

Company Investigation

Outline FIVE circumstances under which the Registrar of Companies may order an investigation into the affairs of a company.

6b

Receivership, Administration, Liquidation and Dissolution of companies

Summarise SEVEN roles of an administrator in a company that is under administration.

6c

Corporate restructuring

Analyse FOUR reasons for undertaking corporate restructuring.

7a

Debt capital

(i) In Re Yorkshire Wool Combers Association Ltd., a floating charge is described as one that hovers over the assets of the company.

Required:

Examine THREE characteristics of a floating charge.

(ii) Dee Ltd., registered a charge on its fleet of motor vehicles in favour of Pepeta Bank to secure a loan of Sh.2,000,000. Dee Ltd., has not honoured its loan repayment obligation for the past 14 months and Pepeta Bank considers the loan as defaulted.

Required:

State FOUR options available to Pepeta Bank to recover their money.

7b

Company accounts

With reference to companies, discuss FIVE benefits which could accrue to a company from filing annual returns.

August 2024

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