CPA › Company law › May 2021

CPA Company law – May 2021 Past Paper & Answers

Unit: Company law

20 Questions

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Questions

Download CPA Company law May 2021 past paper with detailed answers and marking scheme. This paper is based on KASNEB examination standards and is ideal for revision and exam preparation.

Access the full paper online, download the PDF, or study offline. Each question includes step-by-step solutions to help you understand key concepts in Company law.

Other Company law Past Papers

1a
Auditors Audit of Company Accounts
​​ XYZ Ltd. is a newly formed company which deals in manufacture and supply of stationery. The board of directors of XYZ Ltd. is composed of first time directors who are not conversant with company operations. Advise the board of directors of XYZ Ltd. with regards to auditors and specifically on the following: 

(i) Eligibility for appointment as a statutory auditor of a company.

(ii) Auditor's rights to information from foreign subsidiaries. 

(iii) Person mandated by law to provide an auditor with information or explanations as the auditor thinks necessary for carrying out their responsibilities.
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1b
Company Directors
​​State six particulars that a company's register of directors is required to contain: 

Note: Register of directors who are natural persons.
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1c
Company Directors
​​As a company law expert, you have been approached by three friends who intend to form a private company to give guidelines on matters regarding directors. 

Explain to the three friends, the relevant governing legal provisions on each of the items below: 

(i) Minimum number of directors for a private company. 

(ii) Minimum age for a director. 

(iii) Two requirements that a loan to directors must meet.
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2a
Nature and classification of companies
​​ Explain three characteristics of a company.
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2b
Nature and classification of companies
​ ​​Highlight four differences between a "private company" and a "public company".
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2c
Formation of companies
​​With reference to both case law and common law, discuss five rules governing pre-incorporation contracts.
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3a
Company Investigation
​​With specific reference to derivative actions:

(i) Define the term "derivative claim".

(ii) Identify two causes of action with respect to which a derivative claim might arise.

(iii) Highlight three outcomes that might arise upon the court hearing the application of a derivative claim. 

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3b
Company meetings
​​Outline three rights that a member of a company has with regards to a general meeting.
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3c
Foreign Companies
​​With respect to companies incorporated outside Kenya or your country, explain five documents which are necessary to accompany the application for registration in Kenya or your country.
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4a
Debt capital
​​In the context of debt capital:

(i) Outline six terms contained in a debenture trust deed.

(ii) Highlight four advantages of a floating charge.

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4b
Company accounts Audit of Company Accounts
​​Identify four uses of a statement of profit or loss.
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4c
Nature and classification of companies
​​Highlight three conditions for a company to be deemed a "small company".
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5a
The Company Secretary
​​In relation to the company secretary:

(i) Highlight three qualifications required for one to be registered as a company secretary.

(ii) Discuss the status of the company secretary in relation to the company.

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5b
Membership of a company
​​Mutiso, a member of Tusonge Company Ltd., inspected the register of members of the company and noted that his name had been omitted. 

Advise Mutiso on how he should proceed to have his name entered in the register.
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6a
Corporate restructuring
​​Enumerate six most common reasons why companies might want to reduce their capital.
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6b
Shares Share capital Company meetings
​​In the context of company dividends:

(i) Explain the meaning of the phrase "cutting a melon".

(ii) State three reasons why a limited company might suspend issuing dividends.

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6c
Shares Share capital
​​Explain six advantages of preference shares to both the shareholder and the company:
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7a
Corporate restructuring
​​With reference to corporate restructuring:

(i) Describe four types of company mergers.

(ii) State three causes of internal reconstruction of a company.

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7b
Receivership, Administration, Liquidation and Dissolution of companies
​​Outline five circumstances under which an unregistered company can be liquidated.
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7c
Company meetings
​​The case of Sharp V. Dawes indicates that one person cannot constitute a meeting. 

Explain four exceptions to this rule.
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