Outline the legal rules that govern the appointment of an Administrative Receiver a holder of a floating charge ANSWER i) Under the Companies Act, where a receiver or manager of the whole or substantially the whole of the property Read More …
Category: CPA Company law revision
CPA Company law revision
The directors of Alumasi Co. Ltd borrowed Shs.20 million from Maendeleo Bank. The Bank was informed that the money was intended to be used to expand the company‟s horticultural business. The bank however, did not ask for the company‟s Memorandum of Association and lent the money. The money was spent for purposes not intended. These facts have come to light and Maendeleo Bank seeks your advice on whether the bank can successfully recover the money. Advise the bank.
The directors of Alumasi Co. Ltd borrowed Shs.20 million from Maendeleo Bank. The Bank was informed that the money was intended to be used to expand the company‟s horticultural business. The bank however, did not ask for the company‟s Memorandum Read More …
Distinguish a Fixed Charge from a Floating Charge
Distinguish a Fixed Charge from a Floating Charge ANSWER Fixed Charge This is a legal or specific charge. It is a charge securing a debenture on a fixed asset. In Illingworth v Houldsworthit was observed that a fixed charge is Read More …
The rule in Foss v Harbottle establishes the principle that where a wrong is done to the company, the proper plaintiff is the company itself. However, where the wrong is done the company directors, it may be impossible for the company to sue. In such a case, a derivate action may be the only option. a) Explain what is meant “derivative action”. b) Describe the conditions that must be satisfied before a derivative suit can be instituted
The rule in Foss v Harbottle establishes the principle that where a wrong is done to the company, the proper plaintiff is the company itself. However, where the wrong is done the company directors, it may be impossible for Read More …
Define the term „prospectus‟ and explain the circumstances under which a company may issue a prospectus
Define the term „prospectus‟ and explain the circumstances under which a company may issue a prospectus. ANSWER Under the Companies Act “prospectus” means: • “Any prospectus, notice, circular advertisement or other invitation offering to the public for subscription or purchase Read More …
Explain the Statutory and Common Law Rules that govern raising and maintenance of share capital of a company
Explain the Statutory and Common Law Rules that govern raising and maintenance of share capital of a company. ANSWER It is a fundamental principle of company law, that share capital be maintained. Company law has evolved principles and provisions to Read More …
a) Hopeful, a private limited company has adopted Table A as its Articles of Association. The company now, wishes to alter the Articles of Association. Outline the procedure to be followed to effect the change b) Wafula, one of the Directors of Hopeful Co. Ltd is unsure of his duty of care and skill as a director of the company. He seeks your advice on this. Advise him.
a) Hopeful, a private limited company has adopted Table A as its Articles of Association. The company now, wishes to alter the Articles of Association. Outline the procedure to be followed to effect the change b) Wafula, one of the Read More …
In relation to company law: Explain the meaning of the term “Promoter”
In relation to company law: Explain the meaning of the term “Promoter” ANSWER Under the Companies Act, Promoter means “Promoter who was a party to the preparation of the prospectus or of the portion thereof containing the untrue statement but Read More …
In relation to company law: Discuss the rules that govern pre-incorporation contracts
In relation to company law: Discuss the rules that govern pre-incorporation contracts ANSWER • This is a contract entered into persons purporting to act on behalf of the company before its incorporation of the Companies Act.) • A company Read More …
In relation to company law: Describe the common law duties of a Promoter
In relation to company law: Describe the common law duties of a Promoter. ANSWER • Act bona fide for the benefit of the company information. • Proper accounting. • Disclose any personal interest. • Determine and settle the name of Read More …