Category: A CPA Company Law revision

CPA Company Law questions and answers

Tim and Tom wish to establish a business jointly. However, they are not sure whether to establish a limited liability company or an unlimited liability company; as they know little about these types of companies. i) Explain to them the differences between a limited company and an unlimited company. ii) State the provisions of the Companies Act regarding the re-registration of unlimited company as limited.

Tim and Tom wish to establish a business jointly. However, they are not sure whether to establish a limited liability company or an unlimited liability company; as they know little about these types of companies. i) Explain to them the Open …

Happy co. Ltd was incorporated in January 2000 with an authorized share capital of 50,000,000 of one shilling per share which is fully issued and fully paid. The original articles of association gave the directors authority to issue the initial authorized share capital. The directors are proposing to purchase a plot from Mr Karan for KShs.3,000,000 and to finance the purchase by a fresh issue of 2,000,000 shares at one shilling per share to Mr. Karan. In order to develop the plot they propose to raise further capital by issuing a further 2,000,000 shares of one shilling each. The directors propose that 1,000,000 of the shares should be offered to existing shareholders and 1,000,000 to the general public. The shares to Mr Karan, the existing shareholders and to the general public are to be offered at one shilling and fifty cents each. Explain the preliminary checks which the directors must make before proceeding with these proposals. State the steps the directors must take to give them effect.

Happy co. Ltd was incorporated in January 2000 with an authorized share capital of 50,000,000 of one shilling per share which is fully issued and fully paid. The original articles of association gave the directors authority to issue the initial Open …

Dividend is payable only in cash to shareholders out of profits available for distribution. State the rules which determine the extent to which profits arising out of the disposal of fixed assets may be used to pay such dividends.

Dividend is payable only in cash to shareholders out of profits available for distribution. State the rules which determine the extent to which profits arising out of the disposal of fixed assets may be used to pay such dividends. ANSWER Open …

In order to frustrate a threatened take-over bid, the directors of Kesho Ltd. issue to themselves and their nominees sufficient ordinary shares for cash so as to give themselves control of a majority of the shares which give the right to vote at a general meeting. Mwananchi, a minority shareholder who had hoped to benefit by selling to the bidder, is very annoyed by the action of the directors. Advise him as to his legal rights.

In order to frustrate a threatened take-over bid, the directors of Kesho Ltd. issue to themselves and their nominees sufficient ordinary shares for cash so as to give themselves control of a majority of the shares which give the right Open …

Describe the various kinds of resolutions that may be passed at general meetings. State the difference between them and list matters that require such resolutions to be passed before they can have effect

Describe the various kinds of resolutions that may be passed at general meetings. State the difference between them and list matters that require such resolutions to be passed before they can have effect. ANSWER Company meetings make decisions by passing Open …

In relation to corporate insolvency, a) i) Explain what is meant by a contributory. ii) Distinguish between fraudulent and wrongful trading. Against whom may proceedings by brought for breaches of provisions against fraudulent trading and wrongful trading?

In relation to corporate insolvency, a) i) Explain what is meant by a contributory. ii) Distinguish between fraudulent and wrongful trading. Against whom may proceedings by brought for breaches of provisions against fraudulent trading and wrongful trading? ANSWER i) Under Open …