TC12 COMPANY-LAW- QUESTION, DECEMBER, 2014

1. EXAMINATION NO.____________________
2014 EXAMINATIONS
ACCOUNTING TECHNICIAN PROGRAMME
PAPER TC12: COMPANY LAW
MONDAY 8 DECEMBER 2014 TIME ALLOWED : 3 HOURS
2.00 - 5.00 PM
INSTRUCTIONS: -
1. You are allowed 15 minutes reading time before the examination begins during which
you should read the question paper and, if you wish, make annotations on the question
paper. However, you will not be allowed, under any circumstances, to open the answer
book and start writing or use your calculator during this reading time.
2. Number of questions on paper - 7.
3. FIVE questions ONLY to be answered.
4. Each question carries 20 marks.
5. Your answers must be supported, where appropriate, by relevant decided cases and
statutory provisions.
6. Begin each answer on a fresh page.
7. DO NOT OPEN THIS PAPER UNTIL YOU ARE INSTRUCTED BY THE
INVIGILATOR.
This question paper contains 3 pages.
This question paper must not be removed from the examination hall.

2. 1
1. (a) Define the following terms:
(i) Corporate personality;
(ii) Corporate democracy;
(iii) Corporate status. 6 Marks
(b) Mention six differences between a company limited by shares and an association.
6 Marks
(c) What is meant by “lifting the veil of incorporation.” 2 Marks
(d) State three circumstances under which the veil of incorporation may be lifted
under the provisions of the Companies Act, 1984. 6 Marks
(TOTAL: 20 MARKS)
2. (a) Mention five functions of the Registrar of Companies under the Companies Act,
1984. 5 Marks
(b) Mention the contents of a register of members of a company limited by shares.
5 Marks
(c) Discuss how conclusive the certificate of incorporation is. 10 Marks
(TOTAL : 20 MARKS)
3. (a) The Articles of Association are concerned with the internal administration
of a company. Such matters cannot remain static all the time and so alterations
must be possible.
Required:
State five conditions that must be complied with to effect a valid alteration of
Articles of Association. 10 Marks
(b) Ndirande Poultry Feeds Limited (NPFL) is proposing to alter its Articles of
Association. The effect thereof will be to render it incapable of performing its
part of the contract entered into between itself and Joseph who, upon learning of
this move, intends to restrain NPFL from effecting the alteration by an injunction.
Required:
Advise Joseph if, under the Companies Act, he can restrain PFL from altering its
Articles of Association. 5 Marks
(c) Home Furnishers Limited (HFL) has altered its Memorandum of Association
thereby making Miriam take more shares than those initially allotted to her on
incorporation.
Required:
Advise Miriam whether or not she is bound by the alteration. 5 Marks
(TOTAL: 20 MARKS)

3. 2
4. (a) Section 47 of the Companies Act allows every registered company to provide for
different classes of shares. Some of these are ordinary, deferred and preference
shares.
Required:
Define each of the three types of shares mentioned above. 9 Marks
(b) Explain the meaning of „transfer of shares‟. 3 Marks
(c) State the procedure for the transfer of shares. 4 Marks
(d) Mention the situations by which the transfer of shares can be effected by
operation of law. 4 Marks
(TOTAL: 20 MARKS)
5. (a) Explain the meaning of the following meetings:
(i) Annual general meeting; 4 Marks
(ii) Extraordinary general meeting and how it is convened; 5 Marks
(iii) Class meeting and its major difference from a general meeting. 6 Marks
(b) Preference shareholders of Mpunga Milling Ltd (MML) convened a meeting to
discuss changing some of the rights attached to their class of shares. The meeting
was, however, attended by holders of other types of shares which was prejudicial
to the rights of preference shareholders. The intended resolution was not reached
because members, other than preference shareholders, also voted at this meeting.
Preference shareholders did not turn away the other shareholders as they
genuinely believed that the whole group comprised of preference shareholders.
They have now discovered that members of other classes of shares also attended
the meeting and actually voted.
Required:
Advise the preference shareholders on the action they can take. 5 Marks
(TOTAL: 20 MARKS)
6. (a) State the rule in the case of Royal British Bank v Turquand (1856) 6 E & B 327.
7 Marks
(b) Explain the doctrine of ultra vires in Company Law. 7 Marks
(c) How has the Companies Act affected the application of the doctrine of ultra
vires? 6 Marks
(TOTAL: 20 MARKS)
Continued/......

4. 3
7. (a) State and discuss any two ways in which a company may incur liability through
the acts of its directors. 12 Marks
(b) Outline the procedure for the removal of a director. 8 Marks
(TOTAL: 20 MARKS)
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