QUESTION ONE

a) Identify four privileges enjoyed by an unlimited company

( 4 marks)
b) Explain five advantages of a private company over public company
( 5 marks)
c) Recognize and explain instances where separate personality in company may
be ignored ( 8 marks)
d) Illustrate the concept of limited liability in companies
( 3 marks)
QUESTION TWO
i) Highlight the basic functions of a promoter
( 5 marks)
ii) Identify and explain six rules relating to pre incorporation contracts
( 6 marks)
iii) Describe the procedure to re-register a public company as a private company
( 5 marks)
iv) State four contents of certificate of incorporation
( 4 marks)
QUESTION THREE
a) What are the purposes for which share premium may be used
( 5 marks)
b) In relation to share capital explain the difference between bonus issue and
rights issue
( 5 marks)
c) Explain the difference between nominal value and market value of a share
( 3 marks)
d) Describe various ways in which a person may become a member of a company
( 7 marks)
QUESTION FOUR
i) Identify the basic features of debentures
( 6 marks)
ii) What are the remedies available to secured debenture holders
( 4 marks)
iii) Differentiate between shareholders and debenture holders
( 5 marks)
iv) Compare a fixed charge with a floating charge
(5
marks)
v) Describe the procedure of carrying out capital reduction of a company
( 4 marks)
QUESTION FIVE
a) What are the consequences of payment of dividends out of capital?
( 5 marks)
b) A company may reduce its share capital. what are the possible reasons for
doing so
( 5 marks)
c) Describe the explanation of the court in the case of city equitable fie assurance
limited of 1925 ( 3 marks)
d) What are the basic duties of a company secretary?
( 7 marks)
QUESTION SIX
i) Auditor is required to make an audit report. what are the contents of an
auditor`s report ( 6 marks)

ii) Define special notice and indicate the circumstances when it is required
( 6 marks)
iii) Explain the rule and exceptions in the case of Foss vs. Harbottle
( 8 marks)
QUESTION SEVEN
a) Explain the difference between winding up and dissolution of a company
( 5 marks)
b) Identify the reasons why a company many decide to undergo restructuring
( 5 marks)
c) What are the effects of compulsory winding up order of a company by the court
( 6 marks)
BONUS QUESTIONS
Explain the legal principle in the case of Lee vs. Lee`s farming company ltd, 1960.
Explain the legal principle in the case Ashbury Railway Carriage and Iron Co Ltd v
Riche (1875)