FORMATION OF COMPANIES
QUESTION 1
April 2024 Question One C
Examine SEVEN rules governing the alteration of company status in your country.
(7 marks)
QUESTION 2
April 2024 Question Two A
Highlight SIX legal effects of the articles of association of a company. (6 marks)
QUESTION 3
April 2024 Question Two Three C
With reference to incorporation of companies:
(i) Explain the doctrine of adoption. (2 marks)
(ii) Describe how the doctrine of adoption relates to pre-incorporation contracts.
(5 marks)
QUESTION 4
December 2023 Question One C and D
c) Discuss the legal responsibilities and potential liabilities that promoters may incur during the pre-incorporation stage of a company. (6 marks)
(d) Tom Bwire is acting as a promoter of Tomtom Company Ltd. and is negotiating a lease agreement for office space at Upper Hill in Nairobi.
Describe what Tom should do to ensure that once the company is formed, the lease agreement does not bind him personally. (4 marks)
QUESTION 5
December 2023 Question Seven D
Patricia Wahito wishes to form a company and has approached you seeking guidance on the choice of a name. She has read from the Companies Act that the name chosen must not be undesirable in the opinion of the Registrar.
Required:
(i) With reference to the above statement, advise Patricia Wahito on FOUR matters to consider in choosing a name for her company. (4 marks)
(ii) Identify FOUR places and documents upon which the company’s name must be displayed. (4 marks)
QUESTION 6
August 2023 Question One A
Explain THREE ways in which persons intending to form a company may avoid personal liability on contracts they make on behalf of the proposed company. (6 marks)
QUESTION 7
August 2023 Question One D
Outline FOUR contents of a certificate of incorporation of a company. (4 marks)
QUESTION 8
August 2023 Question Two B
Highlight FOUR statutory registers that must be maintained and kept at the registered office of a company. (4 marks)
QUESTION 9
April 2023 Question One A (ii)
A group of four graduates have decided to form a small business firm to deal in import and export trade. You have been appointed as a member of the technical committee to help in registering the firm as a limited liability company. Explain to the committee the matters below:
ii) FIVE particulars to be included in the company’s Memorandum of Association.
(5 marks)
QUESTION 10
December 2022 Question Two A
The articles of association form the framework within which the company and its members relate. Highlight FIVE limitations that must be observed when altering the articles of a company. (5 marks)
QUESTION 11
August 2022 Question Three A
With reference to formation of companies:
(i) Outline six statutory documents required to form a private company. (6 marks)
(ii) Highlight four common law duties of a promoter. (4 marks)
QUESTION 12
April 2022 Question One C
A person dealing with a company is entitled to assume in the absence of facts putting him in doubt that there has been due compliance with all matters of internal management and procedure required by articles of association.
With reference to the rule in Royal British Bank v. Turquand, summarise five exceptions to the above statement. (10 marks)
QUESTION 13
April 2022 Question Six B
Summarise five provisions governing amendment of articles of association of a company. (5 marks)
QUESTION 14
December 2021 Question One A
With reference to formation of companies:
(i) Summarise four ways through which a company might alter its status. (8 marks)
(ii) Outline two ways through which company documents might be validly executed.
(2 marks)
QUESTION 15
December 2021 Question Six B
John and Peter are in partnership business. They have decided to incorporate their business. Please advise them on the following matters:
(i) Three differences between a private company limited by shares and a public one.
(ii) Three requirements in order for their articles or association to be registered.
QUESTION 16
September 2021 Question Two A and B
In the context of formation of companies:
(a) Highlight five ways through which a promoter might receive remuneration. (5 marks)
(b) Explain five legal effects of registration of articles of association of a company.
(5 marks)
QUESTION 17
May 2021 Question Two C
With reference to both case law and common law, discuss five rules governing pre-incorporation contracts. (10 marks)
QUESTION 11
November 2020 Question one A
In relation to formation of companies:
(i) Explain four common law duties of a promoter. (4 marks)
(ii) Discuss three rules that govern pre-incorporation contracts. (6 marks)
QUESTION 19
November 2019 Question two A
With reference to formation of companies:
(i) Explain the meaning of the term “promoter”. (2 marks)
(ii) Highlight three fiduciary duties of a promoter of a company. (6 marks)
(iii) Outline two remedies to the company for breach of fiduciary duty by promoters.
(2 marks)
QUESTION 20
May 2019 Question three B
In the context of formation of companies in your country:
(i) Outline five particulars that might be stated in an application for registration of a company. (5 marks)
(ii) Describe the prescribed format of the articles of association. (5 marks)
QUESTION 21
November 2018 Question one A
On 1 September 2018, Peter Kioko decided to form a company under the name PK Ltd. Before the company was duly formed, Peter Kioko made a contract for the company in which PK Ltd. received a down payment of Sh.500,000 for the supply of household items to Fanika Ltd. PK Ltd. has since been incorporated but remains in breach of the said contract. Fanika Ltd. feels aggrieved and has approached you for legal advice.
Required:
Analyse the legal principles applicable in the above case and advise Fanika Ltd.
(10 marks)
QUESTION 22
November 2018 Question one B
Discuss the doctrine of ultra vires in relation to the memorandum of association of a limited company. (4 marks)
QUESTION 23
November 2018 Question three C
(i) Outline four undertakings that would amount to promotional acts of a company during its formation. (4 marks)
(ii) Explain four consequential attributes that flow from incorporation of unincorporated associations. (4 marks)
QUESTION 24
May 2018 Question one A
With reference to formation of companies:
(i) Explain the meaning of the term “articles of association”. (2 marks)
(ii) Describe four effects of registration of the articles of association of a company.
(4 marks)
(iii) Outline the provisions of the Companies Act which govern the alteration of the articles of association of a company. (4 marks)
QUESTION 25
November 2017 Question five B (ii)
Jairo Chai would like to start a company. He has approached you as a student of company law to guide him through the process.
With reference to the above statement, describe the procedure of registering a limited liability company. (7 marks)
QUESTION 26
November 2016 Question two A
Explain the general effect of pre-incorporation contracts. (2 marks)
QUESTION 27
November 2016 Question two B
Discuss how a promoter might overcome the liability of pre-incorporation contracts.
(8 marks)
QUESTION 28
November 2016 Question six B
With reference to the procedure for registration of companies:
(i) Describe the requirements that an application for registration must meet before the registrar can approve it. (6 marks)
(ii) Highlight the requirements that a certificate of registration must comply with.
(4 marks)
QUESTION 29
May 2016 Question three B
(i) Define the term ‘promoter”. (2 marks)
(ii) Describe four legal rights of an incorporated company against promoters who sold their property to the company at a profit while it was in the process of formation.
(8 marks)
QUESTION 30
May 2016 Question six A
Discuss five legal consequences of incorporation. (10 marks)
QUESTION 31
May 2016 Question six B
Describe the charges that could be created by a company registered under the Companies Act. (10 marks)
QUESTION 32
November 2015 Question three A
Describe six matters which might be included in the code of best practices of a company to ensure equitable treatment of shareholders of the company. (6 marks)
QUESTION 33
November 2015 Question four C
Discuss three effects of the ultra vires doctrine. (6 marks)
QUESTION 234
November 2015 Question seven B
Wanyoro Ltd. is a public company. Its directors have decided to venture into transport business by acquiring a fleet of public service vehicles. They did not notice that this activity is outside its objects clause. The company’s chairman. Ann Omesa who owns 10% of the voting shares negotiated a loan which was in excess of the company’s issued capital front Joan Mekonge, a financier.
Joan Mekonge did not refer to any of the company’s registered documents nor did she inquire into the purpose to which the money would be put. The money is used by the directors to pay part of the purchase price of the vehicles. The rest of the purchase price remains unpaid. Some members who hold a substantial amount of shares in Wanyoro Ltd. intend to move a resolution to insert into the memorandum, an object permitting the acquisition and use of the vehicles. One of the directors of Wanyoro Ltd. Announces that if this is done, he will apply to court to have the new object clause quashed.
Advise the directors of the company. (10 marks)
QUESTION 35
September 2015 Question one A
(i) Explain the meaning of the term “promoter” in the context of company law.
(2 marks)
(ii) Discuss three duties of a promoter of a company. (6 marks)
QUESTION 36
September 2015 Question one C
Explain the restrictions imposed on promoters of a company in relation to choice of name. (6 marks)
QUESTION 37
September 2015 Question two A
Discuss five ways in which the veil of incorporation might be lifted under statutory provisions. (10 marks)
QUESTION 38
September 2015 Question two B
Tom and Harry were in the process of incorporating a company called Foot Shoes ltd. The objects of the company were to make and sell shoes. Before the process of incorporation was complete. Tom entered into a contract with Clean Leather Ltd. under which Clean Leather Ltd. agreed to supply Foot Shoes Ltd. with leather worth one million shillings.
The price was to be paid in four installments of two hundred and fifty thousand shillings each, over a period of one sear.
Tom signed the contract as follows: “Signed by Tom, on behalf of Foot Shoes Ltd.”. By the time the leather was delivered, Foot Shoes Ltd. had been incorporated.
However, after the second installment had been paid, Foot Shoes Ltd. was unable to pay the balance.
Advise Clean Leather Ltd. on how to recover the outstanding amount of five hundred thousand shillings. (10 marks)
QUESTION 39
September 2015 Question six B
List five registers that must be maintained by a company. (5 marks)
