INSTITUT JATI

SCHOOL OF ACCOUNTING AND FINANCE

DIPLOMA IN ACCOUNTANCY

COMPANY LAW
Module Assessment Academic Term and Year Module code Date Time Assessor : FINAL TERM EXAMINATION : SEMESTER 3 OF YEAR 2009 : ALW2043 : 06 SEPTEMBER 2009 (SATURDAY) : 9.00AM-11.00AM : MR SELVAVISHNU

Credit hours :2 ___________________________________________________________________

Instructions to candidates
Answer ALL Questions from Section A and TWO Questions from Section B. No extra materials are allowed into the examination room. For this examination, you are supplied with the following: Examination script Answer script

Failure to follow any of the above instructions will be considered as an attempt to cheat and will be recorded as an irregularity in the examination

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Section A 1. Explain the legal significance of the case Salmon v salmon. (5 marks) 2. Define the term quorum. Explain the effect of not having enough quorums in a meeting. (5 marks) 3. Explain FOUR types of directors under the Company Act 1965. 4. Explain TWO types of share capital. 5. a) what do you understand the term dividend? b) Explain the following terms: i. final dividend ii. Interim dividend (6 marks) (8 marks) (4 marks) (2 marks)

6. State FOUR issues that must be considered to determine the priority of charge. (4 marks) 7. A) State TWO forms of voluntary winding up? B) State TWO ways how creditors winding up occur. (2 marks) (2 marks)

8. A) Provide TWO parties that can initiate a compulsory winding up. B) Provide TWO grounds that must be established for compulsory winding up under S218 of Companies Act 1965. (4 marks) 9. Explain FOUR powers of liquidator under S236 (1) of Companies Act 1965. (8 marks)

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Section B QUESTION 1 a) Explain the meaning of director under the Company Act 1965. (4marks)

b) Explain FOUR remedies available to a company if the director breaches his/her duties. (12 marks) c) Discuss THREE fiduciary obligations of a director. Support your answers with ONE relevant case for each obligation. (9marks)

QUESTION 2 a) Explain the legal significance in the case Foss v Harbottle. (5 marks)

b) Explain TWO types of resolution that can be approved by members of a meeting who have voting rights. (8 marks) c) Discuss FOUR types of meeting. Support your discussion with relevant sections of Company Act 1965. (12 marks)

QUESTIONS 3 ZSA Ltd was incorporated on 23 January 2008. The only meeting that was held was on 24 January 2009. Since then no meeting had been held. The shareholders are concerned about this matter. They have requested the directors to call for a meeting of the company in order to discuss the performance of the directors in relation to this matter. The directors refused to do so. a) When must the Annual General Meeting be held? Explain the function and usual matters discussed in the Annual General Meeting. (10 marks) b) Explain any TWO actions which could be taken by shareholders to call for a meeting. (8marks) c) Discuss the members voting rights in a meeting. (7marks)

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4 END OF QUESTION PAPER

Question No.

SOLUTIONS

Marks

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Final examination solution Q1 SECTION A Student are required to provide advise to the parties as to whether they will be liable for debts. In answering the question student need to make reference to the principal legal entity Q2 established in case SALOMON V SALOMON.

5m

5m Student are required to provide the meaning of quorum and effect in Q3 Q4 Q5 circumstances where the meeting does not meet the quorum Student are required to define 4 types of directors Student are required to explain the meaning of share capital Student are required to define the term dividend and explain different types of dividend Q7 Student are required to state 4 factors that determined a charge State two types of winding up and how creditors would wind the Q8 company State two types of winding up and the grounds for a company to be wind up Explain the power of a liquidator 4m 8m 4m 6m

Q6

4m

4m

Q9

8m

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SECTION B

Q1

This question requires students to examine the meaning of director, remedies of directors in circumstances where the directors has breach their duties and fiduciary duties known by directors to the company

25 m

This question requires students to examine the principles established Q2 in Fosss case, the different types of resolution and different types of meeting conducted by a company

25m

Q3

This question requires students to examine the given case study by applying the principles governing meetings in a company

25m

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