EXAMINER’S REPORT

MIA QE SEPTEMBER 2017

PAPER: BUSINESS AND COMPANY LAW

Question Question’s Expected Answer Weaknesses in the Answer How Answer Should be
no. Requirement Provided Written to Get More Marks

1(a) Candidates are required to Candidates should explain Evidence of learning ‘by Focus on the point of issue
describe the doctrine of what is meant by the rote’; students simply write only. Answer what is required
binding precedent. doctrine and its function. what they remember from by the question only.
the topic.

1(b) Explain the types of Brief explanation of the Some are unable to define Proper understanding is more
consideration. three types of and differentiate effective than memorising.
consideration including its effectively.
statutory provisions.

1(c) Defining types of goods Statutory definition of Some are able to provide Some focus on basic statutory
under SOGA. goods under SOGA good definitions while provisions and its
others seem totally lost. understanding is necessary.

2(a) To state three conditions State three of the Some candidates confused Students need to be reminded
that give rise to a type of conditions that gives rise this with ‘how an agent’s to be more careful when
agency. to agency by ratification. act may be ratified’ analysing the question
requirement.

2(b) Problematic question on Students are required to
law of agency. solve an issue with
regards to the liability of a
principal to indemnify his
agent.
Students answer this Focus on identifying issues and
question fairly well but problem solving techniques.
lacks case/statutory
authority.
Question Question’s Expected Answer Weaknesses in the Answer How Answer Should be
no. Requirement Provided Written to Get More Marks

2(c) Statutory liability of agents To state the relevant Some gave the duties of Focus on what is actually
exceeding his authority as statutory provisions and agents in general. required by the question.
regards a third party AND explain the type of
the principal. consequence involved.

3(a) Define three classification Give three simple Most candidates are able to Some improvement in language
of partners. explanation of the three answer this question but proficiency might help.
types of partners. some answers are totally
wrong.

3(b) Statutory explanation of the Explain the statutory Most candidates explained Allowing statutes to be brought
contractual debts and obligations of partners in in general without into exams is a practical
obligations of a partner. relation to a partnership’s reference to statutory solution to this.
contractual obligations provisions.
and debts.

3(c) Problem question on
professional negligence;
whether audit firms owe
duty of care to their clients.
Issue of duty of care on
part of audit firm to their
client should be identified
and explained. A sub-
issue of fiduciary nature
of relationship between
client and auditors may
render the answer
complete.
Most students are able to Technique on answering
identify the issue but problem questions need to be
application of law is found improved a little.
lacking. Use of case law
authorities is limited to a
few.

4(a)(i)(ii) This question on company Under certain occasions Candidates failed to give Candidates should elaborate on
law tests the candidates’ the court will be prepared proper definition on what is what is the meaning of
knowledge on the term, to lift the ‘veil of the meaning of separate separate legal entity; the
Question Question’s
no. Requirement
‘the veil of incorporation’
and the exceptions of
principle in Salomon v
Salomon case.
4(b) This question on company
law tests the candidates’
knowledge on permitted
buy- backs or purchase by a
company of its own shares.
4(c) This question on company
law tests the candidates’
knowledge on the
appointment and duties of
a company secretary.
Expected Answer
incorporation’ and ignore
the separate legal
personality of the
company. Candidates are
required to give four (4)
circumstances s under
common law or under the
statute.
Candidates are expected
to state the general rule
under common law
position and Malaysian
position (the exception)
that a public listed
company can purchase its
own shares subject to
certain qualifications that
has been laid down under
the Companies Act.
Candidates are expected
to write and discuss the
appointment and duties
of a company secretary
Weaknesses in the Answer
Provided
legal entity, (instead of
giving the facts of
Salomon’s case without
elaborating it.); the veil of
incorporation and the
consequences on how the
court or the statute would
disregard the veil of
incorporation.
Candidates only state the
general rule and straight
away made a conclusion
that a company cannot buy
its own shares.
Candidates only state the
duties of a company
secretary neglecting the
other part of the question
How Answer Should be
Written to Get More Marks
consequences after a company
is being incorporated and the
circumstances under case law
or under the statute.
(Please refer to the suggested
answers)
Candidates should state the
qualifications or conditions that
has been laid down under the
Companies Act.
(Please refer to the suggested
answers)
Candidates should give answers
on both parts.
Question Question’s
no. Requirement
5(a)(i)(ii) This question on company
law tests the candidates’
knowledge on power
exercised by the directors
with regards to register the
transfer of shares.
5(b) This question on company
law tests the candidates’
knowledge on the security
of loan.
Expected Answer Weaknesses in the Answer
Provided
which is on the
appointment.
Candidates are expected Candidates were tempted
to write on powers given to prepare a general answer
to directors. on directors’ powers where
the question only asks
about one specific power
and
candidates answers are
(Please refer to the suggested
generally on the procedures
answers)
of acquiring shares.
Candidates are expected Instead of giving the
to write on the answers on the weaknesses
weaknesses of a floating of a floating charge,
charge as a vulnerable candidates gave answers on
security. the characteristics of a
floating charge.
How Answer Should be
Written to Get More Marks
(Please refer to the suggested
answers)
Candidates should discuss on
where discretion is given to the
directors, the power must be
exercised bona fide in the
interest of the company.
Candidates should understand
what the questions required.
Discussion in answers should
be on the
vulnerability/weakness of the
said security and not on the
characteristics.
(Please refer to the suggested
answers)
Question Question’s
no. Requirement
5(c) This question on company
law tests the candidates’
knowledge on distribution
of dividends in both public
and private companies.
5(d) This question on company
law tests the candidates’
knowledge on the
transactions between a
company and its directors
which requires the approval
of the members of the
company.
6(a)(i)(ii) This question on company
law tests the candidates’
knowledge on the topic of
Meetings of a company.
6(b) This question on company
law tests the candidates’
Expected Answer Weaknesses in the Answer How Answer Should be
Provided Written to Get More Marks
Candidates are expected Candidates answered Candidates should read the
to state their answers on generally on the procedures question carefully to determine
the rules pertaining to of declaring dividends. what the question required in
dividends under the order to get full marks.
Companies Act and also
(Please refer to the suggested
under case law (if any).
answers)
The transactions between Candidates generally gave
a company and its their answers only on the
directors which are restriction pertaining to a
prohibited by the director giving loans to a (Please refer to the suggested
Companies Act. person connected with answers)
them.
Candidates are expected Candidates generally gave Answers should be focused on
to apply the rules answers on the procedure the validity of the meeting in
pertaining to quorum in of winding up of a not following the rules on
meeting and also with company. quorum and proxy.
regards to the
(Please refer to the suggested
appointment of proxy in a
answers)
meeting.
Candidates are expected Candidates gave answers (Please refer to the suggested
to write on circumstances on priority of charges as a answers)
 Question Question’s Expected Answer Weaknesses in the Answer How Answer Should be
no. Requirement Provided Written to Get More Marks

knowledge on the topic of under which the security upon winding up of

winding up of the company. unsecured creditors shall a company.
be paid in priority based
on the Companies Act
upon winding up of a
company.

6(c)(i)(ii) This question on company
law tests the candidates’
knowledge on the topic of
fraudulent behaviour.
Candidates are expected Candidates did not give a
to define what is insider complete answer in this
(Please refer to the suggested
dealing according to question. The answers
answers)
Bursa Malaysia and to portrayed lack of
explain (3) three elements knowledge in this area.
which constitute the
fraudulent act.

General Recommendations by examiners

To Facilitators 1. Some emphasis on techniques in using case laws in answering problem question is required;
(practice);
2. Emphasis on importance of authority in answering law papers (cases & statutory provisions);
3. Possibility of suggesting that statutes be allowed in examinations.
4. Emphasis on the importance of understanding the legal principles carefully and thoroughly.

To Candidates 1. Case reading and understanding techniques to utilise legal principles need to be improved;
2. Understanding the question requirement and giving only the appropriate answer is important;
3. Statutory provisions must be included in answers wherever specifically required.
4. Candidates must always study across the syllabus to be fully prepared for the examination.
5. Candidates must always try to understand the underlying concepts behind a given topic.
6. Candidates must have a precise understanding of the facts, since facts determine the
relevance of any legal points that will be made later.
MODERATOR’S REPORT
MIA QE SEPTEMBER 2017
PAPER: BUSINESS AND COMPANY LAW

Question Question’s Expected Answer Weaknesses in the Answer How answer should be written
no. Requirement Provided to get more marks

1 The question tested on Brief discussion on the Lack of elaboration, cases and Answer with cases and the
doctrine of binding respective areas of the statutory provisions. statutory provisions
precedents & question.
Consideration under
contract law and specific
goods under the sale of
goods.

2 Two essay questions and Descriptive answers Candidates fared better in the Answer with cases and the
one problem question on supported with cases and essay questions compared to the statutory provisions
contract of agency. statutory provisions for problem question. Lack of
the essay questions. elaboration, cases and statutory
Application of the law for provisions
the problem base
question.

3 Two essay questions and Descriptive answers Candidates fared better in the Answer with cases and the
one problem question on supported with cases and essay questions compared to the statutory provisions
contract of partnership. statutory provisions for problem question. Lack of
the essay questions. elaboration, cases and statutory
Application of the law for provisions
the problem base
question.
Question Question’s Expected Answer Weaknesses in the Answer How answer should be written
no. Requirement Provided to get more marks

4 Two essay questions and Descriptive answers Candidates fared better in the Answer with cases and the
one problem question supported with cases and essay questions compared to the statutory provisions
namely on veil of statutory provisions for problem question. Lack of
incorporation; buy- back the essay questions. elaboration, cases and statutory
or purchase by a Application of the law for provisions
company of its own the problem base
shares; rights and duties question.
of company secretary.

5 Varied questions on Descriptive answers Candidates fared better in the Answer with cases and the
Company law: power supported with cases and essay questions compared to the statutory provisions
exercised by the directors statutory provisions for problem question. Lack of
with regards to register the essay questions. elaboration, cases and statutory
and transfer of shares; Application of the law for provisions
security of loan; the problem base
distribution of dividends question.
in both public and private
companies.

6 Questions tested are on Descriptive answers Candidates fared better in the Answer with cases and the
the areas of meetings, supported with cases and essay questions compared to the statutory provisions
insider trading and statutory provisions for problem question. Lack of
winding up. the essay questions. elaboration, cases and statutory
Application of the law for provisions
the problem base
question
General Recommendations by moderators

To Facilitators More practise of problem base questions

To Candidates Extensive reading of law books and practise of answering past year questions supported with cases
and relevant sections.