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P.O. Box 342-01000 Thika Email: Web:



Patrick Kibati-0722-577701


C OURSE Purpose of the course


To prepare students for such aspects of law as will touch their business operations so that they can play a practical role in the field of commercial enterprise in the community and nation as a whole. Course outcomes By the end of the course unit, the learner should be able to:    Explain features of a company as a legal person Describe the procedure of forming a company Describe the procedure of holding a statutory meeting Explain the general running of a company

Course Content Lesson one: the company as a form of business organization  Meaning of company  Classification of companies  Registration procedures  Effect of registration  Meaning of incorporation  Practical consequences of registration  Disadvantages of incorporation  Lifting the corporate veil Lesson 2: memorandum of association  Meaning and importance  The purposes of memorandum  The contents of memorandum  The alteration of the memorandum  Doctrine of ultra vires Lesson 3: articles of association  Meaning of articles of association  The contents of articles of association  Alteration of articles of association  The constructive notice of memorandum and articles 2

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The doctrine of indoor management The rule royal brutish bank v turquand The exceptions to the doctrine of indoor management

Lesson 4: The promoters          Meaning of promoters The functions of promoters. Legal status of a promoter Fiduciary position of a promoter Duty of promoter as regards prospectus Remuneration of promoters Pre – incorporation or preliminary contracts Position of promoters as regards pre – incorporation contracts Ratification of a pre-incorporation contract

Lesson 5: prospectus  Meaning of prospectus  Purpose of a prospectus  The form and contents of a prospectus  The report to be set out in prospectus Lesson 6: Flotations  Meaning of floatation  The methods of public issue Lesson 7: distribution of company’s powers  The directors‟ powers  How the board meetings are conducted  The role of the chairman in a company  The delegation of directors‟ powers  Powers, remuneration and removal of the managing director  The qualifications ,legal status and liabilities of the company secretary  The directors vis members in general meetings CAT Lesson 8: the law of meeting  The meaning of meeting  Importance of company meetings  Classification of company meetings  The requisites of a valid meeting Lesson 9: share capital  Meaning of share capital 3

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Types of types of share capital Classes of shares Meaning of stocks Alteration of capital Variation of shareholders rights

Lesson 10: majority rights and minority protection    Meaning of majority power Meaning of the principle of majority rule Protection of minority shareholders or exception to the rules in Foss-v- Harbottle

Lesson 11: accounts and auditors  Requirements of what should be captured by the books of account  The various financial statements that should be presented to the shareholders  The manner of presentation of group accounts to the shareholders  In the manner of appointment ,remuneration and disqualification of the auditors Lesson 12: investigation of a company’s affairs  Explain the process of investigation into a company‟s affairs  Explain the process of investigation of company‟s membership  Explain the alternative power of registrar in matters of company investigation Lesson 13: winding-up  The meaning of winding up  The process of winding up by the court  The process of voluntary winding up  The process of creditors‟ voluntary winding up  The process of winding up subject to supervision Lesson 14: companies and the stock exchange  The reasons for listing in the stock exchange  The major...
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