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LW/OCT 2008/LAW485

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

: CORPORATE LAW : LAW485 : OCTOBER 2008 : 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. 2. 3. 4.

This question paper consists of seven (7) questions. Answer FOUR (4) questions in the Answer Booklet. Start each answer on a new page. Do not bring any material into the examination room unless permission is given by the invigilator. Please check to make sure that this examination pack consists of: (i) the Question Paper (ii) an Answer Booklet - provided by the Faculty

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of 4 printed pages
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QUESTION 1 a)

LW/OCT 2008/LAW485

It was not until the famous case of Salomon v Salomon & Co Ltd [1897]AC 22 that the full implications of the concept of separate legal entity were recognised. With the aid of the above case, explain the concept of separate legal entity of a company (40 marks)

b)

The principle of corporate personality forms the cornerstone of company law. Yet, exceptionally in some instances, the law is prepared to disregard the corporate personality and have regard to the 'realities of the situation. In view of the above statement, consider four situations under the Companies Act where the separate entity of a company is disregarded. (60 marks)

QUESTION 2 The memorandum and articles of association, when registered, together form the constitution of the company. With reference to the relevant provision of the Companies Act 1965 and with the aid of case law, discuss the legal effect of the above documents. (100 marks)

QUESTION 3 a) Galaxy Sdn Bhd was recently incorporated. The company wishes to appoint an auditor. The board of directors seek your advice on what qualifications auditors need and the procedure for their appointment. Advise them. (30 marks) b) It is imperative that auditors are independent of the company they are auditing The Companies Act ensures this by disqualifying certain categories of persons from being appointed as auditors. State five (5) categories of such persons. (40 marks) c) Ali and Adam are in the process of incorporating a company. Advise them as to why they would need a company secretary and the qualifications of the company secretary. (30 marks)

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LW/OCT 2008/LAW485

QUESTION 4 Answer the following questions with regard to company meetings: a) What is a quorum? Explain the requirements as to a quorum under the Companies Act 1965. (40 marks) Explain the difference between voting by a show of hands and by poll and state who can demand a poll vote? (30 marks) Who is a proxy and what rights does he have in a meeting? (30 marks) QUESTION 5 a) Explain, with the aid of case law, the extent to which the right of a member to transfer his shares in a company may be restricted. (80 marks) Explain the difference between transfer and transmission of shares. (20 marks) QUESTION 6 a) Discuss the circumstances in which a floating charge crystallizes and becomes a fixed charge. (50 marks) Rasa Sayang Bhd created a floating charge (duly registered) in January 2005 over the whole of its assets and undertaking in favour of Juta Bank for a loan of RM500,000. The charge prohibited Rasa Sayang Bhd from creating any other charge ranking in priority to or in pari passu with the floating charge. Recently, Rasa Sayang Bhd suffered a serious financial set-back. To alleviate the problem the company was facing, it borrowed RM300.000 from Cekap Finance and executed a fixed charge over its office premises in Cekap Finance's favour. The charge was duly registered with the Companies Commission. Rasa Sayang Bhd went into liquidation in February 2008. Advise the liquidator on the rights of the parties involved. (50 marks)

b)

c)

b)

b)

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LW/OCT 2008/LAW485

QUESTION 7
a)

Joe, a member of Zorro Bhd wishes to petition for a winding up of the company on the ground that it is just and equitable to do so. He seeks your advice as to the fact situations in which the courts would be likely to grant such an order. Advise Joe, illustrating your answer with relevant cases. (60 marks)

b)

Explain the difference between a voluntary winding up and a compulsory winding up of a company, and state three grounds (other than the just and equitable ground) on which a company may be compulsorily wound up under the Companies Act 1965. (40 marks)

END OF QUESTION PAPER

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