CPA INTERMEDIATE LEVEL NOTES
UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply and comply with the provisions of Company Law in relevant circumstances and environments and further to demonstrate knowledge of the law and regulations governing corporate entities and ensure compliance in practice.
LEARNING OUTCOMES
A candidate who passes this paper should be able to:
- Apply legal principles relating to formation of companies
- Evaluate the rights and obligations of members and shareholders
- Comply with the legal principles governing liquidation of corporates and restructuring
- Comply with the legal principles relating to companies incorporated outside Kenya
- Ensure books of account are prepared in compliance with the law.
CONTENT
Nature and classification of companies
- Nature and characteristics of a company
- Types of companies
- Principle of legal personality and veil of incorporation
- Distinction between companies and other forms of business associations, sole proprietorships, partnerships and cooperative societies.
Formation of companies
- Promoters and pre-incorporation contracts
- Process of forming a company
- Memorandum and articles of association
- Certificate of incorporation
- Effects of incorporation
Membership of a company
- Acquisition of membership
- Register of members
- Rights and liabilities of members
- Cessation of membership
Shares
- Classes of shares
- Variation of class rights
- Share certificates
- Issue and allotment
- Transfer and transmission
- Transfer of shares under central depository system
- Mortgaging and charging of shares
Share capital
- Meaning and types of share capital
- Raising of share capital
- Prospectus/information memorandum
- Maintenance of capital
- Alteration of capital
- Dividends
Debt capital
- Borrowing powers of a company
- Debentures
- Charges
- Registration of charges
- Remedies for debenture holders
Company meetings
- Nature and classification of company meetings
- Essentials of a valid meeting
- Voting
- Resolutions
Directors
- Qualifications, appointment and disqualification
- Powers and duties of directors
- Removal and vacation of office
- Register of directors
- Remuneration of directors
- Loans to directors
- Compensation for loss of office
- Disclosure of director’s interest in contracts
- The rule in Turquand’s case/Indoor Management rule
- Insider dealing
The company secretary
- Qualification, appointment and removal
- Powers and duties of the company secretary
- Liability of the company secretary
- Register of secretaries
Auditors
- Qualification, appointment and removal
- Remuneration of auditors
- Powers and duties
- Rights and liabilities
Company accounts, audit and investigation
- Books of accounts
- Form and content of accounts
- Group accounts
- Director’s report
- Auditor’s report
- Annual returns
- Investigation of company affairs
- Appointment and powers of inspectors
- Inspector’s report
Corporate restructuring
- Need for restructuring
- Mergers,
- Post merger reorganisation
- Takeovers and acquisitions
- Schemes of arrangement and compromises
- Reconstruction
Receivership and liquidation of companies
- Meaning of receivership
- Appointment and vacation of office
- Powers and duties of a receiver
- Termination of receivership
- Meaning of liquidation
- Types of liquidation
- Appointment, powers and duties of liquidators
- Discharge of liquidators
- Distribution of assets and dissolution of companies
Companies incorporated outside the country
- Process of registering a company
- Certificate of registration
- Power to hold land
- Registration of charges
- Accounts of foreign companies
- Service of process and notices on foreign companies
- Returns
- Penalties
- Cessation of business
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