August 2025 CPA CS Company Law Past Paper answers

Description

CPA INTERMEDIATE LEVEL
CS INTERMEDIATE LEVEL
COMPANY LAW
THURSDAY: 21 August 2025. Morning Paper. Time Allowed: 3 hours.
This paper has seven (7) questions. Answer any FIVE questions. ALL questions carry equal marks. Do NOT write anything on this paper.

QUESTION ONE
(a) Enumerate FOUR limitations of a private limited company. (4 marks)
(b) Failure to maintain an accurate register of members can lead to several legal consequences to a company.
Outline SIX of these consequences. (6 marks)
(c) In relation to formation of companies in your country, discuss FIVE differences between a memorandum of association and articles of association. (10 marks)
(Total: 20 marks)

QUESTION TWO
(a) In relation to shares of a company:
(i) Outline TWO differences between transfer of shares and transmission of shares. (4 marks)
(ii) Highlight SIX effects of share transfer. (6 marks)
(b) Explain FIVE requirements for maintenance of capital under the Companies Act in your country. (10 marks)
(Total: 20 marks)

QUESTION THREE
(a) Identify FOUR ways in which the Companies Act ensures protection of minority shareholders during company meetings. (4 marks)
(b) Highlight SIX ways in which a company in your country can raise capital from the public. (6 marks)
(c) A company director at XYZ Ltd. gains access to confidential financial information revealing that the company is about to sign a lucrative contract with a major partner. Before the news becomes public, the director buys significant shares in the company. The deal is announced a week later, causing the share price to rise sharply.
Required
Evaluate FIVE strategies through which XYZ Ltd. could prevent insider trading in future cases involving directors.
(10 marks)
(Total: 20 marks)
QUESTION FOUR
(a) Analyse FIVE circumstances when the liability of a company secretary could arise. (10 marks)
(b) ABC Ltd’s auditor, Mary Keplimo, requested access to some of the company’s data to complete the annual audit. Despite multiple attempts, the management denied her access, citing confidentiality concerns. Mary reminded the management that her rights are protected under the law.
Required:
Explain to the management FIVE rights that Mary Keplimo reminded them about. (10 marks)
(Total: 20 marks)

QUESTION FIVE
(a) Explain the following in relation to company accounts:
(i) TWO responsibilities of directors. (2 marks)

(ii) FOUR contents of a company’s books of accounts. (8 marks)
(b) You have been outsourced as a consultant to assist XYZ Trading Ltd. file its annual returns. The CEO of the company has requested you to make a presentation about the legal obligations of the company regarding filing of annual returns to the new members of the internal audit department to ensure knowledge transfer.

Explain FIVE points that you could include in your presentation. (10 marks)
(Total: 20 marks)

QUESTION SIX
(a) The law allows the court to appoint an investigator to investigate the affairs of a company and to determine who may be held responsible for paying the investigation expenses.
Highlight FIVE parties that might be liable for such expenses. (5 marks)

(b) Summarise the procedure for voluntary liquidation in a company. (5 marks)

(c) Explain FIVE differences between company administration and company receivership. (10 marks)
(Total: 20 marks)

QUESTION SEVEN
(a) State FOUR consequences of an adverse inspector’s report. (4 marks)

(b) Outline SIX strategies that public companies might use to manage employees concerns during a merger. (6 marks)
(c) Global Tech Ltd., a foreign company, began operations in Kenya without obtaining a registration certificate as required by law.

Required:
Evaluate FIVE implications of this scenario on Global Tech Ltd. (10 marks)
(Total: 20 marks)

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