Problem 1:
Shop Smart Supermarkets Limited (SSS) was incorporated in December 2020 with an authorized share capital of 5,000,000 shares of Sh. 10 each. The share capital is fully issued and fully paid. The original constitution gave the directors authority to issue the initial authorized share capital.
The directors are proposing to purchase a small shop from 'My Shop' or Sh. 3,000,000 and to finance the purchase by a fresh issue of 2,000,000 shares of Sh. 10 each to 'My Shop'. In order to re-equip the shop they propose to raise additional capital by issuing a further 2,000,000 shares of Sh. 10 each. The directors propose that 1,000,000 of these shares should be offered to existing shareholders and 1,000,000 to the general public. All the additional shares are to be offered at Sh. 15 for each Sh. 10 par value share.
Required
a) Explain three ways in which a person would become a member of Shop Smart Supermarkets Limited (SSS) Limited.
b) Describe two circumstances under which the veil of incorporation of Shop Smart Supermarkets may be lifted by the court.
c) Justify five registers that must be kept at the Shop Smart Supermarkets registered office.
Problem 2:
a) Using a company of your choice, explain three requirements of the Company's Act that relate to the company giving financial assistance to purchase its own shares. What are the Consequences of non- compliance with these requirements.
b) Chip and Chop limited (CCL)is a key supplier of pre- packed food ingredients. One of their key customers, Fresh and Spicy Hotel (FSH) has accrued debts over the past six months amounting to sh.20,000,000. CCL has moved to court on an effort to recover the debt. Advice CCL on how to demonstrate that the FSH is unable to pay its debts?
Problem 3:
a) Describe Three kinds of resolutions that may be passed at general meetings. State the difference between them and list matters that require such resolutions to be passed before they can have effect.
b) James and Shem proposed to form a company by the name "Micromine Limited". On behalf of the proposed company, Shem entered into contracts to purchase office furniture and stationery. What are the company's liabilities under such contracts after incorporation?