1. A school of thought is of the view that a limited liability company is said to be best in respect of setting up a business, others are of the opinion that a limited liability just shifts the burden of the failure of business to a non-existent person called a company and its creditors.

a) with the aid of the Company's Act 1960, Act 179 and decided cases, discuss what is termed as a limited Liability Company                                                                

b) According to case law and statute, at what time is a company liable for acts committed by its directors.

c) Discuss the Mechanics of Incorporation 

d) Explain the Ultra Vires Principle

2

Victoria Adamson and Bobby Lemay opened a partnership business to deal in office supplies, learning  materials  and  a  book  distribution   company.  The  business  becomes  extremely successful,  and they open up a number of branches in other regions.  In order to expand the business, they consulted their lawyers to incorporate the business. The new company was to be called 'Lemdams Stationery Ltd.' Naomi Adade a renewed upcoming children's book writer was eagerly seeking to sign a contract with a distributing company around the time Victoria and Bobby decided to register their company. Victoria and Bobby approach Naomi and asked her to do business with them and gave her deals she wasn't able to resist. The duo tells Naomi

that the name of their company was Lemdams Ltd.  Eager to get a distributor for her books and also wanting to get the distribution gig, the duo did not wait for the incorporation and enters into the contract using the name Lemdams stationery ltd.  After some few months, Victoria and Bobby now bring on Covidson and Maskacne on board as directors. The certificate of incorporation is then issued.  and,  at the first board meeting of the new company,  the contract is ratified by the board. Shortly after, Naomi finds out that Victoria and Bobby at the time of signing the company and says that she will sign with another company because she was lied to in the beginning.

With the aid of decided cases and statute;  Discuss

a)  Ratification and incorporation 

b)  Duties of promoters

c)  Duties of Directors

d) Separate legal entity Principle

 3

JOE  PAPAYAA a young entrepreneur conceived the idea of establishing a company which when is registered shall be known as  MOKOSANE   ENTERPRISE  with the sole aim of investing in gold trade and other precious jewellery.  K-PELLE,  a popular returnee from Japan popularly called K-PELLE  ONE through his niece MASK alias QUARANTINE placed an order for Four hundred pounds of bauxite and paid DOLLARS 500, 000 for same. Out of the DOLLARS 800,000 being the total cost of the diamond, she agreed to pay the balance of DOLLARS 400,000 in two monthly instalments. However, K-PELLE could not fulfil her prom1se.

With decided cases advice  MOKOSANE  ENTERPRISE  on its chances of success  1n instituting legal action and his chances of success.                                  

 4

Abena Abrafi is the managing director ofHot Mama ltd. She employed Deborah as her personal assistant. Deborah has worked with Hot Mama and Abrafi for 3  years and has represented Abena Abrafi in some meetings with other companies and has indicated severally that she was in a management position at Hot Mama several times to clients and other potential clients. Abena Abrafi travelled to the Uk with Delali Kush who was an investor and potential investor for the company. Deborah in the absence of Abrafi signed documents and approved contracts  on behalf of the company. A client unsatisfied with the services provided has sued Hot Mama ltd and Deborah for goods not matching the descriptions made and also for negligence. Abena Abrafi has called for a board meeting to resolve the suit against the company and Deborah is saying that she is not a director of the company so she does not know why she is being sued

a) what are the chances of success of the company winning the suit 

b) Can Deborah be joined to the suit