KOLEJ TUNKU ABDUL RAHMAN SCHOOL OF BUSINESS STUDIES ACADEMIC YEAR 2008/2009 APRIL/MAY EXAMINATION ABBL3144 CORPORATE LAW

AND GOVERNANCE DATE: DIPLOMA IN BUSINESS STUDIES (ACCOUNTING) TIME:

Instructions to Candidates: The examination paper is divided into TWO (2) SECTIONS. SECTION A is COMPULSORY and carries 40 marks. Candidates should attempt THREE (3) questions from SECTION B and each question carries 20 marks. You should allow yourself approximately 70 minutes to answer the questions in Section A and 35 minutes for each of the questions in Section B. Begin each question on a new page.

This question paper consists of 6 questions on 4 printed pages.

2 ABBL3144 CORPORATE LAW AND GOVERNANCE SECTION A: Answer ALL questions (40 marks). Question 1 (a) Explain the difference in a members liability between a company limited by guarantee and a company limited by shares. (4 marks) What are the various rights of a company after incorporation? (4 marks) (c) (d) (e) What is the quorum for a meeting and when must it be satisfied? (4 marks) Identify the differences, if any, between a companys memorandum and articles of association. (4 marks) Is there a time limit for registration of charges? If so, what will happen if the charges are not registered? (4 marks) Provide TWO (2) circumstances where a director may claim for compensation for loss of office. (4 marks) (g) (h) How is corporate governance defined by the Malaysian Code of Corporate Governance? (4 marks) Briefly explain any TWO (2) ethical theories. (4 marks) (i) (j) Describe FOUR (4) duties of a company secretary. (4 marks) Explain the concept of openness and honesty in corporate governance. (4 marks) [Total: 40 marks] .

(b)

(f)

This question paper consists of 6 questions on 4 printed pages.

3 ABBL3144 CORPORATE LAW AND GOVERNANCE SECTION B: Answer THREE (3) questions only (60 marks). Question 2 (a) Sam and Alice are planning to start a business in manufacturing clothes. After much consideration they decided to set up a company. However, they are not sure as to whether they should start a private limited or a public limited company. They intend to expand their business to capture China markets in the future. Advise Sam and Alice on the differences between private limited companies and public limited companies. (10 marks) The veil of incorporation is the concept of a body corporate being separate from its members. However, in certain circumstances the court would ignore the concept of separate legal personality of the company and would then lift the veil to look at the controllers or the members of the company. Discuss FOUR (4) situations when the court would lift the veil by statute. (10 marks) [Total: 20 marks]

(b)

Question 3 (a) Alpha Berhad plans to expand its business and it would require more funds. Advise Alpha Berhad on the differences between share capital and loan capital. (10 marks) (b) Define who a promoteris and discuss the various duties of a promoter. (10 marks) [Total: 20 marks]

Question 4 Tau Yuen Sendirian Berhad manufactures computer chips. The directors seek your advice on the requirements and procedures that must be followed under Companies Act 1965, if the company plans to: (a) (b) (c) Change its name to Kai Suen Berhad; (8 marks) Convert to a public limited company; (7 marks) Change its articles of association. (5 marks) [Total: 20 marks]

This question paper consists of 6 questions on 4 printed pages.

4 ABBL3144 CORPORATE LAW AND GOVERNANCE Question 5 Lucy Berhad manufactures and sells health products. The directors of the company seek your help in the following matters: (a) (b) Ally is 80 years old this year. Can she be appointed as a director of the company? (5 marks) What is the procedure if a member wants to remove a director in Lucy Berhad? (7 marks) (c) Lucy Berhad took a loan from Money Banking. The bank requires them to charge the companys building and land as security for the loan. Explain to the directors the main features of fixed charges and floating charges. (8 marks) [Total: 20 marks]

Question 6 (a) Discuss FIVE (5) fundamental ethical principles that a professional accountant is expected to comply with. (15 marks) What is wrongful trading under the Companies Act 1965? (5 marks) [Total: 20 marks]

(b)

This question paper consists of 6 questions on 4 printed pages.