Instructions:

Answer all questions.

QUESTION 1

In the case of National Bank of Malawi Limited v. Continental Traders Limited and Another
(2003), the High Court lifted the veil of incorporation to hold a members of the company (the 2nd
defendant) liable for a loan that was given to the 1st defendant by the claimant.

Discuss whether the court was justified in holding the 2nd defendant liable. (20 Marks)

QUESTION 2

a) In reference to formation of a company:

I. Explain the meaning of the term “company”. (2 marks)

II. Explain the meaning of legal “personality” (6 marks)
III. Explain how a company becomes “dormant” (2 marks)

b) In reference to types of companies:

Discuss the extent of liability of members of private limited companies (10 Marks)

Question 3

a) Tino Uni and Tala are planning on setting up a company, neither of them has any
knowledge on how companies are set up. They do not know how best they can raise capital
to kick start their business.
They have now approached you for advice on how to set up their business and raise capital.
Advise Tino, Uni, and Tala. (15 marks)

b) A shareholder is not an employee of a company, however, in some circumstances a person

may be both a shareholder and an employee. Discuss the differences between a shareholder
and an employee (5 marks)

Question 4

Write short notes on the following

a) Fiducially duty
b) Promoter
c) Pre-incorporation contract
d) Dividends
(20 marks)
Question 4

It is argued that the Companies Act no. 15 of 2013 was enacted among other things to consolidate
the law relating to incorporation and to regulate and control how companies are registered and
managed.

Discuss whether or not you agree with the foregoing argument. (20 marks)