QUESTION ONE

Lord Mac Naqhten in the matter of salmon v. Salmon once held; "the compo..
law a dittetent petson altogether from the subscribers to the metnonandu,y i .
though it may be that after incorporation the business is pteciously (he same was
betote and the same persons are managers and the same hands receive profits,
the company is not in law the agent o/ the subscribers or trustee ot thenr,
However, in the light of the above ruling, one of the types of the companies
provided by the Companies Act, 2002 is unlimited liabiJl!ies companies. What are
the differences between unlimited liabilities companies and partnership business
undertaking? (Total = 20 marks)

QUESTION TWO
"Memorandum and Articles of association are very important documents to be
lodged before the Registrar for the purpose Of incorporation Of the Company.
However, a company may be registered without the later document because if there
is any ambiguity table A of Cap. 212 may apply; the same cannot happen to the
Memorandum of Association because it contains the fundamental conditions upon
which a company can be registered." Anonymous. In the line of the above assertion
explain the importance of Memorandum of Association.
(Total 20 marks)

QUESTION THREE
You have been invited to deliver a speech on various business associations on National
Wamachinga Day held at Viwanja vya Mwembeyanga Dar es Salaam. After delivery of
your speech, Kalumanzila one of a delegate from Kazulamimba Kigoma approaches
you for clarification on advantages and disadvantages Of sole proprietorship; assist
him.
(Total 20 marks)

QUESTION FOUR
Mayele Co Ltd is a company incorporated under Tanzanian Laws. Currently is facing
Financial Difficulties and have decided to issue cumulative and non-cumulative shares
to interested purchasers. Mr. Aucho while sipping his Moet at the counter of
Mwananchi Park saw the company offer being aired in one of the social media it has
been his dream to own shares. He got interested on advert but has never ever heard
about two concepts; cumulative and non - cumulative preferential shareholding.
Knowing that you have done corporate law at IAA he decided to call you for advice. He
is interested to know which suits him most as an investor and why. In addition, which
one among the two works in favour of the issuing company and why.
(Total 20 marks)
QUESTION
a) There is misconcept b) Differentiate clear distinction between Ion between them.
(5 'Winding Marks) up" and "dissolution" concepts. Make a

Marks) members' winding up and Creditors' winding up. (15 (Tota1220marks)

 QUESTION ONE

(a) With examples for each, distinguish substantive law from procedural law.
(8 marks) ,
(b) Mwanasesere is a student pursuing a diploma in Accountancy. In her
business law examination she concluded an essay as follows;
"According to the constitution of the United Republic of Tanzania of
1977, as amended from time to time, the parliament has the primary
role of making law, among its other functions. Therefore, due to this,
the other organs of the state [Judiciary and Executive], cannot possibly
make law since doing so would be equal to involving themselves with
the functions of the parliament, which is absolutely illegal."
REQUIRED
Do you agree with her conclusion? Explain with reasons. (14 marks)
(Total = 20 marks)
QUESTION TWO
In relation to laws relating to companies in Tanzania;

(a) Mention and explain the main types Of companies recognised in Tanzania.
(10marks)

(b) State and explain the promoters' duty not to make profit to the detriment of the
company.
10mark

y QUESTION THREE
(i) Differentiate winding up and dissolution terms used in company law
(ii) State ways upon which a company may be rescued from winding up?

(Total = 20 marks)
QUESTION FOUR
"The rule in Foss v Harbottle, as I understand it, comes to no more than this. First, the
proper plaintiff in an action in respect of a wrong alleged to be done to a company or
association of persons is prima facie the company or the association of persons itself'
Secondly, where the alleged wrong is a transaction which might be made binding on the
company or association and all its members by a simple majority of the members, no
individual member of the company is allowed to maintain an action in respect Of that
matter for the simple reason that, if a mere majority of the members of the company or
association is in favour of what has been done, then cadit quaestio. No wrong has been
done to the company or the association and there is nothing in respect of which anyone
can sue. If, on the other hand, a simple majority of members of the company or
association is against what has been done, then there is no reason why the company or
association itself should not sue. In my judgment, it is implicit in the rule that the matter
relied on as constituting the cause of action should be a cause of action properly
belonging to the general body of corporators or members of the company or association
as opposed to a cause of action which some individual member can assert in his own
right." Anonymous.
Required: Explain the principles laid down by the above quoted reasoning and the
exceptions thereto.

(Total = 20 marks

QUESTION FIVE
On 20th May, 2023 Mayele, Saido and Muganyizi decided to form a business association
to supply sports garments a business which is carried by them as sole proprietors. Their
idea is that the formed business association will not bar them from doing their current
business. The members appointed Muganyizi to be their leader and they agreed to
contribute the capital as follows, Mayele Tshs. 50, 000,000/, Saido Tshs.
and Muganyizi agreed to contribute a piece of land measuring 10 hectors
found in Katerero Kagera. On 15th June, 2023, the three friends entered into a contract
with TFF to supply sports outfits for Taifa Stars. On 21 June, 2023, Muganyizi travelled
to Katerero where he sold the land for and on return to Dar es
Salaam he accounted Tshs. to his fellow business men claiming to be the
proceeds for the sold land. On 26th June, 2023, the new entity became into existence.
They have approached you for clarifications on the following issues.
 a) Which business undertaking is suitable for the three friends and why.

b) What is the legal name known the three friends

i)prior 26th June, 2023
ii) after 26th June,
2023
c) What documents are needed to form the sought business association
d) What is the name given to the contracts entered by them on 21st June, 2023.
e) What mistakes did Muganyizi commit (if any)
(Total=20marks)