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Questions and Answers
What is the purpose of the statement of Nominal Capital in the process of incorporation of the Company?
What is the purpose of the statement of Nominal Capital in the process of incorporation of the Company?
What is the return paid or given to a shareholder on their investment in a company known as?
What is the return paid or given to a shareholder on their investment in a company known as?
Which of the following companies is an example of a statutory company in Uganda?
Which of the following companies is an example of a statutory company in Uganda?
The case of Salomon v Salomon illustrates the principle that a company is an agent of the members who have formed it.
The case of Salomon v Salomon illustrates the principle that a company is an agent of the members who have formed it.
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Which of the following is NOT a characteristic of a company in liquidation?
Which of the following is NOT a characteristic of a company in liquidation?
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A business arrangement where two or more companies are combined to constitute one entity is called what?
A business arrangement where two or more companies are combined to constitute one entity is called what?
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Which type of meeting is held only once in the company's lifetime?
Which type of meeting is held only once in the company's lifetime?
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For one to qualify as a director in the company, which of the following is NOT a requirement?
For one to qualify as a director in the company, which of the following is NOT a requirement?
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Study Notes
Company Incorporation
- Nominal Capital: Reflects the total number of shares and their nominal value.
Shareholders and Returns
- Dividend: The return paid to a shareholder for their investment/shareholding in a company
Types of Companies
- Statutory Company: A company established by a specific Act of Parliament, e.g., Public Procurement and Disposal of Public Assets Authority.
Salomon v Salomon
- This case establishes the principle that a company is a separate legal entity from its owners (the members). This means the company is a distinct legal person and can enter contracts, sue or be sued in its own name, and the members' liability is limited to their shares.
Companies in Liquidation
- Liquidation: A process where a company's assets are sold to pay off debts, the company ceases to operate, and the existence of the company is formally terminated.
- During liquidation, the company's management is taken over by a liquidator, who handles the winding-up process.
Business combinations
- Merger: A business arrangement where two or more companies combine to form a single new entity, typically resulting in a new legal structure.
Company Meetings
- Statutory Meeting: A meeting legally required for newly formed companies within a specified period after incorporation.
- Annual General Meeting (AGM): A yearly meeting of shareholders to discuss the company's affairs.
Investment and Shares
- Prospectus: A legal document that details the company's financial information, performance, and plans, providing potential investors with information before buying shares.
- Uganda Stock Exchange: A platform for trading shares of public companies.
Directors
- A director must be of sound mind and above 18 years old, a discharged bankrupt is NOT eligible.
Debentures
- A debenture represents a company's acknowledgment of debt owed to another person.
Managing Director
- For statutory companies, the Board of Directors typically has the power to appoint the Managing Director.
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Description
Explore the fundamental concepts of company law, including nominal capital, shareholders' returns, and the different types of companies. Understand landmark legal cases like Salomon v Salomon and the process of liquidation. This quiz covers essential principles that govern corporate entities.
