74 Questions
What is the main responsibility of a professional promoter?
To specialize in promoting the company
What distinguishes an occasional promoter from other types of promoters?
Promotes the company once in a while but not on a regular basis
What is the primary role of a financial promoter?
To promote the company financially like a commercial bank
What is one of the functions of a promoter according to the text?
To discover an idea for forming a company
According to the text, what is one duty of a promoter?
To choose bank and legal advisors
Which type of promoter forms the idea and brings the company into existence?
Entrepreneurial promoter
What does an occasional promoter do?
Promotes the company once in a while but not on a regular basis
What is the purpose of the doctrine of constructive notice?
To secure the company from outsiders tricking the company by alleging they were not aware of the content of the MOA and AOA
Which is an exception to the doctrine of indoor management?
Acts within apparent authority
What is contained in the Memorandum of Association (MOA)?
Objectives and powers of the company
What governs the internal management of the company?
Articles of Association (AOA)
What does Doctrine of indoor management provide protection for?
What does Doctrine of constructive notice expect a person to do before any transaction with the company?
To inspect basic public documents such as MOA and AOA
What is an effect of an ultra-vires transaction?
Directors may be held personally liable for ultra vires acts.
What is contained in Articles of Association (AOA)?
Internal regulations of the company.
What does Memorandum of Association (MOA) govern?
Relationship of the company with outsiders.
What is a purpose for which Doctrine of constructive notice is not workable?
To secure the company from outsiders tricking by alleging lack of awareness about MOA and AOA content
What is the consequence if a promoter fails to disclose all material facts and any profit made when selling property to a company they are promoting?
The company may either reject the sale or approve it and recover the profit made
What documents are required for company incorporation?
Memorandum of Association (MOA), Articles of Association (AOA), list of directors, consent letters, capital, and a statutory declaration
What does the Memorandum of Association (MOA) include?
Limits of the company such as its name, registered office, objective, liability, capital, and association
What is required if a change in the company's name is desired?
Approval by the government
How can shareholders alter the capital clause of the MOA?
By passing an ordinary resolution and issuing new shares, dividing existing shares, or cancelling unissued shares
What does the Doctrine of Ultra-vires refer to?
Acts beyond the powers of the directors or the MOA or AOA
What happens if the company's objectives as stated in the MOA are different from the work agreed to in a contract?
The application of ultra-vires may be invoked
How are promoters allowed to be paid?
In various ways including a lump sum, shares, or option to buy shares
What happens if any profit made by a promoter when selling property is not disclosed?
The company may either reject the sale or approve it and recover the profit made
Explain the role of a professional promoter.
A professional promoter is specialized in the job of promoting the company, and their main role is to promote the company and its projects on a regular basis.
What are the functions of a promoter in forming a company?
The functions of a promoter in forming a company include discovering an idea for forming the company, investigating whether the idea is possible and profitable, choosing suitable people as first directors, choosing a name for the company, and choosing bank and legal advisors.
List the four duties of a promoter.
The four duties of a promoter are to act in the best interests of the company, to disclose any personal interest in any transaction or property of the company, to not make any secret profit, and to act with utmost good faith towards the company.
What are the consequences of an ultra-vires transaction?
The consequences of an ultra-vires transaction are: a) The company cannot sue any person to enforce any of its rights. b) No person can sue the company for enforcement of its rights. c) The directors may be held personally liable to outsiders for ultra vires acts.
What is the purpose of the doctrine of constructive notice?
The purpose of the constructive notice doctrine is to secure the company from outsiders who want to trick the company by alleging they were not aware of the content of the Memorandum of Association (MOA) and Articles of Association (AOA), and to escape from their contractual liabilities.
What does the Doctrine of indoor management provide protection for?
The Doctrine of indoor management provides protection to outsiders who deal with the company by giving them the confidence in dealing with the company with limited liability.
What are the exceptions to the doctrine of indoor management?
The exceptions to the doctrine of indoor management are: 1) Knowledge of irregularity. 2) Sufficient ground for suspicion. 3) Forgery. 4) Acts outside apparent authority. 5) Non-existence of agency. 6) Acts ultra vires the company.
What is the difference between Memorandum of Association (MOA) and Articles of Association (AOA)?
The Memorandum of Association (MOA) contains the terms the company must meet to be registered and governs the relationship of the company with outsiders. The Articles of Association (AOA) contains the objectives and powers of the company, provides rules on how those objectives and powers would be effective, and governs the internal management of the company.
What are the main documents required for company incorporation?
The main documents required for company incorporation include the Memorandum of Association (MOA), Articles of Association (AOA), list of directors, consent letters, capital, and a statutory declaration
What are the key elements included in the Memorandum of Association (MOA) of a company?
The Memorandum of Association (MOA) includes the name of the company, registered office, objective, liability, capital, and association
What are the requirements for the name of a company as per the text?
The name of the company must not be identical to an existing company, must end with 'limited' or 'private limited,' and be approved by the government if changed
How can the objective clause of the MOA be altered?
The objective clause of the MOA may be altered by passing a special resolution and filing it with the registrar within a month
In what ways can shareholders alter the capital clause of the MOA?
Shareholders can alter the capital clause of the MOA by passing an ordinary resolution and issuing new shares, dividing existing shares, or cancelling unissued shares
What does the Doctrine of Ultra-vires refer to?
The Doctrine of Ultra-vires refers to acts beyond the powers of the directors or the MOA or AOA
Under what circumstances can the application of the doctrine of ultra-vires be invoked?
If the company's objectives as stated in the MOA are different from the work agreed to in the contract, the application of the doctrine of ultra-vires may be invoked
What are the requirements for the company's registered office as per the text?
The company's registered office must be stated, and any change requires a specific type of resolution depending on the location of the change
What are the consequences of a promoter failing to disclose all material facts and any profit made when selling property to a company they are promoting?
If the promoter fails to disclose, the company may either reject the sale or approve it and recover the profit made
What does the Doctrine of Ultra-vires protect against?
The Doctrine of Ultra-vires protects against acts beyond the powers of the directors or the MOA or AOA
An ______ promoter promotes the company once in a while but not on a regular basis
occasional
Professional promoter specializes in the job of promoting the company
professional
Financial promoter promotes the company ______ly like a commercial bank
financial
Entrepreneurial promoter forms the idea and takes the necessary steps to bring a company into existence and actually brings it into existence
entrepreneurial
To ______ an idea for forming a company
discover
In ______ whether the idea is possible and profitable
investigate
To ______ suitable people as first directors
choose
To choose a ______ for the company
name
To choose bank and legal ______
advisors
To ______ an idea for forming a company
discover
Any change in the company's registered office requires a specific type of resolution depending on the ______ of the change
location
The objective clause of the MOA may be altered by passing a ______ resolution and filing it with the registrar within a month
special
Shareholders can alter the capital clause of the MOA by passing an ______ resolution and issuing new shares, dividing existing shares, or cancelling unissued shares
ordinary
The name of the company must not be identical to an existing company, must end with 'limited' or 'private limited,' and be approved by the ______ if changed
government
The MOA is the charter of the company and sets out its limits, including its name, registered office, objective, liability, capital, and ______
association
Any pre-corporation contracts are void unless authorized by the company's terms of incorporation and communicated ______
acceptance
A promoter may be paid in various ways, including a lump sum, shares, or the option to buy ______
shares
The company's registered office must be stated, and any change requires a specific type of resolution depending on the ______ of the change
location
The ______ of Ultra-vires refers to acts beyond the powers of the directors or the MOA or AOA
Doctrine
The MOA is the charter of the company and sets out its limits, including its name, registered office, objective, liability, capital, and ______
association
Doctrine of ultra-vires refers to the company exceeding its _____________
legal powers
An effect of an ultra-vires transaction is that the company may not be sued for _____________
breach
The Memorandum of Association (MOA) governs the relationship of the company with _____________
outsiders
The Articles of Association (AOA) contains the objectives and powers of the company and provides rules on how those objectives and powers would be _____________
effective
The Memorandum of Association (MOA) cannot be easily changed or altered, while the Articles of Association (AOA) can be easily changed or _____________
altered
The doctrine of constructive notice expects a person to inspect the basic public documents of the company, such as the MOA and AOA, before any _____________
transaction
Doctrine of indoor management provides protection to outsiders who deal with the company with _____________ liability
limited
The Memorandum of Association (MOA) governs the relationship of the company with _____________
outsiders
One of the functions of a promoter is to bring the company into _____________
existence
The purpose of the doctrine of constructive notice is to secure the company from outsiders who want to trick the company by alleging they were not aware of the content of the MOA and AOA, and to escape from their _____________ liabilities
contractual
Study Notes
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A promoter must fully disclose all material facts and any profit they made when selling property to a company they are promoting
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If the promoter fails to disclose, the company may either reject the sale or approve it and recover the profit made
-
A promoter holds a fiduciary position and is not allowed to make any direct or indirect profit at the expense of the company
-
Any pre-corporation contracts are void unless authorized by the company's terms of incorporation and communicated acceptance
-
A promoter may be paid in various ways, including a lump sum, shares, or the option to buy shares
-
Documents required for company incorporation include the Memorandum of Association (MOA), Articles of Association (AOA), list of directors, consent letters, capital, and a statutory declaration
-
The MOA is the charter of the company and sets out its limits, including its name, registered office, objective, liability, capital, and association
-
The name of the company must not be identical to an existing company, must end with "limited" or "private limited," and be approved by the government if changed
-
The company's registered office must be stated, and any change requires a specific type of resolution depending on the location of the change
-
The objective clause of the MOA may be altered by passing a special resolution and filing it with the registrar within a month
-
Shareholders can alter the capital clause of the MOA by passing an ordinary resolution and issuing new shares, dividing existing shares, or cancelling unissued shares
-
The Doctrine of Ultra-vires refers to acts beyond the powers of the directors or the MOA or AOA.
-
If the company's objectives as stated in the MOA are different from the work agreed to in the contract, the application of the doctrine of ultra-vires may be invoked.
-
A promoter must fully disclose all material facts and any profit they made when selling property to a company they are promoting
-
If the promoter fails to disclose, the company may either reject the sale or approve it and recover the profit made
-
A promoter holds a fiduciary position and is not allowed to make any direct or indirect profit at the expense of the company
-
Any pre-corporation contracts are void unless authorized by the company's terms of incorporation and communicated acceptance
-
A promoter may be paid in various ways, including a lump sum, shares, or the option to buy shares
-
Documents required for company incorporation include the Memorandum of Association (MOA), Articles of Association (AOA), list of directors, consent letters, capital, and a statutory declaration
-
The MOA is the charter of the company and sets out its limits, including its name, registered office, objective, liability, capital, and association
-
The name of the company must not be identical to an existing company, must end with "limited" or "private limited," and be approved by the government if changed
-
The company's registered office must be stated, and any change requires a specific type of resolution depending on the location of the change
-
The objective clause of the MOA may be altered by passing a special resolution and filing it with the registrar within a month
-
Shareholders can alter the capital clause of the MOA by passing an ordinary resolution and issuing new shares, dividing existing shares, or cancelling unissued shares
-
The Doctrine of Ultra-vires refers to acts beyond the powers of the directors or the MOA or AOA.
-
If the company's objectives as stated in the MOA are different from the work agreed to in the contract, the application of the doctrine of ultra-vires may be invoked.
-
A promoter must fully disclose all material facts and any profit they made when selling property to a company they are promoting
-
If the promoter fails to disclose, the company may either reject the sale or approve it and recover the profit made
-
A promoter holds a fiduciary position and is not allowed to make any direct or indirect profit at the expense of the company
-
Any pre-corporation contracts are void unless authorized by the company's terms of incorporation and communicated acceptance
-
A promoter may be paid in various ways, including a lump sum, shares, or the option to buy shares
-
Documents required for company incorporation include the Memorandum of Association (MOA), Articles of Association (AOA), list of directors, consent letters, capital, and a statutory declaration
-
The MOA is the charter of the company and sets out its limits, including its name, registered office, objective, liability, capital, and association
-
The name of the company must not be identical to an existing company, must end with "limited" or "private limited," and be approved by the government if changed
-
The company's registered office must be stated, and any change requires a specific type of resolution depending on the location of the change
-
The objective clause of the MOA may be altered by passing a special resolution and filing it with the registrar within a month
-
Shareholders can alter the capital clause of the MOA by passing an ordinary resolution and issuing new shares, dividing existing shares, or cancelling unissued shares
-
The Doctrine of Ultra-vires refers to acts beyond the powers of the directors or the MOA or AOA.
-
If the company's objectives as stated in the MOA are different from the work agreed to in the contract, the application of the doctrine of ultra-vires may be invoked.
Test your knowledge about the different kinds of promoters involved in forming and promoting a company, including professional, occasional, financial, and entrepreneurial promoters.
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