Dear Call to bar aspirant, we know how important getting called to the Nigerian Bar is. This is why we have decided to launch a MCQ application later this year which will help law school students in tackling the law school MCQ exam. The questions and answers have been compiled using the current law school curriculum and text books such as Property Law in Nigeria by Y.Y Diadem, Criminal Procedure Laws & Litigation Practice by Bob Osamor, Civil Procedure in Nigeria by D.I Efewerehan and Essentials of corporate law practice in Nigeria by C.S Ogbonaya just to mention a few. The questions were drafted and review by lawyers and lecturers who know exactly what the law school should require of every candidate. Bellow are 100 questions from corporate law practice. This course was selected to be published because we have discovered that over the years, this is one of the main courses that Bar aspirants have issues with (aside property law practice of course). Furthermore,if a Bar aspirant can get 20 marks in each courses with the help of our MCQ app and questions, it will be much easier to pass the bar exams. However, the application will come with all the 5 law school courses when it’s eventually lunched. Kindly leave your comments and feel free to report any controversial question to contact@solohan.com.ng. Or Dm your email address to us and We will be glad to respond promptly. Anticipate and Make sure you tell a friend. Thank you for the love and support so far. Your success is our number one priority !!
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SOLOHAN & CO NIGERIAN LAW SCHOOL MCQ LIKELY QUESTIONS AND ANSWERS
CORPORATE LAW PRACTICE
CORPORATE LAW PRACTICE MCQS
1) In a winding up proceeding, the judicial body vested with jurisdiction is:
a) Failed Corporations Tribunal
b) The Federal High Court *
c) State High Court
d) Investment and Securities Tribunal
2) A proposed change to a Public Company must be with the consent of:
a) The Annual General Meeting *
b) The Nigerian Stock Exchange
c) The Nigerian Investment Promotion Commission
d) All the subscribers
3) One of these documents is not required to effect the change of status to a public company:
a) Statutory declaration by a director and secretary
b) A written statement certified on oath
c) Special resolution
d) Statement of Source and Application of funds *
4) In winding up a company compulsorily by the Court, the company is deemed wound up:
a) When the courts makes a winding up order *
b) When a liquidator is appointed
c) Three months after registration by CAC of the accounts and returns of the final meeting of the company from the liquidator
d) When the court makes a dissolution order on the company on the application of the liquidator
5) A participant in collective investment schemes is best described as except one:
a) Shareholder
b) Unit holder *
c) Debenture
d) Stakeholder
6) One of the following is a process whereby the members in a General Meeting resolve by a way of special resolution that the company by wound up and that the liquidator be appointed and authorized to sell the whole or part of the undertaking or assets to another corporate body
a) Arrangement by compromise
b) Arrangement on Sale *
c) Dissolution of Company
d) None of the above
7) All but one of the following constitutes the financial statement of a Nigerian Company *Sects 335,336,337,340,341 CAMA*
a) The balance sheet as at the last day of the year
b) A value added statement for the year
c) A statement of the implication and application of opportunities *
d) The Directors report
8) One of the following is a person entitled to receive Financial Statements
a) Debenture holders
b) Every member of the company
c) Other persons entitled
d) All of the above *
A director must be 18 years and above. In respect of a public company a person who is 70 years old and above cannot be a Director.
9) The above statement is:
a) True
b) False *
c) True after commencement of business
d) True but if amended with a resolution
10) One of the following is not a post incorporation alteration
a) Change of trustee
b) Changes in particulars of business name
c) Change of corporate name
d) None of the above *
11) A situation where a manufacturing company has no raw materials to manufacture its product in Nigeria thus depends on imported raw materials may lead to the company enjoying one of the following investment incentives and reliefs
a) investment tax credit
b) pioneer status
c) duty draw back *
d) importation relief
12) CERPAC means
a) Combined Expartriate Residence Permit and Aliens Credit
b) Combined Expartriate Residence Permit and Allowance Card
c) Combined Expartriate Registration Permit Authorized Card
d) Combined Expartrate Residence Permit and Aliens Card *
13) Interested members of the public are allowed to make input in dissolution of one of these organizations:
a) Business name
b) Partnership
c) Companies
d) Incorporated trustees *
14) The proprietors of “Eyoma, Ufedo and Abudabi” are exempted from registration under PART B of the Companies and Allied Matters Act because their business name is made up of:
a) Initials of their forenames and their surname
b) Their forenames only
c) Their full names
d) Their surnames only *
15) One of these methods can be adopted to compel holdings of annual General Meeting
a) Petition of winding up
b) Requisition of Directors
c) Application to the Corporate Affairs Commission *
d) Reputation by the shareholders
Standard Bagging Co Plc is one of the most popular companies in Nigeria. Shekina Adama is the Company Secretary while Chief Chiwetalu Gideon is the Chairman. In a board meeting held on the 20th of April, 2017 Chief Gideon arrived 10 minutes after commencement of the meeting.
16) The Board meeting has the right to do the following except:
a) Appoint Managing director for the company
b) Recommend dividend for the company
c) Remove the company secretary
d) Increase the capital of the company *
17) Assuming Shekina Adama was removed as the company secretary at the meeting, notice of removal must be given to CAC within
a) 14 days of removal *
b) 7 days of removal
c) 15 days of removal
d) 21 days of removal
18) Where it is intended to remove the secretary of a public company, the board of directors shall give him notice stating all but one of the following: sect 269 CAMA
a) Stating that it is intended to remove him
b) Setting out the grounds on which it is intended to remove him
c) Giving him an option to resign within 21 days *
d) Giving him a period not less than seven working days within which to make his defense
19) Minutes of a Board meeting by Law, may be recorded in:
a) Flash drive
b) Bounded book
c) Loose-leaf sheets
d) All of the above
20) The contents of financial statements include the following except:
a) Value added statement
b) Cash flow statement
c) Director’s report
d) Five year financial summary
21) In one of the circumstances where the law will disregard the corporate entity and look instead at the individual members is one if at any time the number of members falls below 2 and the company carries on business for more than……… section 93 CAMA
a) 21 days
b) 6 months *
c) 7 days
d) 3 months
22) All but one of the following are circumstances where the law may disregard the corporate entity (lifting the veil) and look instead at the individual members
a) To prevent fraud or improper conduct
b) Public policy in times of war to see if company if an alien enemy
c) To monitor Bond Indemnity for company *
d) In order to allow group of associated companies to be treated as one
23) One of the following is not a document to be comprised in a company’s financial statement S.334
a) Profit and loss account
b) Director and Auditor’s report
c) Financial monthly spread out *
d) Balance sheet
24) The Director’s report in a financial statement is to contain vital information on one of the following Schedule 5 Part 1
a) Assets value
b) Employees involvement and training
c) All of the above *
d) None of the above
25) A new company has a certain length of time after incorporation to lay before the company in general meeting its financial statement S.345
a) 12 months
b) 1 year
c) 24 months
d) 18 months *
26) Mr. Do-good was appointed to carry out the winding up of a company, to get in and realize the property of the company, to pay its debts and to distribute the surplus among members. He is the ___
a) Official receiver
b) Liquidator *
c) Contributory
d) None of the above
27) One of the following is disqualified from being appointed as an external auditor of a company S.358 (1)
a) A member of a body of accountants in Nigeria
b) An independent firm of accountants
c) A body corporate *
d) None of the above
28) A company cannot by ordinary resolution remove an auditor before the stipulated time in an agreement between it and him
a) True
b) False *
c) Only by specialized resolution
d) None of the above
29) Special Notice of — days shall be required for any resolution of removing an auditor before his time expires S. 364
a) 21 days
b) 1 month
c) 28 days *
d) 6 months
30) Every person liable to contribute to the assets of a Company in the event of winding up is called:
a) A contributory *
b) A share defaulter
c) A creditor
d) A Debenture holder
31) An infant is absolutely prohibited from applying to the Corporate Affairs Commission for the registration of a:
a) Sole proprietorship as a Business Name
b) Non-Profit organization under Part C *
c) Private Company Limited by shares
d) a & b above
32) which of the following statements is incorrect
a) a company whose name was struck off may be restored within a period of 20 years upon application
b) winding up is not necessary in striking off the name of a company
c) striking off by CAC is a regulatory power CAC exercises in respect of companies that violate the provision of CAMA *
d) striking off the name of a company by CAC under S.525 CAMA is for defunct companies
33) Appeal from the decision of the Investment and Securities Tribunal lies to the:
a) The supreme court
b) Court of Appeal
c) National Industrial Court
d) Federal High Court *
34) All but one of the following are the three major steps in the procedure for a large Merger:
a) Post Approval Notification to SEC
b) Post-Merger Notification to CAC
c) All Formal Approval *
d) Pre-Merger Notification to SEC
One of the following is incorrect:
35) A participant in collective investment scheme is best described as:
a) A shareholder
b) Unit Holder *
c) Debenture Holder
d) A Stakeholder
36) The Company can only be dissolved after:
a) The General Meeting has received the Final Accounts
b) The removal of the liquidator
c) Preparation of final accounts by the liquidator
d) Returns have been forwarded to the Commission *
37) In which of these companies is there no automatic right to proxy attendance at General Meetings?
a) Unlimited Company
b) Public Limited Liability Company
c) Company Limited by Guarantee *
d) Private Limited Liability Company
38) One of these debentures is most appropriate for a Debenture holder who wishes to be a shareholder of the company
a) Perpetual debenture
b) Bearer Debenture
c) Convertible Debenture *
d) Registered Debenture
39) Incorporation Documents include:
a) The memorandum and article of association
b) Contributory bonds *
c) Statement of authorized share capital signed by at least one director
d) Particulars of the first directors
Ore Kelewa Fashion House Plc and Miss Pepeye Designers Plc are rival companies in the lucrative fashion design business sector of the Nigerian Economy. A bitter boardroom crisis among the directors has impacted negatively on the business of Ore Kelewa Fashion House Plc. The Take Over Bid made by Miss Pepeye Designers Plc was rejected by the highly polarized board of Ore Kelewa Fashion House Plc.
40) Assuming the board room crisis of Ore Kelewa Fashion House Plc has grounded its operations in the past two years, which of the following options is most suitable if Miss Pepeye Designers Plc is still interested in acquiring it as a Moribund Company?
a) Arrangement on Sale *
b) Arrangement or Compromise
c) Merger
d) Purchase and Assumption
41) Which of the following restructuring options is not legally permissible between the twon companies above?
a) Take Over
b) Merger
c) Management-Buy-In
d) None of the above *
42) By the provisions of the Investment and Securities Act, 2007, the Take Over Bid by Miss Pepeye Designers Plc must target at least:
a) 25% of the total shares of the offeree
b) 30% of the total shares of the offeree *
c) 40% of the total shares of the offeree
d) 50% of the total shares of the offeree
43) The Investment and Securities Tribunal is duly constituted if consists of:
a) 10 members
b) 5 members
c) 2 members
d) 3 members *
44) In the event of the decision/judgement delivered by Investment and Securities Tribunal being challenged, the aggrieved party shall appeal to:
a) Court of Appeal *
b) Federal High Court
c) Supreme Court
d) National Industrial Court
45) An award of judgment of the Tribunal shall be enforced as if:
a) It was a judgment of the Federal High Court upon registration of a copy of such award or judgment with the Chief Registrar of the Federal High Court *
b) It was the judgment of the High Court upon registration of a copy of such award or judgment with the Chief Registrar of the High Court
c) It was a judgment of the Court of Appeal upon registration of a copy of such award or judgment with the Chief Registrar of the Court of Appeal
d) It was a judgment of the Supreme Court upon registration of a copy of such award or judgment with the Chief Registrar of the Supreme Court
46) The following is correct about the Investment and Securities Tribunal except-
a) The tribunal may make rules regulating its procedures
b) The tribunal shall have the power to review its decision
c) The proceedings of the Tribunal may be held in camera
d) The Tribunal has both civil and criminal jurisdiction *
Avalanche Nigeria Limited was incorporated on 2nd July, 2015 and its first board of directors meeting was held within the period stipulated by Law. At another board of directors meeting held on the 3rd February, 2016, the chairman Mazi Okoroafo did not arrive until two hours after the time the meeting was scheduled to commence. Three of the six members of the board of directors present passed a resolution appointing Zaki Terver to preside at the meeting.
47) The following are the agenda of the first Board of Directors Meeting except:
a) Appointment of Chairman
b) Appointment of Managing Director *
c) Appointment of Secretary
d) Appointment of Auditor
48) The following statements are correct about the Chairman of the Company except:
a) The Chairman is the only person that has rights to casting/second vote in the event of a tie in voting
b) The Chairman presides over Board Meetings and General Meetings of the Company
c) Where the Chairman of the Company is late to the Board of Directors Meeting by 5 minutes, the other directors present can appoint one of themselves to preside at the meeting
d) The Chairman sees to the day to day running of the company *
49) The annual return of Magnet Plc must be filed within _______ days of holding the AGM:
a) 60 days
b) 42 days *
c) 40 days
d) 90 days
50) The Statutory meeting of a company should be held within _______ of commencing business
a) 150 days
b) 5 months
c) 6 months *
d) 3 months
51) The Directors of a public company must lay the financial statement of the company not later than ________ month(s) after incorporation:
a) 6 *
b) 12
c) 8
d) 1
52) A company is required by Law to keep one of the following Financial Statements:
a) Statement of Accounting Policies
b) Statement of Source and Application of Funds *
c) Group Financial Statements
d) Value Added Statement
53) One of these is the most appropriate forum for an action for recovery of unaccounted proceeds of share investment against stock brokerage company where a claimant is also a shareholder:
a) Federal High Court
b) State High Court
c) Investment and Securities Tribunal *
d) National Industrial Court
54) A process by which a Company in distress can rebrand and bounce back to business with or without losing its identity is called:
a) Take Over
b) Merger *
c) Arrangement and Compromise
d) Arrangement on Sale
55) One of these persons cannot challenge alteration of object clause of a Company:
a) Holders of 15% of paid up shares of the company
b) Secured debenture holders
c) A member who lost the vote *
d) None of the above
56) One of these methods is not used in commencing action in corporate proceedings at the Federal High Court:
a) Originating Summons
b) Writ of Summons
c) Originating application
d) None of the above
57) Vacation of the Office of a Director ca be by all but one of the following
a) Removal
b) Instigation *
c) Resignation
d) Death
58) One of the following is a function of the Corporate Affairs Commission
a) Arrange or conduct an investigation into the affairs of any company where the shareholders and the public so demand
b) Other activities as are not necessary for giving full effect to the provisions of CAMA
c) Regulation of assisting in advertising corporate bodies in the proper light
d) Allotment of Securities *
59) In all of the following a private company with share capital may be re-registered as a public company except one:
a) An application for re-registration is delivered to the Corporate Affairs Commission with the prescribed documents
b) A special resolution is to be passed that the company be registered as a public company
c) Within 21 working days prior to the commencement of a quarter disclose to the SEC its quarterly earnings forecast *
d) all of the following
60) The procedure for obtaining statutory information about companies based on the requirement for filing of certain documents is termed “Company Search”. This would reveal all but one of the following documents
a) Memorandum and articles of association
b) Most recent accounts and annual returns
c) Trust and beneficiaries *
d) Capital documents
61) One of the following is not a clause found in the Memorandum of Association
a) Statement that the registered office will be situated in Nigeria
b) The name of the company
c) A statement that the company is either a private or public company
d) None of the above *
62) One of the following is a duty of the chairman
a) He maintains order
b) He declares results of every voting
c) He should guide the meeting through its business
d) All of the above *
63) A proxy document may be validly rejected by the company in the following circumstances except one:
a) If it contains alteration of a major character which is not initialed
b) By a special resolution
c) If it is unsigned
d) If it is received within the stipulated time
64) The business usually transacted at the first board meeting should include the following
a) Update on the creation of common seal
b) Appointment of security and bond investment
c) Opening of Statutory registers *
d) None of the following
65) List the duties commonly performed by the secretary before, during and after a meeting
66) Highlight some of the differences between the legal requirements for an AGM and a board meeting.
67) Section 401 of CAMA provides that the winding up of a company may not be effected one of the following ways
a) Voluntarily
b) By the court
c) Subject to the supervision of the court
d) None of the above *
68) One of the following is not part of the procedure for creditors’ voluntary liquidation
a) Court orders that a company be wound up *
b) Shareholders special resolution for the liquidation is passed
c) Appoint a liquidator at the meeting of creditors
d) Advertise creditors meeting in a national newspaper
69) In compulsory liquidation as soon as the official receiver is appointed the powers of the directors are transferred to him
a) True
b) False
c) All of the above *
d) None of the above
70) One of the following does not belong among the options listed below
a) Preference shares
b) Insolvent shares *
c) Redeemable shares
d) Deferred shares
71) In the Notice following a reminder of fourteen days given to shareholders concerned for forfeiture of shares all but one of the following except one are part of the notice
a) A warning as to the likely forfeiture if the money is not received
b) Particulars of amount owed plus any amount of interest payable on them
c) Allotment letters are posted to shareholders *
d) The place and time for payment of the money due
72) In dealing with forfeited shares all but one of the following is an option
a) The shares will not be cancelled *
b) The shares may be reissued
c) The shares may be transferred to a new purchaser
d) The shares may be cancelled
Efe Peter, Bisola Bakare and Marvis Ojo were attached to the Law Firm of Biggest Brother & Co and came for the registration of a company. The client desires that the name of the company Betty’s World Ltd. If it was not possible then FCT Betty Global Touch Limited.
73) What will be the minimum share capital of the above company?
a) 250,000
b) 500,000
c) 50,000
d) 25,000
74) The names as suggested above are called………………..
a) Preferred and less preferred
b) Alternate and preferred
c) Preferred and alternate *
d) Weighted aid
75) If the second name is denied, which of the following reasons will be most probable cause:
a) That is conflicts with the existing name
b) That it is a prohibited name
c) That it is a restricted name *
d) That it is a reserved name
76) The Central Securities and Clearance System Ltd is responsible for one of the following.
a) Ensuring the transaction with AGIS is valid before publishing stock online
b) Monitoring the transactions as regards partnerships and SMEs
c) Updating the rules on Merger clearance electronically
d) Clearing, settlement and delivery of transaction on stock exchange electronically *
77) Section 334(1) CAMA requires the directors to prepare financial statements for the year. All but one are examples of these financial statements
a) Profit and Loss Account
b) Cash Flow Shareholders Account *
c) The Directors’ report
d) Value added statement
78) One of the following is a function of the Securities and Exchange Commission
a) Enter and seal up the premises of persons legitimately carrying capital market operations
b) Promote investors’ education and training of all intermediaries in securities industry *
c) Receiving application forms for public issue and offer for subscription
d) To make sure underwriters agree to procure sub-underwriters for overriding commission
Alhaji Haruna has decided to engage in business wth his family, friends and colleagues, using his wide experience and connection made while he worked in the Oil Sector. He is also interested in engaging in a community development project which would be independently managed though income from his business activities.
79) One of these is the most appropriate business organization Alhaji Haruna should form with his said friends
a) Company Limited by guarantee
b) Private company limited by shares *
c) Unlimited Company
d) Public company limited by shares
80) One of these Statutory Forms is not required to form the most appropriate business organization in (79) above
a) Availability check and reservation of name
b) Statement of share capital and return of allotment of shares
c) Notice of registered office
d) Trustee declaration form *
81) Although Alhaji Haruna can engage other professionals other than Lawyers to register the business organization, but such other professional must engage a Lawyer for the completion of one of these statutory forms:
a) Particulars of Directors (CAC 1)
b) Notice of Registered Office (CAC 3)
c) Availability Check and reservation of Name (CAC 1)
d) Declaration of Compliance (CAC 4) *
82) Which of the following is the most appropriate for Alhaji Haruna’s Centre for Community Development Project?
a) Incorporated Trustee *
b) Partnership
c) Business Name
d) Company Limited by Guarantee
83) Which of these instructions is not necessary to be taken from Alhaji Haruna to register the Centre for Community Development Project?
a) The Share Capital
b) The Directors *
c) The Proposed name
d) Situation of registered office
84) The Companies Proceedings Rules 1992 made pursuant to the Companies and Allied Matters Act (CAMA) is applicable to:
a) Only matters arising out of part ‘A’ of CAMA *
b) Only matters arising out of part ‘B’ of CAMA
c) Only matters arising out of part ‘C’ of CAMA
d) Any matter relating to Companies in Nigeria
85) Appeals from the decision of the Investment and Securities Tribunal lies to the:
a) Court of Appeal *
b) The Supreme Court
c) National Industrial Court
d) Federal High Court
86) Which of the following statements is incorrect?
a) Striking off the name of a company by CAC under S.525 CAMA is for defunct companies
b) A company whose name was struck off may be restored within a period of 20 years upon application
c) Striking off by CAC is a regulatory power CAC exercises in respect of companies that violate the provisions of CAMA *
d) Winding up is not necessary in striking off the name of a company
87) An infant is completely prohibited from applying to CAC for the registration of a:
a) Private Company Limited by Shares
b) Sole Proprietorship as a Business Name
c) Non-Profit organization under Part C *
d) Only (b) and (c) above
At a general meeting of Kachifo Nigeria Limited held on the 30th day of May, 2015, the members of the Company passed a special resolution for voluntary winding up of the company. It also resolved that a liquidator be appointed to sell off the whole undertakings to another company for a consideration of fully paid off shares in the company. The company’s directors also made a statutory declaration of solvency.
88) Which of the following corporate restructuring is best described by the above scenario:
a) Members voluntary winding up
b) Creditors voluntary winding up
c) Arrangement on Sale *
d) Merger
89) The following is true about statutory declaration of solvency except:
a) It is made within five (5) weeks of passing the resolution for voluntary winding up of the company
b) It is made by all or majority of the directors
c) It embodies a statement of company’s assets and liabilities
d) The directors of the company are of the opinion that the company will be able to pay its debts in full within 18 months from the commencement of the winding up *
90) In winding up of a company compulsorily by the Court, the company is deemed wound up:
a) When the court makes a dissolution order on the company on the application of the liquidator
b) When the court makes a winding up order *
c) When a liquidator is appointed
d) Three months after registration by CAC of the accounts and returns of the final meeting of the company from the liquidator
Jambori Ltd have made a statutory declaration dated 1st July, 2010 that they have made a full inquiry into the affairs of the company and are of the opinion that the company will be able to pay its debts on or before 31st December, 2010.
91) The above declaration is necessary where:
a) It is proposed to wind up compulsorily
b) As a condition precedent for conversion to a public company
c) It is proposed to wind up voluntarily *
d) It is a creditors winding up
92) The above declaration made by the declaration made by the directors of the company is preceded by:
a) An ordinary resolution at a General Meeting
b) A special resolution at a General Meeting
c) An extra ordinary resolution at an extra ordinary meeting
d) An extra ordinary resolution at an Annual General Meeting
One of the following is correct
93) The company can only be dissolved after:
a) Preparation of final accounts be the liquidator
b) The general meeting has received the final account
c) The removal of the liquidator
d) Returns have been forwarded to the commission *
94) A participant in collective investment scheme is best described as
a) A shareholder
b) A stakeholder
c) Debenture holder
d) Unit Holder *
95) One of these debentures is most appropriate for a debenture holder who wishes to be a shareholder of the company
a) Bearer debenture
b) Perpetual debenture
c) Convertible debenture *
d) Registered debenture
96) In which of these companies is there no authentic right to proxy attendance at general meetings
a) Private limited liability company
b) Public limited liability company
c) Company limited by guarantee *
d) Unlimited company
In a bid to develop into a megacity, the Lagos State Government is exploring the option of raising 50 billion by issuing bond to the investing public
97) One of these bodies cannot issue government bond under the Investment and Securities Act:
a) Federal Government Agencies
b) State Government and Local Government
c) State Government Agencies
d) Public Companies where Government has shares *
98) The maximum redemption date for issued bonds is :
a) 20 years from the date of issue of the bond
b) 25 years from date of issue of the bond *
c) 50 years from date of issue of the bond
d) None of the above
99) CERPAC means
a) Combined Expartriate Registration Permit Authorized Card
b) Combined Expartriate Residence Permit and Aliens Card
c) Combined Expartriate Residence Permit and Allowance Card
d) Combined Expartiate Residence Permit and Aliens Credit
100) ABC Group Limited is required by Law to keep one of the following Financial Statements:
a) Statement of Account Policies
b) Statement of Source and Application of Funds *
c) Group Financial Statements
d) Value Added Statement
101) The Director of ABC Group Limited must lay the financial statement of the company not later than……….month(s) after incorporation:
a) 12
b) 6 *
c) 8
d) 1
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