LAW346 Final Assessment Answer Scheme
MARCH - AUGUST 2022
PART A
QUESTION 1
a) Qualifications required to become an auditor (10 marks)
Introduction (1 mark)
Law (8 marks)
● Explanations
● Section 263(1) of the Companies Act 2016
● Section 263(2) of the Companies Act 2016
● Section 263(7) of the Companies Act 2016
● Section 14(3) of the Accountant Act 1967
● Section 264(5) of the Companies Act 2016
Conclusion (1 mark)
b) The protections provided by the Companies Act 2016 to the holders of class rights who
are affected by the variation of class rights. (10 marks)
Introduction (1 mark)
Law (8 marks)
● Cancellation of variation
o Explanation
o Section 93
o Section 93(1)
● Remedies in cases of oppression
o Section 96(2)
Conclusion (1 mark)
c) Four (4) exceptions to the prohibition against a company from giving financial
assistance to purchase its own shares. (10 marks)
Introduction (1 mark)
Law (8 marks)
● Explain 4 exception only.
o Foreign company
o Ordinary course of business
o Trust scheme for employees
o Employees
o Bank, insurance or takaful
o Non-public listed company
Conclusion (1 mark)
QUESTION 2
1 mark for each question.
1. D
2. C
3. B
4. D
5. D
6. B
7. C
8. C
9. B
10. D
(Total marks for Part A: 40 marks)
PART B
QUESTION 1
Issue: (1 marks)
1. Whether Borhan had breached his duty as a promoter by making secret profit?
Law (11 marks)
● Definition of promoter – section 2(1) of the Companies Act 2016.
● Listing the fiduciary duties of a promoter.
● Explain duty of a promoter not to make secret profit.
● Erlanger v New Sombrero Phosphate Co.
● Whaley Bridge Calico Printing Co. v Green and Smith
● Listing the remedies for breach of promoter’s duties
● Explain remedies of right to recover the secret profit
Application (7 marks)
Conclusion (1 mark)
(Total: 20 marks)
QUESTION 2
Issue: (1 mark)
1. Whether Rama has breached his duty as a director by making secret profit?
2. Whether Muthu has breached his duty as a director by competing with the company?
Law (11 marks)
● Definition of director – section 2(1) of the Companies Act 2016.
● Duty not to misuse his position as director
o S.218(1)(c)
o Cook v Deeks
o Mahesan v Malaysian Government Officer Co-Operative Housing Society
o Fur Ltd v Tomkies
● Duty not to compete with the company
o S.218(e)
o A director may not obtain any business opportunity or advantage from one
company and use it for himself or another competing company.
o Avel Consultants Sdn Bhd v Mohammed Zain Yusof
Application (7 marks)
Conclusion (1 mark)
(Total: 20 Marks)
QUESTION 3
Issue: (1 marks)
Priority of charges
Law (11 marks)
● First in creation prevails
o Re Automatic Bottle Makers
● Registered charge prevails
o United Malayan Banking Corporation Bhd v. Aluminex (M) Sdn Bhd
● Fixed charge has higher priority than floating charge
● Preferential creditors
o Kenneth Teh Ah Kim & Anor
● Unsecured creditor
● Judgment debt
Application (7 marks)
Conclusion (1 mark)
(Total: 20
marks) (Total marks for
Part B: 60 marks)