Test 6 - Suggested Solution
Test 6 - Suggested Solution
Suggested Solution # 1
(i) d
(ii) b
(iii) b
(iv) d
(v) a
Suggested Solution # 2
Exceptions to the Requirement of Submitting a Prospectus under the Securities Act, 2015
1. Private Offering or Private Placement
Securities offered privately to a select group of investors are exempt from the prospectus
requirement.
3. Bonus Shares
Issuing bonus shares to existing shareholders as a reward for their investment is exempt from this
provision.
Suggested Solution # 3
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CAF 07: Company Law
Suggested Solution – Test # 6
Consequences of Non-Compliance
• If ML signs the Musharika finance facility agreement without meeting the specified conditions:
o Legal Voidance: The borrowing agreement will be deemed void and unenforceable.
o Potential Penalties: Regulatory authorities may impose penalties on the company and its
directors for non-compliance with the Companies Act, 2017.
Suggested Solution # 4
Under the Companies Act, 2017, a public company cannot exercise any borrowing powers or
commence business operations until it obtains a Certificate of Commencement of Business from the
Registrar.
Suggested Solution # 5
Mr. Ahmed’s statement should not be included in the prospectus because he is not an independent
expert, as he has been engaged in the formation and promotion of the company.
Page 2 of 3
CAF 07: Company Law
Suggested Solution – Test # 6
Suggested Solution # 6
Suggested Solution # 7
Conditions:
These multiple offerings must occur within a prescribed time frame and under conditions specified in
the Act or by the Commission.
(THE END)
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