Free Practice Questions for KASNEB CS21

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Key Facts: KASNEB CS21 Exam

CS21

Intermediate Company Law Paper

KASNEB Qualifications Booklet

50%

Minimum Pass Mark Per Paper

KASNEB Examination Regulations

Kshs 2,400

Intermediate Paper Examination Fee

KASNEB Qualifications Booklet 2026

3 hours

Official Paper Duration

KASNEB April 2026 Format Notice

5 questions

Compulsory Questions Per Paper (from April 2026)

KASNEB April 2026 Format Notice

2015

Companies Act in Force

Kenya Law — Companies Act, 2015

KASNEB CS21 Company Law is the Intermediate paper on Kenyan corporate law under the Companies Act, 2015. Candidates need 50% to pass, sit a three-hour paper of five compulsory questions (from April 2026), and pay Kshs 2,400 per paper plus standard KASNEB registration fees.

Sample KASNEB CS21 Practice Questions

Try these sample questions to review concepts for the KASNEB CS21 exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 118+ question experience with AI tutoring.

1Under the Companies Act, 2015, which characteristic distinguishes a company from a sole proprietorship?

A.Separate legal personality distinct from its members

B.Unlimited liability of the owner for business debts

C.No requirement to register with any authority

D.Profits taxed only in the hands of the proprietor

Explanation: A company is a body corporate with perpetual succession and separate legal personality under the Companies Act, 2015. It can own property, sue, and be sued in its own name, unlike a sole proprietorship where the business and owner are legally the same person.

2A private company under the Companies Act, 2015 is identified by which features in its articles?

A.Restrictions on share transfers, a member limit of fifty, and no public share offers

B.A minimum of seven subscribers at incorporation

C.An obligation to list on the Nairobi Securities Exchange

D.Unlimited liability of all members

Explanation: Section 9 of the Companies Act, 2015 defines a private company by articles that restrict transfer of shares, limit members to fifty (excluding certain employee-members), prohibit public invitations to subscribe, and require consent to add new members.

3What is the doctrine of 'lifting the corporate veil' under Kenyan company law?

A.Courts may disregard separate personality where the company is used to perpetrate fraud or evade legal obligations

B.Members automatically lose limited liability when a company makes losses

C.The veil is lifted whenever a company has only one member

D.Directors are never personally liable for company acts

Explanation: While a company has separate legal personality, Kenyan courts may pierce or lift the corporate veil in exceptional cases—such as fraud, sham companies, or evasion of existing legal duties—so that those behind the company bear responsibility.

4Which type of company does NOT have a share capital under the Companies Act, 2015?

A.A company limited by guarantee

B.A private company limited by shares

C.A public company limited by shares

D.An unlimited company with share capital

Explanation: A company limited by guarantee has members who undertake to contribute a stated amount on winding up rather than holding shares. Companies limited by shares and unlimited companies with share capital both have share capital structures.

5Perpetual succession of a company means that:

A.The company's existence continues irrespective of changes in membership or death of members

B.The company must dissolve after twenty years of operation

C.Members' shares automatically expire when a member dies

D.The company cannot change its registered name

Explanation: Perpetual succession means the company continues as a legal entity despite changes in ownership, death of members, or transfer of shares, until formally wound up or struck off.

6How does a cooperative society differ from a company under Kenyan law?

A.A cooperative is primarily member-owned for mutual benefit under cooperative law, not incorporated under the Companies Act

B.A cooperative always has unlimited liability for all members

C.A cooperative cannot engage in commercial trade

D.A cooperative is automatically a public company

Explanation: Cooperative societies are governed by the Co-operative Societies Act and operate on democratic member control and mutual benefit principles. Companies are incorporated under the Companies Act, 2015 with a corporate structure oriented to business enterprise.

7An unlimited company under the Companies Act, 2015 is one where:

A.Members have no limit on their liability to contribute to the company's debts if it is wound up

B.The company has no obligation to keep accounting records

C.Members cannot be sued by creditors during the company's life

D.The company may not have share capital

Explanation: In an unlimited company, members accept unlimited liability for the company's debts on winding up. Such companies may still have share capital and must comply with other Companies Act requirements.

8Who is a 'promoter' in the context of company formation?

A.A person who undertakes the work of forming a company and may profit from the venture

B.The Registrar of Companies who issues the certificate of incorporation

C.Any shareholder who purchases shares after listing

D.The company's external auditor appointed at first AGM

Explanation: A promoter is a person who takes the initiative in forming a company—arranging subscribers, preparing documents, and negotiating pre-incorporation arrangements. Promoters owe fiduciary duties and must disclose secret profits.

9A pre-incorporation contract entered into by promoters on behalf of a company not yet formed is:

A.Generally binding on the promoters personally unless ratified after incorporation

B.Automatically binding on the company from the date of signing

C.Void and of no legal effect under any circumstances

D.Binding only if approved by the High Court before incorporation

Explanation: Before incorporation, the company does not exist as a legal person and cannot be bound. Promoters remain personally liable on pre-incorporation contracts unless the company, once formed, ratifies the contract and the other party agrees to novation.

10Which document must be lodged with the Registrar to register a company under the Companies Act, 2015?

A.Application for registration together with the memorandum and articles of association

B.A certified copy of the company's first audited financial statements

C.The minutes of the first annual general meeting

D.A bond securing all anticipated company debts

Explanation: Registration requires lodging an application with prescribed particulars, the memorandum of association, and (except where model articles are adopted under section 21) the articles of association, together with statements of capital/guarantee and proposed officers, under Part II, Division 2 (Formation and Registration of Companies), sections 11-19 of the Companies Act, 2015.

About the KASNEB CS21 Exam

CS21 Company Law is an Intermediate Level paper in the KASNEB Certified Secretaries (CS) qualification. It tests application of the Companies Act, 2015 and related statutes governing incorporation, membership, share and debt capital, meetings, directors, the company secretary, auditors, accounts, investigations, corporate restructuring, insolvency, and foreign companies. From April 2026, the live paper comprises five compulsory questions in a three-hour session. This free practice bank reformats the same syllabus into 100 multiple-choice items for efficient revision.

Exam sponsor: Kenya Accountants and Secretaries National Examinations Board (KASNEB). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Questions

100 questions

Time Limit

3 hours per official paper (five compulsory questions from April 2026)

Passing Score

50% per paper

Exam / Certification Fees

Kshs 2,400 per Intermediate paper (plus Kshs 7,500 registration and Kshs 2,000 annual renewal for new students)

Exam sponsor website

Reported exam pass rate: Not published. KASNEB does not publish a single first-time pass-rate percentage for CS21 Company Law. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Official sources

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

~7%

Nature & Classification

Legal personality, company types, veil of incorporation, and business associations

~9%

Formation

Promoters, registration, names, memorandum and articles, incorporation effects

~6%

Membership

~7%

Classes of shares, transfer, certificates, premium, and class rights

~7%

Share Capital

Nominal value, buy-backs, bonus issues, reduction, and financial assistance

~6%

Debt Capital

Debentures, fixed and floating charges, registration, and crystallisation

~10%

Meetings

AGM, EGM, notice, quorum, resolutions, proxies, and minutes

~10%

Directors

Appointment, duties, conflicts, removal, liability, and shadow directors

~5%

Company Secretary

Qualifications, duties, appointment, and liability

~5%

Auditors

Appointment, removal, rights, resignation, and qualifications

~5%

Accounts

Accounting records, financial statements, directors' report, and dividends

~3%

Audit & Investigation

Auditor's report, fraud reporting, and statutory inspectors

~5%

Restructuring

Schemes of arrangement, mergers, compromises, and court sanction

~8%

Insolvency

Administration, voluntary and compulsory liquidation, priority, and dissolution

~4%

Foreign Companies

Registration, service of process, accounts, and cessation in Kenya

Preparing for the KASNEB CS21 Exam

What You Need to Know

Passing score: 50% per paper
Exam length: 100 questions
Time limit: 3 hours per official paper (five compulsory questions from April 2026)
Exam / certification fees: Kshs 2,400 per Intermediate paper (plus Kshs 7,500 registration and Kshs 2,000 annual renewal for new students) Official sources

Using Our Practice Resources

Work through all 118 available questions
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KASNEB CS21: Suggested Study Strategy

1Read the Companies Act, 2015 Part by Part — formation (Part III), shares (Parts X–XIV), meetings (Part VI), directors (Part VII), and winding up alongside the Insolvency Act, 2015.

2Memorise thresholds that frequently appear: private company fifty-member limit, special resolution seventy-five per cent, default quorum of two qualifying persons, and twenty-one days' notice for private company general meetings.

3Distinguish fixed charges from floating charges and know when registration with the Registrar is required.

4Practise drafting-style topics mentally: promoter duties, pre-incorporation contracts, and single-member company record-keeping.

5Link CS21 to CS23 Meetings and CS25 Corporate Governance — those papers build directly on company law foundations.

6Use KASNEB past papers for essay practice alongside this MCQ bank for concept drilling.

7Book examinations early through online.kasneb.or.ke and confirm your annual registration is active before the deadline.

Frequently Asked Questions

What is KASNEB CS21 Company Law?

CS21 is the Intermediate Level Company Law paper in the KASNEB Certified Secretaries (CS) programme. It examines the Companies Act, 2015 and related law on how Kenyan companies are formed, governed, financed, and wound up.

Who administers the CS21 examination?

The examination is set and administered by the Kenya Accountants and Secretaries National Examinations Board (KASNEB) at designated centres in April, August, and December each year.

What is the pass mark for CS21?

Candidates must score at least 50% in CS21 to pass. A referred candidate re-sits only the failed paper at a later sitting.

How much does the CS21 examination cost?

The Intermediate Level examination booking fee is Kshs 2,400 per paper. New students also pay a one-time registration fee of Kshs 7,500 and an annual renewal fee of Kshs 2,000.

What is the official CS21 exam format from 2026?

From the April 2026 sitting, each KASNEB professional paper consists of five compulsory questions answered in a three-hour session. Marks per question are shown on the paper.

Which statute is primary for CS21?

The Companies Act, 2015 is the principal statute. Candidates should also know the Insolvency Act, 2015 for administration, receivership, and liquidation topics.

When can I sit CS21?

You must be registered as a KASNEB CS student with valid annual renewal and have completed or received credit for the Foundation Level before sitting Intermediate papers such as CS21.

Are these practice questions multiple-choice?

Yes. The official CS21 paper uses written compulsory questions, but this free bank provides 100 multiple-choice items with explanations so you can revise and self-test quickly.