1. Practice Questions

Question 1

In a partnership, what happens if a partner leaves without a formal agreement in place?

Answer 1

-the partnership is automatically dissolved

Question 2

What is the minimum allotted share capital required to form a PLC?

Answer 2

£50,000

Question 3

What is a key requirement for a private limited company?

Answer 3

-must end with ‘limited’

Question 4

What are the main sources of finance for a business?

Answer 4

-debt and equity

Question 5

What type of resolution requires a 75% majority vote in a company’s general meeting?

Answer 5

-special resolution

Question 6

In an LLP, what is the extent of a member’s liability?

Answer 6

-limited to their investment

Question 7

When are debentures issued?

Answer 7

-a way of securing long term loans or borrowing
-usually a flat rate of interest

Question 8

Do you need a company secretary if there is more than 1 director in a private limited company?

Answer 8

-no, it’s not required

Question 9

What is a primary difference between traditional partnerships and companies?

Answer 9

-companies pay corporation tax on profits