5. Legal Concepts Relevant to Financial Advice

Question 1

What is the difference between Ltd companies & PLC

Answer 1

Ltd are unable to advertise shares

Question 2

What tax do companies pay

Answer 2

Corporation and capital gains

Question 3

For a contract to be binding there must be:

Answer 3

• An offer and an acceptance
• Both parties must have the power to contract

Question 4

Law of agency - Agent

Answer 4

An agency is a contract whereby one party (agent) agrees to carry out acts on behalf of another party (principle)

Question 5

A benefit of using a trust may be

Answer 5

NOT liable for IHT

Question 6

What is a trust

Answer 6

A way of gifting assets.

Legal ownership transferred to the trustee to look after for the benefit of the beneficiary

Question 7

What is a power of attorney

Answer 7

Giving someone legal authority to act on your behalf

You (donor)

Question 8

What is lasting power of attorney LPA

Answer 8

Introduced by The Mental Capacity Act 2005. Lifetime attorney for the mentally incapacitated

Question 9

A valid will must be:

Answer 9

In writing, signed and witnessed