Business - Flashcards Full Deck
1
Q
What constitutes a partnership?
A
Persons (humans or legal entities) carrying on a business in common with the intention of making a profit, regardless of actual profit. No formalities required; evidence of agreement to share profits is a presumption of partnership.
2
Q
Is a written agreement required to form a partnership?
A
No, but a written agreement is advisable for clarity and evidence. An oral agreement is less reliable.
3
Q
Is there a requirement for partners to make financial contributions?
A
No requirement for financial contribution. The minimum number of partners is 2, and there’s no upper limit.
4
Q
What is meant by actual authority in a partnership?
A
Actual authority is the authority a partner believes they have based on communications or dealings. It can be express (granted explicitly) or implied (arising from course of dealings).
5
Q
What is apparent authority?
A
Apparent authority is when a partner’s act appears to be related to the business of the partnership and thus binds the firm, even if the partner lacks actual authority.
6
Q
Is a partnership liable for a partner’s torts?
A
Yes, if committed in the ordinary course of business or with authority from fellow partners.
7
Q
How is liability for partnership debts structured?
A
Each partner is personally liable for all debts. Incoming partners are liable for debts incurred after joining, while outgoing partners are liable for debts incurred during their tenure unless a novation agreement is made.
8
Q
What happens to property bought with partnership funds?
A
It is deemed partnership property and cannot be used for personal purposes. It is not available to satisfy individual partner’s personal debts.
9
Q
How are profits and losses shared in a partnership?
A
Profits and losses are shared equally unless otherwise agreed. The right to share profits is assignable, but the assignee cannot manage or demand profit shares.
10
Q
How are management decisions made in a partnership?
A
Each partner has equal management rights unless agreed otherwise. Most decisions require a simple majority, while changes like admitting new partners or changing business nature require a unanimous vote.
11
Q
What are some key duties of partners?
A
(i) Render true accounts and full information, (ii) Account for profits from the partnership’s property or name, (iii) Refrain from competing with the partnership, (iv) Fiduciary duty to act in good faith for the partnership’s benefit.
12
Q
What happens to a partnership upon dissolution?
A
The business continues only to wind up existing affairs. New business cannot be undertaken. Debts are settled, and remaining funds are distributed among partners based on their capital contributions.
13
Q
How are partners taxed?
A
Each partner is liable for income tax on their share of profits, even if the profits are not distributed.
14
Q
What is the default rule for participation in the management of a partnership?
A
All partners have an equal right to participate in management unless the partnership agreement specifies otherwise.
15
Q
Do partners have a right to remuneration for their services to the partnership?
A
No, partners have no right to remuneration unless there is an agreement to the contrary.
16
Q
How are profits and losses shared among partners if the partnership agreement does not specify otherwise?
A
Partners share profits and losses equally if the agreement is silent on this matter.
17
Q
What is the right of a partner regarding indemnification?
A
A partner has the right to be indemnified by fellow partners for expenses incurred on behalf of the partnership.
18
Q
What can the other partners do if a partner wilfully or persistently breaches the Partnership Agreement?
A
The other partners may apply to a court for dissolution.
19
Q
What are the characteristics of an LLP?
A
An LLP consists of two or more persons carrying on a business with a view to profit, with incorporation documents filed at Companies House. It is a separate legal entity and liable for its own debts. Members cannot be pursued for the LLP’s debts.
20
Q
What documents are required for LLP incorporation?
A
The incorporation documents must include the LLP’s name, country and address of the registered office, names and addresses of each member, identities of designated members, and details of people with significant control.
21
Q
How many designated members must an LLP have?
A
At least 2 must be designated members.
22
Q
What happens if an LLP has only one member for more than 6 months?
A
The sole member will become personally liable for the debts of the LLP.
23
Q
What are the rights of LLP members?
A
Members have the right to share profits equally (unless agreed otherwise), indemnification, inspect books and records at any time, and manage the LLP.
24
Q
What are the duties of LLP members?
A
Members must refrain from competing with the LLP, profiting from the use of the LLP’s name or property, and must account to the LLP for any profits.
25
What is the liability of members for LLP debts and wrongful acts?
Members are not liable for LLP debts or wrongful acts of the LLP or omissions of fellow members beyond their capital contribution but are subject to rules for wrongful and fraudulent trading.
26
How is an LLP terminated?
An LLP continues despite a member's death, must be removed from the Companies House register, and will be struck off following insolvency. Members can apply for strike off with a majority vote. Notice must be given to other members and creditors. The LLP is dissolved by the registrar 3 months after notice.
27
How are LLPs taxed?
LLPs are not taxable entities; individual partners are charged income tax on their share of the profits.
28
What is a limited company (by shares)?
A company where the liability of its members is limited to the amount of their shares. It is a separate legal entity from its members, incorporated at Companies House (CH), and members are not personally liable for the company's debts beyond their shareholding.
29
What is a shelf company?
A pre-incorporated company that has not traded and is available for immediate purchase by clients who wish to start business quickly. It is registered at CH and can be used as-is or with modifications.
30
What are the key formation requirements for a limited company?
1. Memorandum of Association
31
What are the key formation requirements for a limited company?
2. Application for Registration (includes name, location, business details, share capital, initial shareholding, directors, officers, and PSCs)
32
What are the key formation requirements for a limited company?
3. Statement of Compliance with Companies Act 2006.
33
What are the company name requirements for private and public companies?
- Private Company: Must include "Limited" or "Ltd" in its name.
34
What are the company name requirements for private and public companies?
- Public Company: Must include "Public Limited" or "PLC" in its name.
35
What are the company name requirements for private and public companies?
- Name cannot be the same as an existing company name. Some names require approval (e.g., "dentist" requires GDC approval).
36
What does the Certificate of Incorporation include?
Issued by Companies House (CH) upon registration, it includes a unique company number that never changes.
37
What is the purpose of the Articles of Association?
They are the contract between the company and its members. They can be based on the Model Articles or customized as Special Articles, which must be filed with CH and are public. Alterations require special resolution (75% approval) or greater for entrenched provisions.
38
What is a Shareholders’ Agreement?
A private document not filed with CH that includes provisions not covered by the Articles of Association.
39
What is the extent of a shareholder's liability in a limited company?
Shareholders are not liable for the company’s debts beyond the unpaid amounts for their shares. This is known as the 'corporate veil'.
40
How many directors must a private company have on incorporation, and what about a public company?
A private company must have at least 1 director, and a public company must have at least 2 directors.
41
How should a new director be appointed after incorporation?
Directors are appointed according to the company’s articles of association. The new director must consent to the appointment.
42
What must happen if there are any changes in directors (appointment, removal, or change in details)?
Changes must be notified to Companies House within 14 days.
43
What is the difference between a de jure director and a de facto director?
A de jure director is formally appointed, while a de facto director is not formally appointed but still carries out duties.
44
What is a shadow director?
A shadow director stands behind the board of directors and effectively controls them.
45
What is the role of an executive director compared to a non-executive director (NED)?
An executive director is employed by the company, whereas a NED operates as a consultant.
46
What are the powers of directors in a company?
Directors can make all decisions of the company unless reserved for shareholders, make decisions at board meetings, and enter into contracts on behalf of the company.
47
What are directors' duties towards the company?
Directors must act in good faith, exercise reasonable care and skill, use independent judgment, avoid conflicts of interest, act within their powers, declare interests in transactions, and not accept benefits from third parties.
48
How can a board meeting be called and what is the quorum requirement?
Any director can call a board meeting with reasonable notice (not necessarily in writing). The quorum requirement is 2 directors.
49
What is required to pass a written resolution by directors?
Unanimous approval is required to pass a written resolution.
50
What is the procedure for removing a director?
Shareholders can remove directors by a simple majority vote. Notice of the resolution to remove a director must be given at least 28 days before the meeting, and the director must be given notice and a right to respond.
51
What are the responsibilities of a company secretary?
The company secretary maintains the company’s internal records and arranges filings at Companies House. Public companies must have one, but private companies do not.
52
Do all companies need to prepare accounts?
Yes, all companies must prepare accounts. Large companies (with an annual turnover greater than £10m and more than 50 employees) must hire an auditor.
53
What happens to a director's duty to the company in the case of insolvency?
The duty to the company is displaced by the duty to creditors when the company is insolvent or on the brink of insolvency.
54
What is the duty to act within powers?
Directors must use their powers for proper purposes and act within the powers conferred by the company’s memorandum and articles.
55
What does the duty to promote the success of the company entail?
Directors must promote the success of the company for the benefit of its members as a whole, considering long-term consequences, community/environmental impact, employee interests, and fairness among members.
56
What is the test for whether the duty to promote the success of the company has been breached?
The test is subjective; no breach if the director honestly believes their decision would promote the company’s success. Directors must record considerations in the minutes of meetings.
57
What does the duty to exercise independent judgment require?
Directors must make decisions independently and not contract out their decision-making. It’s not breached if following professional advice or entering into a contract requiring future actions, as long as it’s done in good faith.
58
How is the duty to exercise reasonable care, skill, and diligence measured?
(i) For directors with no special skills: objective test of a reasonable director. (ii) For directors with special skills: objective test of a reasonable director with the same skill, knowledge, or experience.
59
What must directors do to avoid conflicts of interest?
Avoid situations where there is a direct or indirect interest that could benefit themselves, a close relative, or another business they have a significant interest in.
60
What is the duty regarding benefits from third parties?
Directors should comply with the company's policy on the Bribery Act 2010 and declare any gifts received to other directors.
61
What is required when declaring an interest in a proposed or existing transaction with the company?
Directors must declare the nature and extent of their interest in writing or at a board meeting before the transaction is entered into. The declaration only needs to be made once, e.g., upon joining.
62
What are the remedies for a breach of duty by a director?
Remedies include an account of profits, return of company property, payment of compensation, rescission of a contract, and an injunction to prevent further breach.
63
How can shareholders address a breach of duty by a director?
Shareholders can vote to approve the breach (unless they are the director in breach) or bring a derivative action on behalf of the company.
64
What is involved in the removal of a director?
Shareholders can remove a director through a majority vote (not by written resolution). If removal violates the director’s service contract, the company may need to pay damages.
65
What is director disqualification, and when can it occur?
Disqualification prevents a director from being involved in management or being a director of any company for a specified period. It usually follows an investigation after insolvency but can also occur for other misconduct or unfitness.
66
How does a person become a member of a company?
A person becomes a member when their name is added to the Register of Members, and the company issues a share certificate to the member.
67
What must be kept up to date and is an internal register?
The Register of Members must be kept up to date and is an internal register.
68
What is a PSC (Person with Significant Control)?
A PSC holds more than 25% of shares or voting rights, or has control over the appointment of the board of directors. PSCs must be added to the PSC Register.
69
What is the procedure for declaring dividends?
Directors recommend the dividend in a resolution, shareholders vote to approve it, and they can decrease the amount recommended. Directors can be liable if they approve an amount larger than available profits.
70
What are ordinary shares?
Ordinary shares provide equal rights to voting, dividends, and on dissolution of the company.
71
What are preference shares?
Preference shares have superior rights compared to ordinary shares, including dividend preferences. They can be cumulative or non-cumulative.
72
What is the difference between cumulative and non-cumulative dividends?
Cumulative dividends roll over to the next year if not paid, while non-cumulative dividends disappear if not paid out in that year.
73
How does voting power correlate with the number of shares?
The more shares a member holds, the more voting power they have.
74
What is a Derivative Action?
A Derivative Action is when a shareholder brings a claim if a director breaches their duty and the board won’t act. It must show a prima facie case and promote the company’s best interests.
75
What must be shown for a Derivative Action claim to proceed?
The claim must show a prima facie case (not frivolous or vexatious) and must promote the company's best interests.
76
What remedy is usually available for unfair prejudice?
The usual remedy is to force the majority shareholders to buy the minority shareholders' shares at fair value or to negotiate with the directors and majority shareholders.
77
When can a shareholder apply to court for winding-up?
A shareholder can apply to court for winding-up if the company is solvent and it is just and equitable to do so, such as in a management deadlock.
78
How long must a company keep a director’s service contract?
A company must keep the director’s service contract at the registered office for at least one year after the director leaves.
79
What rights does a shareholder have regarding the Register of Members?
Shareholders have the right to inspect the Register of Members, which must be kept at the registered office. The shareholder must have a proper purpose for the request, and the company must comply within 5 working days.
80
Who can call a general meeting?
Directors call general meetings. Shareholders owning at least 5% of the company’s paid-in voting capital have the right to require directors to call a meeting.
81
How many days' notice is required to remove a director?
28 clear days’ notice is needed to remove a director.
82
What must a notice of a general meeting contain?
The notice must include the company name, date, time, place, general nature of business, text of any special resolutions, and proxy statement. Notices can be given in written or electronic form, but not orally.
83
What is the minimum notice period for a general meeting?
A general meeting must be called with at least 14 clear days' notice, excluding the day the notice is sent and the day of the meeting itself.
84
What is "short notice" for a general meeting?
A meeting may be held on shorter notice if agreed by a majority in number of shareholders holding 90% of the shares.
85
What is the typical quorum for a general meeting?
The typical quorum is 2 members, unless the articles provide otherwise.
86
Can a member vote to ratify their own breach of duty?
No, a member cannot vote to ratify their own breach.
87
How is an ordinary resolution passed?
An ordinary resolution is passed if more than 50% of the votes are in favor. Examples include appointment/removal of a director or auditor, declaration of dividends, and allotment of shares.
88
How is a special resolution passed?
A special resolution is passed if 75% or more of the votes are in favor. It is required for amending the company name, amending articles, winding up the company, removing pre-emption rights, and buying back company shares.
89
What is the time frame for filing a special resolution with Companies House?
The special resolution must be filed at Companies House within 15 days of approval.
90
What are the methods of voting at a general meeting?
Voting can be by show of hands (one vote per shareholder) or by poll vote. A poll vote can be demanded by 5 or more shareholders, or shareholders holding at least 10% of voting rights or paid-up capital.
91
What is a written resolution, and when is it used?
A written resolution may be used to pass ordinary or special resolutions but cannot be used to dismiss a director or auditor. It is an alternative to passing a resolution at a general meeting. The resolution must contain instructions for voting and has a typical return time limit of 28 days.
92
How is a written resolution passed?
A written resolution is passed as soon as enough votes are returned in favor (more than 50% for ordinary resolutions and at least 75% for special resolutions). If not passed within 28 days, it fails.
93
What registers must be kept available for inspection by members?
The registers that must be kept available are the register of members, register of directors, register of secretaries, and register of persons with significant control (PSCs).
94
How long must minutes from general meetings be kept for inspection?
Minutes from all general meetings must be kept and available for inspection by shareholders for at least 10 years.
95
How long must copies of directors' service contracts be kept?
Copies of directors' service contracts must be kept available for at least 1 year after the director leaves.
96
What is required for annual confirmation and accounts submission?
The company is required to submit an annual confirmation statement to Companies House confirming that the information is up to date. Private companies must also send copies of accounts to Companies House no later than 9 months after the end of the relevant accounting period.
97
What is equity in the context of a company?
Equity refers to ownership interests and raising capital by selling shares.
98
What happens once a company is formed in terms of share allotment?
Directors agree to allot shares to subscribers and receive payment for them. The nominal or par value becomes the company's share capital, which cannot be returned to shareholders (SHs).
99
Can directors allot additional shares?
Yes, if the company has one class of shares and no restrictions in the articles (e.g., MA), directors can allot additional shares. In other situations, permission from SHs by Ordinary Resolution (OR) is required.
100
What is the general procedure for allotting shares?
Directors determine the price and number of shares and resolve to allot them. Shares are usually issued for cash, but directors may accept property in exchange. The full value of shares must be paid upon allotment.
101
What happens when shares have a nominal or par value?
The nominal or par value is added to the share capital account.
102
What is a share premium account?
Any amount received beyond the nominal or par value is recorded in a share premium account.
103
What is the pre-emption right?
It is the right of existing SHs to be offered additional shares on the same terms as offered in the open market before new shares are sold publicly. SHs have 14 days to accept. Pre-emption rights do not apply to non-cash considerations (e.g., property) and may be disapplied by Special Resolution.
104
How are share transfer rights governed?
Share transfer rights are governed by the articles of association. Directors have absolute power to refuse or allow a transfer unless limited by special articles. Finance from the transfer goes to the transferor, not the company.
105
What is debt in terms of company capital raising?
Debt refers to borrowing money to raise capital.
106
Who has the power to borrow money for the company?
Directors have the power to decide how much money to borrow on behalf of the company, according to the Model Articles (MA).
107
What is an unsecured loan?
An unsecured loan is a loan based solely on a promise to repay, without any collateral. It is usually more expensive as it is riskier for the lender.
108
What is a secured loan?
A secured loan is a loan with a promise to repay, along with collateral. The lender can claim the collateral if the loan is not repaid.
109
What is a mortgage in the context of secured loans?
A mortgage is a secured loan taken over land or property.
110
What is a fixed charge?
A fixed charge is a loan secured by an asset that the company will hold long-term (e.g., machinery). The company cannot dispose of the asset without the lender’s consent.
111
What is a floating charge?
A floating charge is a loan secured by a group or class of assets that changes regularly (e.g., inventory or stock). The charge crystallizes in the assets on hand if the company defaults.
112
What happens if charges or mortgages against company assets aren’t registered within 21 days?
If not registered within 21 days at Companies House, the charges or mortgages are void against other creditors if the company becomes insolvent.
113
How does the priority of charges work?
Fixed charges rank above floating charges. Both rank in order of creation, as long as they are registered within the 21-day time limit.
114
What taxes do companies pay, and when do SHs incur taxable income?
Companies pay 25% corporation tax on profits. SHs don’t have taxable income from company profits until the company distributes profits to SHs via dividends.
115
What is insolvency?
Insolvency occurs when a person or business is unable to pay their debts.
116
What are the options for individuals facing insolvency?
Individuals can negotiate with creditors, enter into an Individual Voluntary Arrangement (IVA), or declare bankruptcy.
117
What are the options for companies or LLPs facing insolvency?
Companies or LLPs can enter receivership, implement a restructuring plan, undergo administration, enter into a Company Voluntary Arrangement (CVA), seek a moratorium, or proceed with liquidation.
118
What is a key negotiation strategy with creditors to help a business survive?
Negotiate for more time to pay or reduction in debt, though promises may be unenforceable without consideration.
119
What is an Individual Voluntary Agreement (IVA)?
A binding agreement where creditors accept reduced payments or different terms. Requires an insolvency practitioner.
120
Who must draft the IVA proposal and what is their role?
An insolvency practitioner (IP) drafts the IVA proposal, applies for an interim court order, and supervises the IVA.
121
What percentage of creditors must approve an IVA for it to be binding?
Approval requires either half of the creditors by number or creditors owed at least 75% of the unsecured debt.
122
What happens if a debtor fails to comply with the IVA?
The supervisor or any creditor can petition for the debtor’s bankruptcy.
123
What is bankruptcy?
A judicial process where a trustee in bankruptcy (TIB) liquidates the debtor’s assets to pay off debts in a statutory order.
124
How can a bankruptcy order be obtained?
(i) Debtor applies online; (ii) Unsecured creditor(s) owed at least £5K petitions; (iii) Supervisor of IVA petitions.
125
What must creditors do once a bankruptcy application is made?
Creditors must stop chasing the debtor.
126
What is the role of the official receiver in bankruptcy?
Acts as the trustee in bankruptcy (TIB) and manages the liquidation of the debtor’s estate.
127
What can a bankrupt keep during proceedings?
Items needed for daily living, job tools, and salary.
128
What must a bankrupt not do during bankruptcy proceedings?
Apply for credit above a certain amount, act as a company director, be a partner, or trade under a different name without disclosure.
129
How long does bankruptcy last?
Bankruptcy is automatically discharged after one year.
130
In what order are creditors paid in bankruptcy?
1. Costs of bankruptcy; 2. Preferential debts (employees); 3. Ordinary unsecured creditors; 4. Postponed creditors.
131
What are the consequences of bankruptcy caused by dishonesty or negligence?
The bankrupt can face a court order extending bankruptcy for up to 15 years.
132
What happens to a partnership when a partner goes bankrupt?
If at will, it dissolves; if for a term, the remaining partners may purchase the bankrupt partner's interest.
133
What happens if a bankrupt is a member of an LLP?
They can’t manage the LLP; if the LLP is insolvent, it is wound up like a company.
134
How have directors' duties changed in insolvency?
Directors must now act for the benefit of creditors, displacing their duty to the company.
135
Is negotiation with creditors usually enforceable?
Negotiation may be unenforceable due to lack of consideration.
136
What is receivership?
A process where a creditor with a fixed charge appoints a receiver to sell assets and pay off obligations. Receiver’s duties are to the secured creditor only.
137
Does receivership usually lead to insolvency?
Yes, it often leads to insolvency as the business usually collapses without its key assets.
138
What is a restructuring plan?
A court-sanctioned plan allowing a company to restructure its debts if approved by creditors owed at least 75% of the unsecured debt.
139
What is administration?
A procedure where an administrator runs, reorganizes, or sells the company. The court must believe it will benefit creditors more than liquidation.
140
How can a company enter administration?
Through a formal court hearing or by filing papers with the court (in-court or out-of-court route).
141
What is a Company Voluntary Agreement (CVA)?
Similar to an IVA but for companies. Directors propose a CVA and appoint an IP. Requires 75% or more of unsecured creditors to agree for implementation.
142
What is a moratorium in insolvency?
A court order halting most creditor actions, giving the company breathing space. Directors remain in charge while an insolvency practitioner (monitor) oversees.
143
What is liquidation/winding-up?
The process of selling a company’s assets to pay off debts. The company ceases to exist after liquidation.
144
What is Voluntary Liquidation?
Liquidation initiated by the members or directors of a company.
145
What is Members Voluntary Liquidation (MVL)?
A type of voluntary liquidation for solvent companies where members and directors control the process. A resolution must be passed by shareholders within 5 weeks.
146
What is Creditors Voluntary Liquidation (CVL)?
Initiated by directors when the company is insolvent. The process is then taken over by creditors. Directors resolve insolvency and pass a special resolution to start liquidation.
147
What is Compulsory Liquidation?
Initiated by a creditor petitioning the court when a company is unable to pay its debts. The court schedules a hearing and appoints a liquidator to sell assets and pay debts.
148
In what order are creditors paid in liquidation?
1. Expenses of winding up; 2. Secured creditors (from proceeds of secured assets); 3. Preferential creditors (e.g., employees, HMRC); 4. Floating charge creditors; 5. Unsecured creditors; 6. Shareholders.
149
What happens if a fixed charge holder is paid more than their debt?
Any surplus from the sale of the asset is available for other creditors.
150
What is a preference in insolvency?
An action by the debtor that intentionally favors one creditor over others, such as paying off a specific creditor or granting security. The Trustee in Bankruptcy can clawback preferences made within 6 months, or 2 years if to a connected person.
151
What is a transaction at undervalue (TAU)?
A transaction where property is given away or sold for significantly less than market value. Can be set aside if done within 2 years of insolvency and the company was or became insolvent due to it. Transactions with connected persons are presumed to be undervalued.
152
What is the defense for a transaction at undervalue?
The transaction was made in good faith for business purposes and there were reasonable grounds to believe it would benefit the company. Grant of a security interest is not considered a TAU.
153
What is fraudulent trading?
When a director carries on business with the intent to defraud creditors, such as putting assets out of reach. Directors may be ordered to contribute to the company’s assets and it is also a criminal offence. Requires proof of dishonesty.
154
What is wrongful trading?
When directors continue business knowing or should have known the company has no reasonable prospect of avoiding insolvency and fail to minimize losses. Directors may be ordered to contribute to the company’s assets. Key steps include taking professional advice and managing debts.
155
What are floating charges and their restrictions?
Floating charges created within 12 months of insolvency for no fresh consideration are automatically void. With new consideration, the charge covers only the fresh amount. If to a connected person, the look-back period is 2 years, with no need to show insolvency at creation.
156
How is a company deemed unable to pay its debts?
1. Statutory demand over £750 not paid within 21 days; 2. Judgment obtained but not fully satisfied; 3. Unable to pay debts as they fall due (cash flow test); 4. Liabilities exceed assets (balance sheet test). Creditors typically use the first two tests.
157
What is money laundering?
The process of making money obtained from criminal activities (e.g., drug trafficking, terrorist funding) appear legitimate.
158
What is the Proceeds of Crime Act 2002?
Legislation outlining offences related to money laundering. Enforcement is managed by the National Crime Agency.
159
What is the Money Laundering Regulation 2017?
Regulations requiring certain businesses to follow procedures to help combat money laundering.
160
What are the three stages of money laundering?
1. Placement: Introducing dirty money into the financial system.
161
What are the three stages of money laundering?
2. Layering: Concealing the source through transactions and book-keeping.
162
What are the three stages of money laundering?
3. Integration: Withdrawing the laundered money from the account.
163
What constitutes an indirect offence under the AML framework?
Failure to fulfil AML obligations, such as not reporting suspicions of money laundering.
164
What is concealing under money laundering offences?
Concealing, disguising, converting, or transferring criminal property from the UK with knowledge or suspicion of its criminal origin. Defence: Authorized disclosure before the concealment occurred.
165
What is arrangement under money laundering offences?
Assisting someone to retain the proceeds of crime, knowing or suspecting it is criminal. Exception: Ordinary litigation. Defence: Authorized disclosure.
166
What is acquisition, use, or possession of criminal property under money laundering offences?
Using, acquiring, or possessing criminal property with knowledge or suspicion of its criminal origin. Defences: Authorized disclosure, adequate consideration.
167
What is the FSMA General Prohibition?
Prohibits carrying out regulated activities unless authorized or exempt. Regulated activities include advising, arranging, dealing as an agent, managing, and safeguarding in relation to specified investments.
168
What are examples of regulated activities under FSMA?
Advising on, arranging, dealing as an agent, managing, or safeguarding specified investments such as insurance contracts, company shares, debentures/bonds, mortgage contracts, pension schemes, and funeral plans.
169
What are specified investments under FSMA?
Insurance contracts, company shares, debentures/bonds, mortgage contracts, pension schemes, and funeral plans.
