Business Law and Practice

Question 1

characteristics of a public company

Answer 1

• separate corporate personality
• limited liability
• owned by shareholders
• managed by a board
• must have a secretary
• minimum 50,000 alloted share captial
  *

Question 2

considerations when forming a business

Answer 2

• liability
• tax
• formalities
• publicity
• cost
• status
• finance

Question 3

decisions to be made upon formation of a company

Answer 3

basically all of them- name, office, directors, statement of capital

Question 4

articles of association

Answer 4

govern the company and must be complied with

can only be amended through a special resolution

Question 5

person with significant control

Answer 5

contained in the person with significant control register

25% or more of share capital or voting rights or the right to appoint or remove the majority of the board

Question 6

application to become a public company

Answer 6

must have a special resolution approving decision
apply for reregistration
issue revised articles

Question 7

post incorporation matters

Answer 7

whether to appoint a chair
bank accounts
company seal if desired
auditior appointment
service contracts
tax registration

the name, accounting reference date - both must be authorised through special resolution

Question 8

Private limited companies

Answer 8

• have separate legal personality
• limited liability
• owned by the shareholders
• managed by directors
• audited and published accounts
• governed by articles

Question 9

Limited Liability Partnerships

Answer 9

• separate legal personality
• limited liability
• must have at least two members, of which two must be designated members
• decision making through majority vote
• accounts audited and published
  *can give fixed and floating secuirty
  *incorporated via companies house and a small fee

Question 10

general partnerships

Answer 10

no separate legal personality
unlimited joint and several liability
must have at least two partners
decision making through majority vote
accounts produced but not audited or published
can be terminated at will
pay income tax

Question 11

sole traders

Answer 11

no separate legal personality
unlimited liability for the owner
no accounting requirements
may be terminated at will

Question 12

formation of a partnership

Answer 12

no formalities- automatically governed by PA 1980 unless a partnership agreement in place

Question 13

Partnership agreements

Answer 13

allow partnerships to vary the requirements in the PA 1980 - contain all the rules and regulations of the partnership

Question 14

default decision making in partnerships

Answer 14

majority basis (may be altered by PA)
except for changing the nature of the business, introducing a new partner or changing the partnership agreement- unanimity.

Question 15

Expulsion from a partnership

Answer 15

no power in PA 1980 - must be expressly added

Question 16

Dissolution from a partnership (under PA 1980)

Answer 16

1- when a partner retires
2- expiry of a fixed term
3- death or bankruptcy of a partner
4- if the partners give notice to a partner who has granted a charge over their property in the partnership
5- via court order

Question 17

court ordered dissolution of a partnership

Answer 17

a partner can apply to the court for dissolution of the partnership where
a partner is permanently unable to do their job
conduct is prejudicial to the business
will fully or persistently breached the PA
Partnership can only be carried out at a loss
for some other reason dissolution is fair, just and equitable.

Question 18

effect of dissolution of a partnership