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Corpoorate Governance & Law > Business structures, formation, constitution, admistration and partnership law > Flashcards

Business structures, formation, constitution, admistration and partnership law Flashcards

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1
Q

Who is liable in an unlimited partnership and to what extent?

A

All partners are jointly and severally liable.

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2
Q

What is meant by limited liability?

A

Limited liability means that shareholders or partnership memebers in a limited liability partnership are limited in liability to the amount of capital they have contributed. Ie if the company goes insolvant, the shareholders do not owe any money personally.

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3
Q

If a shareholders shares are not fully paid and the company goes into liquidation, are they liable for any debts?

A

Yes but only to the point of fully paying their shares.

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4
Q

What is meant by “limited by shares”?

A

The liability is limited to any amount unpaid on its shares.

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5
Q

What is meant by limited by guarantee?

A

Liability is limited to the amount owners have agreed to pay in the event of the company becoming insolvant.

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6
Q

What is an unlimited company?

A

There is no limited liability for shareholders, so its owners are liable for any unpaid debts of the company.

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7
Q

What is an advantage to being an unlimited company?

A

It is not required to make its annual accounts public.

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8
Q

What is a quoted company?

A

A company that has its shares listed on a major recognised stock exchange.

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9
Q

What is the minimum share capital requirement for a private company?

A

£0 There is no minimum requirement.

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10
Q

What is the minimum share capital requirement for a public company?

A

£50,000 nominal value and atleast a quarter of this paid up.

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11
Q

What is the minimum number of shareholders a Puiblic limited company can have?

A: 1000
B: 5
C: 2
D: 1

A

D. 1

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12
Q

How many directors must a private company have?

A

At least 1

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13
Q

How many directors must a Public company have?

A

At least 2

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14
Q

True/False: A private company must have a company secretary.

A

False

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15
Q

True/False: A Public company must have a company secretary that is suitably qualified.

A

True

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16
Q

Do private and public companies need to hold an Annual General Meeting?

A

Only Public companies need to hold an Annual General meeting.

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17
Q

How long does a private company have to file its accounts with Companies House?

A: 6 Months
B: 9 Months
C: 12 Months
D 3 Months

A

B: 9 Months

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18
Q

How long does a public company have to file its accounts with Companies House?

A: 6 Months
B: 9 Months
C: 12 Months
D 3 Months

A

A: 6 Months

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19
Q

True/False: All private companies must have their accounts annually audited.

A

Flase. Small private companies do not need to have their accounts audited.

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20
Q

What is the dividend cap of a Community Interest Company?

A

35% of distributable profits.

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21
Q

What is a promoter in the formation of a company?

A

Someone who takes the neccsary procedures to establish and form a company. But not someone acting in a professional capacity.

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22
Q

What is a pre-incorporation contract?

A

A contract that is made on behalf of a not yet formed compnay by the promoter.

23
Q

What is a memorandum of association?

A

A document signed by the subscriber to the company, ie the companies first shareholder, in which they state their wish to form a company.

24
Q

When a company has a name that is considered to be too similar to your own, who would you apply to?

A

Company names adjudicator

25
Q

What is the initial consititution of a company called?

A

Articles of Assosiation

26
Q

Resolutions of the shareholders become part of the?

A

Companies consititution

27
Q

What is an Articles of Assosiation for?

A

To put the rules on how the company will be run into writing.

28
Q

Which of the following is not included in the articles of assosiation?

A. The powers & responsibilities of the company directors
B. Rules relating to dividend payments
C. What decisions should be taken by shareholders
D. The purpose and objectives of the company

A

D.The purpose and objectives of the company

29
Q

Who is the Articles of assosiation binding on?

A

The company & its shareholders.

30
Q

How may a company change its articles of assosiation?

A

It must obtain a special resolution from its members which requires atleasy 75% of members to vote for.

31
Q

What 3 types of powers may a company director have?

A
  1. Express
  2. Implied
  3. Apparent
32
Q

How are directors usually appointed?

A

Directors are usually appointed at a general meeting through an Ordinary Resolution(majority vote).

33
Q

As a requirement of the Model Articles of assosiation what is the process for reelection of directors?

A

At each Annual general meeting 1/3 of directors should retire and submit themself for reelection on a rotational basis.

34
Q

What is a Confirmation statement?

A

A statement submitted once a year to companies house that confirms all of the companies details are correct and informs of any changes that have occured.

35
Q

How long must accounting record be retained for private business?

A

3 Years

36
Q

How long must accounting record be retained for public business?

A

6 Years

37
Q

What is a class meeting between shareholders?

A

A meeting between with just a particular class of shareholders. ie Preference shareholders.

38
Q

When must Public companies hold their Annual General Meeting?

A

Within 6 months of the end of their financial year?

39
Q

When must private companies hold an Annual General Meeting?

A

They are not required to hold an AGM by law. But may have to due to their articles of assosiation.

But may have to due to their articles of assosiation.

40
Q

What matters are usually dealt with an an Annual General Meeting?

List of 4

A
  1. Presenting the companies financial statements
  2. Approving the final dividend proposed by directors
  3. Re-electing or electing directors
  4. Voting on the directors remuneration policy.
41
Q

Who is a general meeting usually called by?

A

Board of Directors

42
Q

What is required in order for a Ordinary Resolution to pass?

A

A simple majority of more than 50%

43
Q

What is required in order for a Special Resolution to pass?

A

A majority of atleast 75% of votes.

44
Q

What 2 ways can a resolution vote take place?

A
  1. A show of hands
  2. In a poll
45
Q

What is the notice period to hold a general meeting of a private company?

A

14 days

46
Q

What is the required notice period for an Annual General Meeting of a public company.

A

21 Days

47
Q

What are the 3 types of Partnerships?

A
  1. Unlimited Partnership
  2. Limited Partnership
  3. Limited Liability Partnership
48
Q

Is an Unlimited Partnership a legal entity?

A

No

49
Q

What fiduciary duties do partners have to each other?

A
  1. Duty to disclose
  2. Duty to account - for any benefit they obtain without consent of partners.
  3. Duty not to compete
50
Q

How should partners in a partnership split profits?

A: Inaccordance to capital contributed
B: Based on Capital contributed and Labour Contributed
C: Always equally

A

C: Always equally

Unless a junior partner in which they receive only a salary

51
Q

One partner in an ordinary partnership binds the firm to a contract. A new partner joins the partnership AFTER the contract was formed. Who is liable for this contract?

A: Just that partner
B: All partners
C: All partners except the new partner
D: The partnership as a whole

A

C: All partners except the new partner

52
Q

What is the difference between an Unlimted Partnership and a Limited Partnership?

A

In an unlimted partnership all partners are jointly and severally liable for the debts of the partnership whereas in a limited partnership one or more (but not all) of the partners have limited liablility (are a limited partner).

53
Q

What is the disadvantage of being a limited partner in a limited partnership?

A

They cannot be involved in the running of the partnership.

54
Q

Which type of partnership has its own legal entity?
A: Umlimted partnership
B: Limited partnership
C: Limited Liability Partnership
D: None

A

C: Limited Liability Partnership

Corpoorate Governance & Law (8 decks)

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