Ch 12- Corporations And Legal Personalities

Question 1

Define corporation.

Answer 1

Corporation is a term that is used for entities created in its own right and is separated in law . Eg : company. (Separated in law as in something that requires formal creation.)

Question 2

Unlimited companies do not have to file their accounts or make their accounts available to the public. True / false ?

Answer 2

True.

Question 3

What is a Company limited by guarantee?

Answer 3

Companies that limit the liability of its members to an agreed, nominal amount for the protection of the guarantor(s). Eg: charities, educational establishments…

Question 4

Are all PLCs listed on the stock market?

Answer 4

No.

Question 5

Key features of private LTD ( 8 points )

Answer 5

Min number of directors - 1
Min. Number of members - 1
Min. Number of shares - 1
Advertise shares / debentures to public - no
Time to hold accounting records - 3 years
Annual general meeting - optional
Company secretary - optional
File accounts after year end - 9 months

Question 6

Key features of plc ( 8 points )

Answer 6

Min number of directors - 2
Min. Number of members - 1
Min. Number of shares - £50,000
Advertise shares / debentures to public - yes
Time to hold accounting records - 6 years
Annual general meeting - compulsory
Company secretary - compulsory
File accounts after year end - 6 months

Question 7

Members of a company are separate legal persons to the company itself, separated by the __________?

Answer 7

Veil of incorporation.

Question 8

What is Fraudulent trading ?

Answer 8

Trading with the intention to defraud creditors or any other fraudulent purpose.

Question 9

Define Wrongful trading.

Answer 9

Continuing to trade an insolvent company.