company law

Question 1

law with deals with the creation and regulation of business entities, the relationship between companies and their shareholders, creditors, regulators and third parties.

Answer 1

company law

Question 2

a group of people which is treated as a legal person, with a separate identity from its shareholding members.

Answer 2

a company

Question 3

business entity that is not a legal person

Answer 3

partnership

Question 4

why is a company the most popular business entity?

Answer 4

because of its limited liability of the members and its separate personality and tax treatment

Question 5

those who invest money

Answer 5

shareholders

Question 6

people who manage the affairs of the company

Answer 6

board of directors

Question 7

those whom the company owes money

Answer 7

creditors

Question 8

the process of registering a company

Answer 8

company formation

Question 9

is issued once the company’s constitutional documents and statutory forms have been files

Answer 9

certificate of incorporation

Question 10

the constitution of a company consists of two documents:

Answer 10

-the memorandum of associates (states object)
-the articles of association (regulates company’s internal management)

Question 11

a business entity that is owned by a single individual

Answer 11

sole proprietor

Question 12

A business organisation which is able to sell its shares to the public and whose directors and shareholders are not personally liable for the company’s losses beyond their own investments in the form of shares.

Answer 12

a publicly listed company

Question 13

A business organisation in which the profits and liabilities are shared between joint owners.

Answer 13

a partnership

Question 14

inter alia

Answer 14

among other things

Question 15

type of company organisation

Answer 15

vehicle

Question 16

raising money to pay for a business or business idea

Answer 16

funding

Question 17

responsibilities of leading company officers

Answer 17

directors’ duties

Question 18

process of bringing a company to an end

Answer 18

winding up

Question 19

Which entity best protects the property and assets of the shareholders?

Answer 19

corporation

Question 20

which entity no longer exists when its owner dies?

Answer 20

sole proprietorship

Question 21

Which of the entities mentioned is the most expensive to form?

Answer 21

corporation

Question 22

Which entity type(s) require relatively little paperwork?

Answer 22

sole proprietorship

Question 23

Which entity requires shareholder-employees to pay unemployment tax?

Answer 23

corporation

Question 24

advantages of corporations

Answer 24

not liable for debts
easier to raise money
easier to transfer
self-employment tax savings

Question 25

disadvantages of coroporations

Answer 25

higher cost
formal organization and corporate formalities
unemployment tax

Question 26

monitor the activities of companies to ensure that they comply with the law.

Answer 26

regulators

Question 27

main advantage of a corporation

Answer 27

its owners, known as stockholders or shareholders, are not personally liable for its debts and liabilities

Question 28

major disadvantage of a corporation

Answer 28

double taxation

Question 29

how to avoid double taxation of a corporation?

Answer 29

to choose to be taxed as a pass-through entity, like a partnership or a sole proprietorship. That way, there is only one level of taxation