Incorporation Flashcards
Which document is NOT required when incorporating a new company from scratch?
A) Memorandum of Association
B) Articles of Association
C) Shareholders’ Agreement
D) Form IN01
C) Shareholders’ Agreement
(A Shareholders’ Agreement is a private contract and not required for incorporation.)
What is the primary legal effect of a company’s Certificate of Incorporation?
A) It allows the company to open a bank account.
B) It grants the company legal existence from the date of incorporation.
C) It confirms shareholders’ voting rights.
D) It guarantees limited liability for directors.
B) It grants the company legal existence from the date of incorporation. (s16(3) CA 2006 – The company legally exists once the Certificate is issued.)
Which of the following is NOT included in Form IN01?
A) Registered office address
B) Statement of capital and initial shareholdings
C) List of company assets
D) Details of company officers (directors, secretary)
C) List of company assets
(Form IN01 only contains registration details, not assets.)
How can a company change its name after incorporation?
A) By filing Form IN01 again
B) By an ordinary resolution of shareholders
C) By a special resolution of shareholders or a procedure in the Articles
D) By Companies House decision
C) By a special resolution or as provided in the Articles. (s77(1) CA 2006 – A company can change its name via special resolution.)
A client wants to incorporate a new private limited company. They want it to be operational immediately and avoid dealing with initial paperwork. What is the best option?
A) Incorporate a new company from scratch
B) Purchase a shelf company
C) Register as a sole trader instead
D) Set up a general partnership
B) Purchase a shelf company
(Shelf companies are pre-registered, allowing immediate use.)
XYZ Ltd was incorporated under CA 2006 using Model Articles. The company later decides to modify its Articles to impose stricter director appointment rules. What must it do?
A) Submit Form IN01 again
B) Pass an ordinary resolution (50% shareholder approval)
C) Pass a special resolution (75% shareholder approval)
D) Obtain approval from Companies House
C) Pass a special resolution (75% shareholder approval) (s21(1) CA 2006 – Articles can be amended by a special resolution.)
ABC Ltd purchases a shelf company. What is the first legal step the new owners must take?
A) Begin trading immediately
B) Amend the company’s Articles
C) Transfer the shares to the new owners
D) File a new Memorandum with Companies House
C) Transfer the shares to the new owners
(New owners must legally take control before making other changes.)
A private limited company was incorporated with a single subscriber and one director. Can it legally operate?
A) No, because a private company requires at least two shareholders.
B) Yes, as a private company can be set up with just one shareholder and one director.
C) No, because every company must have a company secretary.
D) Yes, but only if the shareholder is also the company secretary.
B) Yes, as a private company can be set up with just one shareholder and one director. (s154 CA 2006 – A private company only requires one director.)
XYZ Ltd was incorporated with a registered office in England. The directors wish to change it to Scotland. What must they do?
A) Submit an application to Companies House (s87 CA 2006).
B) Pass a special resolution of shareholders.
C) Apply for a new Certificate of Incorporation.
D) Register the company again under Scottish law.
A) Submit an application to Companies House (s87 CA 2006). (A registered office change within the same jurisdiction is straightforward. Moving countries requires a new registration.)
DEF Ltd’s directors attempt to start trading before receiving the Certificate of Incorporation. What are the legal consequences?
A) The company’s contracts are invalid.
B) The company is liable, but the directors are protected.
C) The directors are personally liable for any contracts made.
D) The company must register again.
C) The directors are personally liable for any contracts made. (s51 CA 2006 – Pre-incorporation contracts bind the promoters, not the company.)
A client wants to register a company quickly but also wants custom Articles of Association. What is the best approach?
A) Purchase a shelf company and modify its Articles
B) Incorporate a new company and adopt Model Articles
C) Incorporate a new company and submit tailored Articles
D) Use a partnership structure instead
C) Incorporate a new company and submit tailored Articles
(This allows the client to have a customised governance structure from the start.)
