Law Deck Flashcards
1
Q
The contract is made aurally so it is…
A
Unenforceable
2
Q
Is an advertisement an offer, a supply of information or an invitation to treat.
A
Invitation to treat, an invitation for the buyer to make an offer.
3
Q
If an offer is accepted before any revocation is received the offer is…
A
Valid
4
Q
If one of the parties is under 18 the contract is…
A
Voidable
5
Q
What two things must a consideration be?
A
Sufficient, not necessarily adequate. It must have some value but it doesn’t have to be enough.
6
Q
What are the three essential elements of a contract?
A
Offer and acceptance, consideration, intention to create legal relations
7
Q
What is a voidable contract?
A
The contract is binding unless one party chooses to avoid it.
8
Q
What is an unenforceable contract?
A
The contract is valid but the parties cannot be held to its terms.
9
Q
What is a void contract?
A
Neither party is bound
10
Q
What is the postal rule?
A
Acceptance is complete and effective as soon as a letter is posted.
11
Q
What is executed consideration?
A
An act in return for a promise. Eg paying for goods when they are handed over.
12
Q
What is an executory consideration?
A
A promise in return for a promise. A promise to pay for goods when they are put on order.
13
Q
What is the governing law clause or choice of law clause?
A
It says in an international contract which country’s laws will apply under dispute.
14
Q
What is quantum meruit?
A
When someone is given as much as they deserve.
15
Q
What is discharge by frustration?
A
When a contract is somehow made impossible to fulfill.
16
Q
What is a mandatory injunction?
A
Order to take positive steps to undo something that has been done in breach of contract.
17
Q
What is a prohibitory injunction?
A
The defendant must observe a negative promise in the contract.I.e. You promised not to do something
18
Q
What is an asset-freezing injunction?
A
Prevents the defendant from dealing with the assets where the claimant can convince the court that he has a good cause and there is a danger of the defendants assets being exported or dissipated.
19
Q
What are some types of dispute resolution
A
Negotiation, mediation, arbitration, adjudication, expert determination
20
Q
What is UCTA
A
Unfair contract terms act, provides exclusion for certain clauses if they fail to satisfy a test of reasonableness
21
Q
What is an agent of necessity?
A
When someone acts as somebody else’s agent in an emergency when they can’t get in touch with the principal, they can’t act on their own interests
22
Q
What is agency by estoppel?
A
When the principle implies somebody is their agent and the agent acts on this even though they’re not an agent.
23
Q
What is the duty of “accountability” for an agent?
A
That an agent must provide full information of his transactions to his principal. He can’t accept money from the people he is working with. This is considered a bribe and is fraudulent.
24
Q
What is ratification?
A
When the relationship of prinicpal and aent is extended with retrospective effects
25
What conditions need to be in place for the principal to be able to ratify?
The principal must have been in existance at the time of the act, the principal must have had the legal capacity to make th econtract himself (at the time of the act and at time of ratification), the agent must have named or identified the principal who on whose behalf he is making the contract.
26
What is ostensible or apparent authority?
If an agent is allowed to do something more than what was required, and the principals don't dispute this action then they have given ostensible authority and will still be liable.
27
What are the four ways agency can arise?
Agency by consent, estoppel, necessity or ratification
28
What is ostensible Authority?
The authority which the principal represents to other persons he has given to the agent.
29
What are he three types of authority an agent may have?
Actual express authority, Actual implied authority, ostensible or apparent authority.
30
What is tort?
An a act or omission by defendant that is responsible for causing injury or damage to claimant.
31
What are the four tests of duty of care?
Reasonableness, proximity, fair, public policy (is there a public policy requiring no duty of care?)
32
What is "res ipsa loquitur"?
When reason for damage isn't known but it wouldn't have occurred without lack of care. "The facts speak for themselves"
33
What are some factors in proving duty of care?
Purpose is communicated, there is a clear relationship, the knowledge of the professional, if the professional had assumed responsibility, class size, third party known to professional, reliance of claimant, foreseeability, fairness
34
What happens in contributory negligence defense?
Payment is fraction of how much it is their fault.
35
What is "volenti non fit injuria"?
When the claimant voluntary takes the legal risk.
36
Damages can be recovered if...
The action isn't too remote, if there was intention then it is never too remote.
37
Vicarious liability is
A legal liability where a person doesn't commit tort themselves but e.g. An employee does.
38
The three essential elements for a negligence claim to be successful are...
Duty of care, breech of duty, consequential damage.
39
To be vicariously liable the act is committed by
An employee, and the employee must have been acting in the scope of his employment.
40
What is the lifting of the veil?
When the veil of incorporation that separates members and a company can be lifted to expose certain actions.
41
Share capital of public company must be ...
Subject to authorised minimum (50,000) no min for private.
42
If something is bought before the company was made...
It cannot be ratified, responsibility lies with the individual.
43
On formation of a private company limited by shares these documents must be delivered to registrar:
Memorandum of association, application with details, copy articles of association, statement of capital and initial share holdings, proposed directors, statement of compliance.
44
The contractual effect of a company's constitution binds...
The company and members, not outsiders.
45
A provision for entrenchment is for ...
Altering company articles, agreement by all members or court order. Amended article must be sent to registrar by 15 days
46
What is in a directors report?
Name of directors, principal activities of company, statement that the auditor is not aware of any relevant audit information.
47
What is in the annual return?
Address of company's registered office, prescribed particulate of directors and secretary, type of company and principal business activity, address where register of members can be inspected, statement of capital and prescribed particulars.
48
What is a limited company?
The liability of the members is limited to the amount outstanding on their shares or the amount of any guarantee.
49
When might the veil of incorporation be lifted?
To reveal true national identity, where the company is a quasi partnership, where a company is a sham, where a subsidiary company can be regarded as an agent of the holding company.
50
When would statute provide for the veil of incorporation to be lifted?
Public company trading without certificate, fraudulent it wrongful trading, director carrying in business when disqualified, directors form new company with name similar to insolvent company.
51
A public company minimum share capital is?
£50,000 (0 for private company)
52
How many directors must a company have?
At least 2 if public, 1 if private.
53
When can a company commence trading?
Not before it has a trading certificate if public. Once incorporated if private.
54
If a company does business or borrows before obtaining a trading certificate the transaction is...
Valid and the directors are punishable by fine.
55
The memorandum of association for a company limited by shares records subscribers...
Wish to form company, agreement to become members, agreement to subscribe to at least one share.
56
What is an "off the shelf" company.
Eg buying a dormant company to avoid pre-incorporation contracts.
57
If articles of a company aren't registered...
Default articles prescribed by Secretary of State will apply.
58
What is a de facto director?
Someone who acts as director and so becomes one, not appointed.
59
How can a company remove a director?
By passing an ordinary resolution to hat effect, special notice of 28 days must be given.
60
Entering into a contract if a director is express, implied or ostendible is...
binding for all types od directors.
61
In s 171, can more shars be allocated by director to get approval?
No
62
Name some of the director duties:
s171 To act within powers, s172 To promote success of the company, s173 To exercise independent judgement, s174 To exercise reaosnable care, skill and diligence. s175 to avoid conflict of interest. s176 not to accept benefits from third parties. s177 to declare interest in proposed transactions.
63
Conflict of interest duty isn't infringed if it has been authorise by directors, this may happen when...
it isn't invalidated by a private comapny's constitution, or it is expressly allowed in a public company's constitution.
64
A disqualification order for up to 15 years may be made if...
When convicted of serious offence, in the winding up of a company if there has been fraudulent trading, if the secretary of state considers it to be in public interest, director is guilty of certain breaches of competition law, director has participated in wrongful trading.
65
A disqualification order of up to 5 years may be made if..
where a perosn has been persistantly in default in relation to provisions of company legislation. (Three convictions for default in five years.)
66
A disqualification order must be made of minimum 2 years and maximum 15 years if...
If he directed a company which has been insolvent and conduct now makes him unfit for management of a company.
67
A bankruptcy order (for someone wanting to be a director) ...
..automatically disqualifies some one from acting as director.
68
What is the period of disqualification for persistant default in filling annual returns is ...
less than or equal to 5 years.
69
What is the period of disqualification for fraudulent trading ...
less than or equal to 15 years.
70
What is the period of disqualification for wrongful trading ...
less than or equal to 15 years.
71
What is the period of disqualification where the court considers that a directors conduct makes him unfit in the management of a company is ...
2 to 15 years.
72
Some actions concerning directors that require approval of members in general meeting are...
service contracts, substantial property transactions, loans to directors etc., certain quasi loans, payments for loss of office (exceptions for small payments - £200). (Most are voidable if breeched).
73
When is member approval required for service contracts?
If a directors employment is to be of two years or more
74
How substantial must a property transaction (acquiral) to require approval of members?
10% of company's asset value and is more than £5000 or exceedes £100,000.
75
How big must minority have to be to apply to court for cancellation?
At least 15%
76
What percentage must the minority be to request a company meeting?
At least 5%
77
What percentage must the minority be to request a notice of members' resolutions?
At least 5%
78
What percentage must the minority be to request a prohibition of payment out of capital by private company or redemption of purchase of shares?
Any member can request it.
79
What percentage must the minority be to prevent registration of limited company as unlimited?
Can be prevented by individual members.
80
Can a member sue a director for lack of duties?
Not really, duties are owed to company so company is proper claimant, member can make derivative claimm on behalf of company. (Member must first make prima facie case).
81
When would a member be refused permission to make prima facie claim against director?
If the relevant act has been authorised by company, or if a person acting in accordance with duty to promote success wouldn't seek claim.
82
In making a prima facie against a director the court will also regard...
If the member is acting in good faith, the importance someone promoting success would attatch to it, weather authorisaiton or ratification is likely, whether the company has decided no to pursue claim, whether th emember could pursue claim in own right, the views of members with no personal interest in matter.
83
Winding up a company to solve a dispute is rare. Exceptins are:
If the company was made for illegal or fraudulent purposes. If there is a complete deadlock of management affairs. If the directors have deliberately withheld information so shareholders had no confidence.
84
General meetings may be called by...
The directors, 5% of members, the court, auditor giving notice of resignation and meeting request.
85
General meeting of public company must be called if
Net assets fall to half or less of its share capital.
86
After request for meeting
Directors must call meeting within 21 days to be held within 28 day notice period. If failure, 50% members may call meeting within 3 months of initial request.
87
Notice of at least ____ must be given for meeting
14 days
88
Every public company must hold an annual general meeting ...
Within six months following accounting reference date.
89
Notice for AGM is...
21 days
90
For a notice period of less than 14 days how much of share/vote holders have to consent?
95% for general meeting and 100% for AGM
91
Written resolution proposal may be given by directors of private company without meeting except...
To remove a director or auditor. Written resolution must be passed within 28 days from circulation.
92
AGMs of a public company require notice of ...
21 clear days (excluding day of notice and meeting)
93
Special notice of 28 days needs to be given for a resolution to...
Remove auditor or remove director.
94
A quorum is
The minimum number of people needed at a meeting. (2) otherwise the meeting is inquorate.
95
Records if resolutions passed, minutes of general meeting and decisions by sole members of companies must be kept for...
10 years
96
How many directors must a company have?
2 if public, 1 if private
97
What is a shadow director?
Someone in accordance with whom the directors are accustomed to act.
98
What kind of resolution is needed to remove a director?
Ordinary resolution with special notice.
99
What indicates that the power of the directors is subject to the will of the members at a meeting?
Article alteration / capital reduction needs special resolution, borrowing power / directors office removal needs ordinary resolution.
100
A disqualification undertaking instead of order might be accepted by Secretary of State if...
Director is considered unfit to be concerned with company management
101
What is the principal advantage of a shareholders agreement?
It does not need to be registered or open to public inspection.
102
What requires approval of members, consequences of breech?
Service contracts (void), big property transactions (voidable), loans to directors (voidable), payment for loss of office.
103
Three possible actions available to minority unhappy with majority actions?
Derivative action under s260 if majority is directors, derivative action under s994 for unfairly prejudicial conduct, petition for winding up if company on just and equitable ground.
104
When must a public company call a general meeting?
At AGM or if net assets are half or less of called up share capital.
105
When can a written resolution not be used?
In a public company, to remove auditor, to remove director.
106
How many days notice must be given for special notice?
28 days
107
If a poll is taken the previous show of hand vote...
Is disregarded.
108
What type of share carries statutory rights of preemption in the absence of any express provision?
Ordinary shares
109
What type of share carries a right to a dividend at a specified rate which is deemed to be cumulative in the absence of any express or implied provision to the contrary?
Preference shares
110
What type of share carries an automatic right to have capital repaid in the event if the company being wound up?
Preference and ordinary
111
What type of share carries a right to vote in the absence of any express provision.
Preference and ordinary.
112
When a company decides to allot equity securities it must first...
Offer shares to holders of similar shares in proportion to their holdings. (Pre exemption rights - offer for at least 21 days)
113
Preference shares and the right to vote.
It is usually expressed that they don't have the right to vote.
114
If there is surplus afte rrepayment on liquidation, preference share holders...
have no right to it.
115
Rights of shareholders can be varied, to have a variatio ncancelled ...
15% of holders of a class must apply within 21 days and claim it as "unfairly prejudicial"
116
Unfairly prejudicial means...
the majority voted just to gain an advantage instead of considering the class interests.
117
What type of share carries preemption rights in absence of express provision?
Ordinary shares
118
What type of shares carry a right to a dividend at a specified rate which is deemed to be cumulative in the absence of any express or implied provision to the contrary?
Preference shares
119
What type of shares carry automatic rights to have capital repaid in the event of the company being wound up?
Preference and ordinary
120
What type of share carries a right to vote in the absence of any express opinion?
Preference and ordinary
121
If new shares are offered (equity) then first...
They must be offered to existing holders of similar shares in proportion. (Preemption rights)
122
Preemption right offer must be made for...
21 days
123
Special treatment for payment of shares in public companies is...
Must be paid in cash for subscribers, must pay up at least 1/4 of nominal value and whole of any premium amount. Long term undertaking of more than 5 years ahead not allowed. Non cash payments must e independently valued.
124
Can a company amend its articles of association to incorporate a provision excluding the statutory rights of pre-emotion?
Only a private company.
125
Shareholder must notify issuer when he holds...
3% of voting rights and every 1% thereafter.
126
Shareholder must notify issuer when...
He holds 3% of voting rights, and every 1% thereafter.
127
Companies must satisfy the authorised minimum share capital requirement of
£50,000
128
Limited company can reduce its capital by ...
Special resolution confirmed by the court.
129
A private company can reduce its capital by...
Special resolution supported by a solvency agreement given by all directors.
130
A limited company may only purchase it's own shares out of...
Distributable profits of the company or the proceeds of a fresh issue of shares made for the purpose of financing the purchase. (Private companies can buy their own shares more freely)
131
Private companies are no longer prohibited from giving
financial assistance for the acquisition of their shares.
132
A public company is prohibitied from giving
financial assistance at or before the time of an acquisition of shares in a public company.
133
The buy-back of redeemable shares out of capital for a company is
Prohibited for a public company, permitted for a private.
134
The purchase of a company's own shares out of capital is
Prohibited for a public company, permitted for a private.
135
The provision of a loan to a director for the purpose of acquiring shares in a company is
Prohibited for a public company, permitted for a private.
136
A reduction of capital authorised by the court is
Permitted for a public company, permitted for a private.
137
Fixed and floating charges.
Fixed charges are for specific assets, related assets and disposable or deal with able by company. Floating charges are for a class of assets, no particular restrictions until crystallisation.
138
Charges paid back in full in order of priority
Legal before equitable and in order of time. Equitable is only first if legal chargee had notice of earlier equitable chargee.
139
Preference shares have a right to
Be paid dividends before others.
140
The right to receive a dividend for a preference share holder is
Cumulative, they have priority over ordinary shares in return of capital.
141
The called up share capital is
The amount for shares requested by company.
142
For a variation of class rights a company needs
A special resolution from at least 75% of that class.
143
What minimum percentage of share holders in a class may apply to the court for a variation of class rights to be cancelled
15% who have not themselves consented to the variation
144
Where authority to allot shares is given to directors in the company articles, what resolution is needed to vary or renew the authority?
Ordinary resolution (usually special for article alteration).. But authority to allot can be given in ordinary.
145
Who gets preemption rights?
Ordinary share allotments for cash, not bonus issues, part paid shares or allotments Persuant to employee share scheme.
146
A share premium account can be used for
Bonus issues of shares or discounts on the issue of debentures.
147
When a company received an instrument of transfer it must register the transfer or give notice of refusal within
2 months
148
How might a private company reduce to share capital?
By special resolution either approved by court or supported by a directors solvency statement
149
How can a company's share capital be altered but not reduced?
Allotment of more shares, subdivision, consolidation.
150
Redemption of shares requires an
Ordinary resolution
151
What safeguards are needed for a private company to be authorised to redeem or purchase its shares out of a capital?
A directors statement, an auditors report, a special resolution, public notice of the proposed payment.
152
Are there restrictions for a private company providing financial assistance for the purchase of shares?
No
153
Can a private company purchase its own shares where they are partly paid up provided it has sufficient distributable profits?
No, only fully paid up ones.
154
A public company cannot make a distribution if it would reduce the company's net assets to below the net aggregate of its
Called up share capital and undistributable reserves
155
Debentures, voting rights, interest and liquidation.
No voting rights, interest paid and priority in liquidation.
156
A floating charge
Is a charge on a class of assets, (present and future) class is in ordinary course of company business changing from time to time.
157
Company law requires a company to maintain
A register of charges and to make it available for public.
158
Crystallisation happens in
Liquidation, cessation, after giving of notice by chargee if contract provides.
159
After creation most charges need to be registered by
21 days
160
When a charge is registered the registrar must be sent
Copy of charge, date created, amount of debt it secures, property to which it applies, person entitled to it.
161
What remedies are available to a secured debenture holder to enforce his security?
Take possession of asset subject to charge and sell it. Appoint receiver of it.
162
When a company intends to wind up voluntarily but directors unable to make decision of solvency…
the liquidation proceeds as a creditors voluntary winding up even if in the end debts ar epaid in full. Liquidation not initiated by creditors.
163
An administrator should (in order of preference):
Rescue the company as a going concern, achieve a better result for creditors, realise assets to make distribution to secured creditors.
164
Appointment of an administrator can be made by…
The company, directors (most usual), creditors, qualifying floating charge holders.
165
An administrator must …
Take control of company’s property and use powers to manage company
166
Notice of appointment of administrator must be filed …
within 7 days
167
Statement of proposals for achieving aim of administration should be filed…
Within 8 weeks to registrar, creditors, members.
168
The administrator must hold accreditors meeting within …
10 weeks, proposals may be accepted or rejected.
169
The administrator’s appointment is terminated …
after 1 year.
170
During administration the following moratorium implies …
No resolution to wind up company allowed, no enforcement of fixed charges over property, no recovery of property on lease/HP, no other legal procedings.
171
During administration, regarding floating charge assets…
The administrator can sell floating charge assets and use proceeds for business without charges consent.
172
The administrator can sell assets on HP or fixed charge…
With approval of court, proceeds to pay off owner or charge.
173
An administrative receiver is…
Appointed by floating chargeholder, manager with control over substantial part of property/business, can take legal proceedings, pay off creditors with pref. rights…
174
A fixed charge receiver is…
Appointed by holder of a fixed charge. Role is to collect rent/sell property. Realise property for benefit of lender. Appointment of receiver is usually followed by crystalation.
175
Appointment of administrator dismisses the …
Administrative receiver.
176
CVA is a company voluntary arrangement to avoid being wound up it is approved by…
Simple majority in value of members, or a majority of more than 75% of creditors.
177
Challenge to a CVA from a creditor must…
Be given within 28 days of court being notified of results. Must show CVA unfairly prejudices his interests, or that there has been some material irregularity.
178
If directors of a small company wish to propose a CVA they may also apply for Moratium…
This is a proposal to creditors and gives breathing space. No winding up of company, no security over property, no crystalisaiton, meetings with consent form court nominee, nominee monitor company affairs.
179
On winding up, notice of special or ordinary resolution must be posted…
In the Gazette within 14 days.
180
Declaration of solvency must be made …
By all directors, including statement of assets and liabilities. Made less than 5 weeks before resolution to wind up is passed, delivered to registrar within 15 days after meeting.
181
At a voluntary liquidation, company convenes a meeting of creditors within 14 days of proposed members resolution, notice given in Gazette, in nominating liquidator…
At meeting members and creditors nominate liquidator, creditors choice takes first pick.
182
A compulsory winding up may happen if…
Company is unable to pay debts, or it is just and equitable to wind up company (usually done by dissatisfied member, only considered if company is solvent and he has been registered member for 6 of last 18 months prior to petition).
183
For compulsory wind up creditor must show…
He is owed at least £750 and it hasn't been paid within 21 days. He has tried to get payment.
184
BIS (department of business, innovatin and skills) may petition for compulsorary winding up of company if…
Public company hasn't obtained trading certificate within year of incorporation. Or from report from BIS inspectors that it is just and equitable.
185
On liquidation (liquidator often official receiver if appointed by court)…
Disposition of property void, legal proceedings against company halted, asset seizure is void, employees dismissed, floating charges crystallise, assets in liquidator control.
186
If you are owed money you can't appoint an administrator if …
you are an unsecured creditor with no floating charge.
187
A liquidator must…
Settle list of contributories (members who have a liability to contribute). Collect and realise assets. Discharge company debts. Redistribute surplus to contributories.
188
On voluntary wind up the liquidator must…
prepare account showing how winding up was dealt with, lay it before meeting of members/creditors. Next week file details with registrar who will deem company dissolved within 3 months.
189
On compulsorily wind up the liquidator must…
go back to court which makes an order dissolving the company. File order and registrar records company as dissolved from this date.
190
Some charges may be invalidated on winding up…
Charges not registered within 21 days. Transaction at an undervalue in two years prior to liquidation unless in good faith, for business or on reasonable grounds. Floating charge within 12 months prior or 2 years if connected person.
191
Liquidator on winding up should (esp. if compulsorily) adhere to the following order for distributing company assets?
Liquidation costs, Preferential debts (Inc. wages, holiday pay, pension), floating charges, unsecured ordinary creditors, deferred debts, Surplus (so solvent) given to members.
192
If the fund available for distribution is above 10,000 the ring fencing is..
when 50% of first 10,000 is ring fenced in liquidation payment of floating charges and 20% of floating charge realisations thereafter.
193
An individual voluntary arrangement (IVA)…
reaches compromise with creditors, supervised by insolvency practitioners, binds all creditors and none may petition for bankruptcy. Must be approved by 75% of creditors.
194
For an IVA the nominee must call a creditors meeting giving notice of…
proposals of the nominees comments, list of creditors, statement of affairs, details of meeting with proxy.
195
Advantages of an IVA…
Continue business, flexibility, no details in press (bankruptcy yes), greater satisfaction to creditors than bankruptcy, costs less than bankruptcy.
196
Disadvantages of IVA
5 years (longer than bankruptcy), there's an opportunity for a trustee to investigate debtors actions and possibility of hidden assets.
197
Petition for Bankruptcy is made by…
Individual, unsecured creditor who is owed more than £750 (same rules as compulsory windup), by someone bound by an approved IVA. Court hearing 14 days after petition service.
198
If debtor petitions for bankruptcy, court won't make order if…
total debts less than 4000, estate would be at least 4000, debtor hasn't been bankrupt in last 5 years or entered into composition scheme with creditors, it would be appropriate to make report leading to IVA.
199
Once a bankruptcy order is made the debtor becomes an undischarged bankrupt and…
cannot act as a director or insolvency practitioner, faces criminal liability for failure to cooperate with official receiver, can't practice as chartered accountant.
200
The trustee for bankruptcy requires creditors to prove debts then ranks them in the order of…
Costs, pre-preferential debts, preferential debts (wages, pension, holiday pay), ordinary debts, interest, postponed debts, surplus - returned to the bankrupt.
201
A bankruptcy is discharged at …
one year after the order, but may be subject to bankruptcy restrictions for between 2 and 15 years.
202
Who can apply for an administration order but can't appoint administrator out of court?
Creditor with no minimum value of debt.
203
The normal duration of a CVA (compulsory voluntary arrangement) is…
3-5 years.
204
The two most important grounds for compulsory liquidation are…
company can't pay it's debts, it's just an equitable to wind up company.
205
How are the powers of the members' nominee liquidator restricted pending creditors meeting?
Can only take control of property, dispose of perishable goods, do things for protection of assets.
206
In compulsory winding up who will the court appoint as liquidator?
The official receiver.
207
To avoid a charge in insolvency of floating charge in favour of unconnected person how recent must it be?
1 year
208
To avoid a charge in insolvency of transaction at an undervalue how recent must it be?
2 years
209
To avoid a charge in insolvency of preference in favour of an unconnected person how recent must it be?
6 months
210
What are the elements of a compulsory liquidation order?
Official receiver is liquidator, liquidation deemed to commence when petition presented, disposition of property since liquidation void, legal proceedings against company halted, employees dismissed, floating charges crystallise,
211
Can an individual subject to IVA still act as a director or a company?
Yes
212
The word 'Firm' is for…
A partnership only, not for registered company.
213
In absence of a partnership agreement follow the partnership act of 1890 which …
Sets out basic rights and duties of partners, rights to share profits, take part in business decisions, veto new partners, duty to share losses and indemnify other partners.
214
Particulars of the partnership act regarding, interest on capital, remuneration, new partners, expulsion,
None is paid except in agreement but entitled to 5% beyond original capital, no remuneration, unanimous vote on new partners, expulsion by majority votes.
215
Expulsion in a partnership…
Must be in good faith, not just if they don't like his ideas.
216
In a partnership, all partners are bound by…
what other partners do for the firm unless it is expressly decided. Unless the partner pledges credit not related to business (unless express authority).
217
If there is a restriction on a partner and a third party is aware…
no act is binding. If third party believes there is authority then there is (even if retired people included).
218
Partnership is dissolved upon…
death or bankruptcy of partner, expiry of fixed term partnership, completion of joint venture, subsequent liability, notice given by partner, order of court (if just and equitable).
219
Disadvantages of a incorporation over a partnership are…
File accounts with registrar, must be registered, cost of compliance and admin and annual audit, documents open to public, strict rules on capital repayment.
220
A company's liability is…
Unlimited, it is the members' liability that is limited.
221
In a limited liability partnership…
there is a separate legal entity from members (whose liability is limited), members are taxed on individual profits.
222
In a limited partnership…
One partner has unlimited liability and control of management. Others cannot manage, or bind partnership. Liability is limited to capital.
223
For formation of LLP use an incorporation document that states…
Name of LLP, location of office, names of members, two members who can sign notices. Changes of partnership told to Registrar within 14 days.
224
LLP is required to:
maintain register of charges, notify registrar of membership change, provide name of LLP, deliver annual return to Registrar.
225
LLP and auditing…
An LLP is normally subject to requirement to have it's accounts audited.
226
LLP insolvency rules are similar to companies except…
withdrawals made by members within 2 years prior to winding up can be clawed back if member had grounds to believe it would become insolvent, on wind up, past and present members may need to contribute to assets.
227
What are some rights of partners?
Involved in decisions, share profits, examine accounts, insist on openness and honesty, veto new partners, to be indemnified by other partners.
228
What must an LLP deliver to the Registrar annually?
Audited documents and annual return.
229
Whistleblowing protection is received if the disclosure is…
A qualifying disclosure of information, made in public interest, made to the appropriate person.
230
Qualifying whistle blowing disclosures show…
Criminal offences, failures of legal obligations, miscarriage of justice, health and safety and environmental concerns, concealed information about these.
231
Whistleblowing should be raised with…
internal persons first ideally. To media police and MP's only if it is reasonable and not for personal gain.
232
The three types of fraud are…
Fraud by false representation, by failing to disclose information, by abuse of position.
233
The maximum penalty for fraud is…
10 years imprisonment and unlimited fine. Perhaps disqualification of up to 15 years from acting as director.
234
Penalties for insider dealing (i.e. auditors buying shares in a company they investigate)…
7 years in prison and unlimited fine.
235
The four classes of bribery are…
being bribed, bribing another person, bribing a foreign public official, corporate failure to prevent bribery.
236
Money laundering is…
Where proceeds of crime are converted to assets that seem to have legitimate origin.
237
Examples of money laundering are…
Illegal arms sale, smuggling, drug trafficking, prostitution, tax evasion, bribery, financial fraud.
238
Punishment for money laundering is…
14 years imprisonment, unlimited fine.
239
Punishment for failure to report money laundering is…
5 years imprisonment, unlimited fine.
240
Punishment for tipping off is…
2 years imprisonment, unlimited fine.
241
Money Laundering regulations apply to…
Financial institutions, accountants, independent professionals, estate agents, casinos, high value dealers (goods for cash of more than 15,000 euros).
242
Money laundering regulations are designed to achieve…
suspicious transaction tracking, and that a relevant person can provide part of an audit trail if someone is in suspicion later.
243
Money laundering regulations cover…
Customer due diligence, record-keeping, procedures, training, supervision, registration, enforcement.
244
Customer due diligence means…
knowing your client.
245
Customer due diligence must be carried out when…
business relationship is established, occasional transactions, suspect money laundering or terrorist financing, doubt of veracity of information.
246
Business records must be kept for a minimum of …
5 years.
247
Signs of money laundering may be…
reluctance to provide id proof, no reason for business, abnormal business, large transactions, third party payments.
248
What act governs the law of whistleblowing?
The public interest disclosure act of 1998
249
A person making a qualifying disclosure must…
have the disclosure made in reasonable belief that it is true.
250
In the event of whistleblowing the worker…
may claim damages.
251
Insider dealing offences are…
dealing in securities, encouraging others to deal, disclosing information.
252
Does failing to report money laundering because the suspicion was formed in privileged circumstances count as a defence?
Yes
253
Legal and professional privileges that mean people need not disclose information apply to…
solicitors, barristers and suitably qualified foreign lawyers.
254
Essential elements for an emloyee are (all are needed)…
Personal service, control from employer, mutuality of obligations (provide/do work)
255
contract of service and contract for services means…
employed and self-employed respectively.
256
In liquidation employees have …
preferential rights over payment.
257
If there is an espress term such as a mobility clause where the employee will work in different locations…
the power must be exercised with reasonable notice.
258
Within 2 months of employment the employer must give to employee a statement of particulars including…
Names of employer/ee, date of commencement, previous service, pay, hours, holiday, sick leave, pensions, length of notice, disciplinary procedures.
259
Duties of an employee are…
faithful service, obey law and reason, trust, personal skill, reasonable care.
260
Duties of an employer are…
Pay reasonable (unless agreed) remuneration, indemnify employees, health and safety, provide work, accurate reference if requested, trust.
261
Reasonable notice of leaving for work after 1 month to 2 years, to 12 years to above of employment is…
more than a week, more than a week for each year of work, more than 12 weeks.
262
Claims for unfair dismissal can be made if…
in Great Britain, no unofficial strike, at least 2 year employment. (armed forces break ok).
263
In a claim against employment dismissal to the tribunal the employee must show…
date notice expires/ termination takes effect/ date when term expires. He is qualifying employee and dismissed.
264
A constructive dismissal is…
Where the employer repudiates (changes) essential terms of contract and employee resigns.
265
An employee is entitled to request a written statement with reasons for dismissal within…
14 days if continuously employed for a year at least.
266
Dismissal doesn't include…
Resignaiton (unless constructive), contract frustration, parties come to mutual agreement to terminate.
267
Some reasons for unfair dismissal include…
pregnancy, conviction under rehabilitation of offenders act, trade union activities, transfer of undertaking, taking steps to avoid danger, protected disclosure making, enforcing statutory rights.
268
Some reasons for fair dismissal include…
Capability or qualifications, employee misconduct, redundancy, statutory restriction, other substantial reason (marriage to competitor, peadophile activity).
269
The continuous employment requirement for employees who began employment after 6 April 2012…
is to have been employed for 2 years to make unfair dismissal claim, otherwise, 1 year.
270
In an unfair dismissal case the tribunal may increase or decrease the award by…
up to 25% depending on behaviours.
271
Remedies for unfair dismissal (often better than for wrongful dismissal) include…
reinstatement, re-engagement (new engagement with employer), awards (basic, compensatory, additional).
272
Wrongful dismissal is when …
The employer dismisses employee in breach of contract.
273
Summary dismissal is justified dismissal (not wrongful), related employee conduct includes…
refusal to obey law, gross misconduct, dishonesty, gross/persistant negligence, breach of an express term.
274
Someone can claim redundancy pay if…
he's an employee, continuously employed for 2 years, follows claim procedure, told no longer needed in that capacity.
275
Claim procedure for redundancy pay, the claimant must show that…
He has been dismissed for redundancy, has been laid off or on short time (earns half pay) for 4 consecutive weeks or 6 weeks in a period of 13,
276
Non-compliance with the data protection act may result in…
civil liability, criminal liability, databases forfeited, rectification costs, fine of up to £500,000.
277
The eight data protection principles which data controllers must comply with are…
lawful processing, lawful purpose, relevant and unexcessive, accurate, rights, technical and organisational measures, retention within european economic areas.
278
The rights of data subjects are…
access, avoidance of damage, junk mail prevention, automatic decisisons, compensation, action against innaccurate data, right to ask information commissioner.
279
Data that is exempt from the act is…
payroll and accounts, exam scripts, unincorporated club member data, domestic data, research (not identifying subject), crime prevention, national security, confidential references from controllers.
280
Factors to take into account to determine if independent contracter rather than employeee are…
provides tools, can delegate, wears uniform, tax deducted at source, works for multiple parties, restriction on hours/location, hoidaty pay, length of employment.
281
Some reasons why the distinciton between employed and self employed are important are…
social security, tax, employment protection, tortious acts, health and safety, implied terms, vat, rights on insolvency.
282
What is the necessary period of continuous employment for an unfair dismissal in lack of qualificaiton, making protected disclosure, pregnancy?
2 years, none, none.
283
By how much may an award be adjusted in order to account for unreasonable failure to comply with ACAS code of practice in dismissal?
25% up or down
284
When is summary dismissal justified?
breach of contract by employees, i.e. gross negligence, wilful refusal to obey lawful instructions.
285
Name the three remedires available for wrongful dismissal.
Damages, injunction, declaration.
286
What is the period of continuous employemnt in a claim for redundancy pay?
2 years
287
Under the data protection act, data may not be held for longer than…
is necessary for the purpose.
288
Which is not exempt from the Data protection act: Individuals Examination script, payroll record, data about marital status, domestic data about household affairs.
Data about marital status.
289
What is the maximum length of imprisonment that can be imposed for failing to report a suspicion of money laundering?
5 years plus unlimited fine. Money laundering itself is 14 years, tipping off is 2 years.
290
Under the partnership act 1890 do partners have a statutory right to share in capital, profits and losses in proportion to initial capital?
No
291
Under the partnership act 1890 do partners have a statutory right to have unfettered access to firm's books?
Yes
292
What percentage of creditors is required to approve a proposed individual voluntary arrangement (IVA) at a creditors meeting convened for that purpose?
75% Majority.
293
What is a debenture?
A document that records the terms of any loan.
294
In relief on the ground sof unfairly prejudicial conduct, what might a court order: Don't alter articles without court permission, Regulation of future conduct of company affairs, authorising legal proceedings to be brought on behalf of hte company.
Perhaps any/all of them.
295
T/F A company's articles of association can be altered by the passing of an ordinary resolution inless there is a provision for entrenchment, in which case a special resolution is required.
False - Alteration requires special resolution (Companies act). But unanimous agreement or a court order is required to alter a provision for entrenchment.
296
T/F A company may provide that a provision for entrenchment cannot be repealed.
False, Nor can it provide that a provision for entrenchment be amended.
297
Vicarious liability is only applicable when .... and the purpose is...
The employee is acting in the course of employment. Purpose is to protect the victim of the tort, not punish the employer.
298
Henry is advertising his dad's business, it was agreed he would be liable for £500 of each mistake or missed deadline. Is this: Liquidated damages clause, unliquidated damages clause, exclusion clause, penalty clause?
Penalty clause. Fairly arbitrary as applies to number of breaches irrespective of consequences. So it is likely penalty and necessarily void. If it was a genuine pre-estimate of loss it would be a valid liquidated damages clause.
299
Arthur is doing building work but the solicitors are still finalising the contract. The client is not happy with the work so far and plans to sue him. What will happen in terms of the contract?
The contract is likely to be deemed to exist and its terms will be a question of fact in all the circumstances. It is unrealistic to imagine the major works would have been undertaken with no contract. The terms cannot be readily assumed.
300
T/F Under the 8 data protection principles the data controller is obliged to ensure that personal data shall not be transferred outside the UK unless the country or territory to which it is transferred ensures an adequate level of protection for UK data subjects.
True, this is one of the principles.
301
T/F The data controller must keep the data subject informed (and supply copies) of all personal data held or processed for the subject.
False. The subject must request information.
302
The 8 Data protection principles are...
Larful processing, Lawful (specific) purpose, Relevant, not excessive, accurate and up to date, Not kept longer than necessary, In accordance with rights of data subjects under the act, Technical organisational and security measures, not transfered out of europe economy area unless adequate level of regulation.
303
The maximum penalty fr bribery is an unlimited fine and imprisonment for...
10 years.
304
Someone is owed £25,000 be a company. He proposes to petition the court for compulsorary winding up of the company on the grounds it is insolvent. What are the steps?
As it was more than £750, this is ok. He first must have given a written demand that was failed to be paid by 21 days. Then he can take this to court.
305
A public company can't give financial assistance for share acquisition unless the main purpose is something other than the acquisition and it's incidental and in good interests of company. I.e. allowed when...
Doesn't reduce company's net assets (unless given out of distributable profits). Also if lending is ordinary course of business, or given in good faith (employee share scheme) (not to directors).
306
Examples of being unfairly prejudicial are...
Exclusion of minority from board where in the company the director had expectation of being involved in managemenr (quasi-partnership), Improper share allotment, Misleading shareholders, Diversion of company business to director's business.
307
Which of these is not a factor to determine duty of care? State of knowledge of recipient, Purpose for which the statement was made, Whether it is just and equitable, Size of any class to which the recipient belongs.
State of knowledge.
308
Annabel is Phils agent and enters a contract with Tim expressly describing hereslf as Phils agent. Is she liable on the contract? And if she doesn't name Phil as her principal does that mean he won't be liable?
She would be liable, So would Phil if named or not.
309
Under the UCTA, in a consumer contract for the suply of goods and services, is a clause limiting liability for breach of the condition relating to the description void?
Yes
310
Is a clause limiting liability for personal injury resulting from negligence in a contract between two individuals subject to the reasonableness test?
Not between two private individuals, in a consumer contract such a clause would be void.
311
Things that are void under the UCTA:
Clause restricting liability for death or personal injury from negligence. Clauses that purport to exclude or limit liability for breach of undertakings as to title of the seller or owner (implied by Sale of Goods Act), With a customer, a clause that limits liability for breach of conditions relating to description, quality, fitness and sample.
312
Things that are subject to the reasonableness test under the UCTA:
Clause restricting liability for loss or damage from negligence. Any clause that limits liability for breach of contract where contract is based on standard terms or conditions and/or exclusion clause may be being used against consumer.
313
Which of these need to be satisfied for a third party to seek to enforce a contractual term under the Contracts Act: That the contract expressly so provides, That the third party must exist but need not be known to parties, that the third party is identified in the contract, that the term to be enforce to third party contains only positive rights.
That the third party must be identified in some way in the contract. Either the contract must expressly provide that the third party can enforce it or the term must confer a benefit on him (unless it appears the contracting parties did not intend him to be able to enforce the right). The act allows enforcement of exclusion clauses as well as positive rights.
314
Following the date of dismissal, when must someone bring a claim for statutory redundancy payment?
Six months.
315
If one partner signs a contract without the others then...
The firm, and therfore, all partners ar eliable on the contract. (not agents of each other).
316
Once a bankruptcy order has been made, can a secured creditor enforce his security against the bankrupt debtor? Does the debtor's property vest in the trustee in bankruptcy?
Yes to both, this is an important exception to the rule that the bankrupt can no longer be sued or have action taken against him by creditors. Such vesting occurs automatically and there is no need for any written contrat or transfer of rights or property.
317
Shares of a public company are transferable on a recognised stock exchange if the company is...
listed.
318
The companies act states that a director must avoid a situation where intrests conflicts with the company's. Unless authorused by other directors. When can this be done?
When expressly allowed in public company, or not expressly dissallowed in private one.
319
Does a public limited company need a secretary?
Yes
320
If acocuntants mis-give informaiton about a company making profit negligently that causes existing shareholders to buy more shares, but actually the company was making a loss, are hte accountants liable?
No, they do not owe a duty to the existing shareholders who rely on the accounts for a purpose other than that for which they were intended.
321
If someone acts on advice from an agent by estoppel, T/F the third party must show he relied on the representation. T/F It's not necessary to show the loss was cause by reliance on representation.
T and F. He must show he relied on the representation and this caused the loss, ther emust be a causal link.
322
T/F Anticipatory breech may be implied from conduct and need not be explicit.
True
323
T/F Where an innocent party elects to treat a contract as discharged, he waives the right to claim damages from the party in default.
False. He may treat the contract as discharged and sue for damages.
324
For a third party to seek to enforce a contractual term under the Contracts (Rights of third parties) act...
The third party must be identified in some way in the contract. Either the contract must expressly provide the third party can enforce it or the term must confer a benefit on him (unless it appears that the contracting parties did not intend him to be able to enforce the right). The act allows enforcement of exclusion clauses as well as positive rights.
325
Would the veil of incorporation be lifted if a company is registered in England and Wales but all its members except one belong to Neverland, a country with which England is at war? The company has five members with equal shareholding.
Yes
326
Can an agent delegate tasks as he sees fit?
No, it is seen as a personal duty.
327
Can an agent disclose information about the principal afte rhis engagement.
Nope.
328
T/F An employee must have been laid off, dismissed or put on short-term working in order to claim redundancy.
True
329
If Bob tells Freya about a company that will be successful, not knowng that she will trade on it, is he guilty of encouraging another to deal?
No - as he had no reason to think she would. But guilty of disclosing inside informaiton.
330
In the Partnership act 1890, eack partner is entitled to 5% per annum on all capital...
Beyond their initial capital investment.
331
What is the primary role of a receiver?
To realise the charged assets and pay off the appointing chargeholders debt. (Appointed by creditor with fixed charge)
332
Does a company secretary have the authority to sign admnistrative contracts like employing staff and ordering cars. How about for purchasing property for company.
The secretary will usually have authority for admin roles and this may include the first two. However secretarys usually aren't allowed to purchase property.
333
If a contract is frustrated then it is...
Void - neither parties have to pay.
334
T/F An acceptance of a contractual offer sent by email takes effect as soon as the person accepting the offer presses "send".
False - there is no clear law about this yet.
335
T/F Whether or not a postal acceptance is within the contemplation of the parties is a question of fact and may be deduced from all the circumstances.
True
336
Bribery is punished by a fine or imprisonment or both.
True
337
If a director is found guilty of fraudulent trading, will he automatically be disqualified from acting as a director?
No - he faces the possibility of disqualification.
338
Who can file for bankruptcy out of... The individual debtor, any creditor of that debtor who is owed at least £750, a supervisor of an approved individual voluntary arrangement (IVA) in respect of that debtor.
All of them.
339
Do pre-emption rights apply in the allotment of equity securities not for cash? How about for an employee share scheme.
No - only for cash. No for the share scheme.
340
A, B, C, D are directors with share percentage 30, 30, 20, 20. Can A and B remove C without D approval?` If C is removed, will his removal effect a lawful termination of his service contract as financial director?
Yes - a director can be removed on passing of ordinary resolution. No - He may be entitled to sue for breach of contract as a result.
341
If a company has 20 employees and a turnover of £6.55 million and a balance sheet of £3.3 million is it a small company? Will it need an audit?
No, It satisfies the employee limit (under 50) but it doesn't satisfy the monetary limit (turnover up to £6.5 mil, balance sheet up to £3.26 mil). A small company would be exempt from audit (although 10% of its members could still require an audit) but this company doesn't qualify for an exemption.
342
In negligenc, does the court need to be satisfied that the public policy would allow a duty of care to exist?
Yes. The question of public policy is one of several tests applied, but if public policy dictates that no duty should exist, then none shall exist.
343
Arther buys garden stuff from Lady Grey as her agent. When she decides to let him go he buys a statue from the normal supplier for himself and the invoice gets sent to her. Is there still an agency relationship for this? Is lady grey bound to settle the invoice?
Yes, this is agency by estoppel, the supplier has relied on the continuing agency and she has to pay but may seek to reclaim money from Arthur.
344
Fred contracts Ginger for a Solo dancing routine. Before it starts Fred tells Ginger he has has a better offer elsewhere and will no longer need Ginger. Does this discharge the contract?
No, Ginger can still treat it as continuing and is entitled to damages.
345
Frank offers to sell Mary a lawnmower for £200. Mary asks if he will take £100 now and £100 when she gets paid. Is this... a rejection, an implied acceptance, a counter offer, a request for information.
A request for information. The offer is still capable of acceptance. Mary is just asking about payment times.
346
In the data Protection act, does the data subject have the right to take action to destroy any inaccurate data held about him?
Yes. (P.S. only entitled to compensation if suffered damages due to inaccurate data).
347
Which of these are fraud: Fraud by abuse of position, Fraud by dishonestly appropriating property belonging to another, fraud by making false representation, fraud by failing to disclose infomration.
They are all fraud except The apporpriation of property... this is more theft.
348
T/F A company may not without the authority of its articles, issue its shares at a premium.
False, A company may issue shares at a premium. No express authority is required from company articles.
349
T/F Shares can be issued at a premium not only for cash but also for consideration other than cash.
True (although there are tight rules for valuation for public companies).
350
Any provision to exclude a director from or indemnify him against liability for breach of duty or negligence is...
void. (If he didn't read contract, he may be liable for negligence, the members of the company may ratify his actions by ordinary resolution, his votes and any member connected to him must be disregarded for the purposes of ratification).
351
Richard is registering a company with share capital £100. What does he not need to submit: Application for registration, statement of guarantee, statement of proposed company officers, statement of compliance.
Statement of guarantee. This is appropriate for a company limited by guarantee only. He should submit a statement of capital and initial shareholdings instead.
352
T/F An employer will not be vicariously liably for negligence of employee if he can show he took reasonable steps to avert possibility of it.
False. Vicarious liability doesn't depend on fault or endeavors of employer.
353
What is the statutory test of reasonableness under the Unfair Contract Terms Act 1977?
Whether it is fair and reasonable, with regard to all the circumstances which were, or which ought to have been known to the parties when the contract was made.
354
In terms of dismissal on the grounds of capability or qualifications. T/F It is sufficient that the employer honestly believes on reasonable frounds that an employee is incapable of carrying out the job that he is required to do.
True. (If it relates to qualifications, these qualifications must be in the contract though)
355
Does a limited liability partnership need to have a formal partnership agreement?
No. (but it would be nice).
356
T/F When a company applies for registration, a copy of its propsed articles of association must be supplied to the registrar of companies?
False, In the event that none is provided, model articles prescribed by the Secretary of State will apply.
357
T/F A certificate of incorporation is conclusive evidence that a company is registered in accordance with the companies act 2006.
True
358
A, B and C are three directors of a company. C behaved as if he was the managing director. A and B knew that C enterred into contracts on behalf of the company. C enterred into one contract that A and B weren't happy about. What is the deal?
They are bound due to Ostensible authority. An agency by Estoppel has arisen and A and B had been content to allow C to act as managing director. C has ostensible or apparent authority to bind the company.
359
True or False, Damages for breach of contract are primarily intended to restore the injured party to the same position he was in at the time when the contract was made.
False, The same position he was in had the contract been performed.
360
A contract for the sale of land...
must be in writing.
361
If someone is released as an agent after a disagreement, what expenses can they claim out of: Expenses he has had to meet during agency, Expenses the prinicpal should have paid but the agent did, Expenses incurred in advertising principals product, remuneration for past 3 months.
All exept for the advertising. He can't claim expenses incurred while acting outside of his authority.
362
T/F/ A limited liability partnership may be put into administration.
True
363
If a partner knew a LLP would become solvent, a withdrawal made by him in the past _____ years can be claimed back.
2 Years prior to winding up.
364
What percentage of paid up shareholders can request a meeting?
5%
365
What percentage of shareholders are needed to call a meeting with a shorter notice period than 14 days?
90%
366
Within what time period must a private company give notice of its refusal to register a requested transfer of its shares?
2 months - it must also give reasons for its refusal.
367
Do Private companies need to hold AGM's?
No.
368
Lakeside Ltd proposes to offer shares to existing members in accordance with their statutory rights of pre-emption under the Companies Act 2006. What is the time period during which the offer of shares may be accepted?
21 days. Shares that are not accepted within this time period may be allotted on the same (or less favourable) terms to non-members.
369
The Data Protection Act 1998 does not cover (pick one): Facts about the data subject, expressions of opinion about the data subject, impressions of the data subject, intentions of the data controller towards the data subject.
Impressions of the data subject.
370
The legislation governing insider dealing is...
Criminal Justice Act 1993.
371
Id has worked for clair for 6.5 years. The contract says 1 month notice is required. What is sufficient notice?
Edward is entitled to not less than six weeks' notice.
372
Is being under a threat of violence reasonable defense for not havin reported money laundering?
Yes
373
Can you be convicted of tipping off if you didn't know the infomration you disclose is likely to prejudice the investigation?
No. The offence is only committed if the person knows or suspects that a report has been made and that disclosure is likely to prejudice the investigation.
374
In the absence of an express time limit, an offer is deemed to stay open for ...
A reasonable amount of time... use your judgement.
375
A business entity is registered using the name “Smith and Jones Co”. What type of business is it likely to be
Ordinary Partnership.
376
Who can enforce rights given in the articles of association?
The company and the shareholders of the company.
377
Which of the following is not a benefit of a preference share with priority rights? Dividends are paid before ordinary shares. Dividends are cumulative. Repaid capital before ordinary shares.Can share in surplus assets.
Preference shareholders cannot share in surplus assets.
378
Shares with a nominal value of £2 are currently trading for £5 a share. What prices would be a valid allotment?
Shares cannot be sold at a discount on nominal value but they can on market value. Shares can be issued at a premium. So anything from £2 above.
379
Which of these is not a way agency can arise: By holding out, ratification, indemnify, necessity.
Indemnify.
380
Lemar enters into a contract to buy some antiques from Paola. He is acting on behalf of Bertie but does not disclose this to Paola at the time of the contract. If Paola finds out later about the existence of Bertie who is liable on the contract.
All three
381
A partnership exists from...
the date that joint business activity starts.
382
If an LLP enters into a contract who is liable on the contract?
The LLP only. The LLP is a separate legal entity and as such is liable for its own debts.
383
A retiring partner is liable for contracts...
entered into before their retirement (i.e. Gabby). They are also liable for contracts entered into after their retirement if notice is not given of this.
384
Which of the following represents the process by which a private company may reduce its share capital? (Special/Ordinary Resolution with court confirmation/solvency statement)
Special resolution supported by a solvency statement
385
Smith and Jones are partners in a partnership to sell accountancy services. The partnership agreement specifically states that neither partner can sell audit services without the consent of the other partner. Smith enters into a contract to sell audit services to Mel on behalf of the firm. Will Jones be liable on this contract?
Yes as Smith is acting within his implied authority
386
Which of the following resolutions cannot be used for removal of an auditor? (Ordinary Resolution, Written resolution, Special resolution, Unanimous resolution)
Written resolution.
387
What percentage of votes is required to vary class rights?
75%
388
Jose purchased 1,000 shares in A Plc. The shares had a nominal value of £2. These shares are 40% paid up, and the company has called up another 10%. What is Jose’s maximum liability if the company was to go into liquidation today?
£1,200
389
Naseem owns a coach and Oliver has a business offering sightseeing tours. Naseem agrees with Oliver an arrangement whereby all of Oliver’s tours will use Naseem’s coach. Naseem will meet the expenses of the coach and Oliver will meet the other expenses. Revenue is to be split 30:70 between the two. While on a tour Penny suffers food poisoning due to food provided by Oliver. Who can she sue?
Oliver only, there is no agreed partnership business.
390
If the shareholders wish to remove a director what type of resolution must be used?
Ordinary resolution with special notice
391
Which of the following are not duties of an agent? Accountability, Indemnity, Liens.
Indemnity and Liens.
392
In a claim for unfair dismissal which of the following conditions must the employee prove.
That he was dismissed (nothing about a fair reason or by unfair methods!)
393
Which of the following factors is indicative of an employee rather than self employed relationship? A. Bob must follow his employers instructions as to when he performs his work. B. If Bob’s employer offers him work he is obliged to accept it. C. Bob works for more than one person
Only A and B. (Not the working for more than one person)
394
William buys a one day pass for HW gyms. In the changing room he sees a notice stating “HW gyms will not be liable for any loss or damage to customer belongings”. His bag is stolen while working out. Can HW rely on the exclusion clause?
No, it has not been incorporated
395
Angie displays a painting in her window on 1.9.X2 with the sign “For sale £500 or nearest offer”. Beryl posts a letter on 2.9.X2 stating she will pay £500. Angie receives it on 4.9.X2. When is there a contract between Beryl and Angie?
There isnt one. For a contract to exist there must be offer and acceptance. Angie sign is an invitation to treat. Beryl has made an offer which Angie has not yet accepted.
396
In a creditors voluntary liquidation who can appoint a liquidator?
The members and Creditors.
397
In relation to establishing a claim of negligence, which one of the following is incorrect? :The level of care to be shown varies with the level of seriousness of the likely consequences of breach of duty.The same level of care is owed both to adults and children. The standard of care required is that expected by the reasonable person. There must be sufficient proximity between the wrongdoer and the injured party.
The same level of care is owed both to adults and children
398
Cedric and Florence are a married couple who have recently separated. Cedric has now agreed to transfer the title of their home into Florence’s sole name if Florence pays the mortgage payments and has written to Florence to confirm this. Florence has started paying the mortgage and Cedric is refusing to transfer the title into her name. Can she enforce this agreement?
Yes as they were separated at the time of the arrangement
399
Naveem audits JB Plc. During his work he discovers that JB Plc is about to announce a large loss. He rings his brother Prash and advises him to sell his shares but does not say why. Prash does so. What offence is Prash guilty of?
None. Prash is not guilty of an offence as Naveem has not told him the inside information. Naveem appears to be guilty of encouraging others to deal.
400
Solitary Route are a boy band who have entered into a contract with SC Promotions for a series of ten concerts, however they have now advised SC promotions that due to success in America they will be unable to perform. The contract with Solitary Route states in event of a breach £100,000 per concert will be payable being the net expected lost revenue. In addition, SC entered into an agreement with a well-known chocolate brand to advertise at the concerts. These lost profits will have a value of approximately £1.5million. What damages will SC be entitled to?
£1million. The £100,000 per concert is liquidated damages and as such likely to be enforced. The £1.5million lost profits would be likely to be treated as too remote.
401
A Company Voluntary Arrangement requires the approval of the creditors and shareholders. What percentage majority of the creditors is required for approval?
75%
402
In terms of reporting internally before to a minister, the public interest disclosure act...
Recommends reporting internally first but not compulsorily.
403
Can a liquidator institute proceedings for wrongful trading and attempt to make the wrongdoer personally liable for some or all of the company debts?
Yes
404
When can a charge be avoided by a liquidator?
Fixed charged is if 6 months before insolvency. Floating charge is 12 months before insolvency.
405
What is the period of notice for an AGM?
21 days
406
A private company cannot offer its securities to...
The public
407
Only a private limited company can ...
Pass written resolutions.
408
A private limited company doesn't need to hold...
An AGM
409
If an accountant of a firm offers damaging advice, the receives could sue...
The accountant for negligence and the firm for being vicariously liable.
410
Ashley is Phyllis's agent. She contracts with Vince. Vince doens't know Ashley is agent at time but finds out later. If Vince defaults can Phyllys Sue? IF Phyllis defaults can Vince sue?
Yes to both
411
T/F Specific performance is awarded at the discretion of the court where damages would not be an adequate remedy.
True
412
T/F Specific performance is likely to be more appropriate than damages in a contract involving personal services.
False. Specific performance is unlikely to be ordered in such a case because of the difficulties in supervising compliance with the award.
413
T/F Specific performance is likely to be awarded in a contract for the sale of land.
True
414
T/F A mandatory injunction often has the same result as a specific performance but it is less common.
True
415
An amount to pay is sufficient if...
Other party agrees to pay early, first party is paid as full satisfaction. Insufficient if first party isn't paid enough and no consideration for leftover.
416
In a monopoly, for production, fixed and marginal costs will be...
Fixes costs will be high. Marginal costs will be low.P.s. Economies of Scale (not scope) provide a fixed barrier of entry.
417
In terms of the data protection act, data held by unincorporated members clubs...
Is exempt from the act, so no right of access and no right to compensation of damages.
418
The penalty for fraudulent trading is...
10 years in prison and unlimited fine.
419
Will a compulsorary wind up occure if there has been a fraud on the minority?
Not really.
420
If a secretary fails to register a charge within the prescribed period laid down by the companies act...
The charge is void against any liquidator. administrator or creditor and the charge is immediatley payable by the company.
421
A director can be removed from office...
(not by a written resolution) but by a provision of a company's articles of association if required.
422
A trading certificate is required for...
A public company, not private.
423
If a busdriver is bound by rules not to race, and he does... is he acting in the course of employment?
Yes.. .and the employer is vicariously liable.
424
What are the conditions for an exclusion contract to be considered and incorporated.
It must be integral part of contract, The person relying on the clause must not have given any misleading explanation of its effect. The clause must be put forward before or at the time the contract is entered into. If it is not signed it must be shown that the persons whose rights it restricts was made sufficiently aware of the clause at the time.
425
Is there a rebuttable presumption in commercial transactions that the necessary intention to create leagal relations does exist?
Yes
426
If Jane gives different prices for a horse to Tanya depending on competition outcomes, this is...
An offer (not an invitation to treat)
427
An offer is...
A definite promise to be bound on specific terms.
428
Can you accept an offer if you don't know about it? (Finding a criminal but not aware of reward)
No
429
If a contract is completed but slightly wrong... (Like wrong paint colour)...
Entitled to receive contract price less a sum.
430
Can you have a clause restricting liability for unsatisfactory goods?
Yes if it is reasonable under the Unfair contract terms act.
431
To claim for damages in a breach of contract the burden of proof (for showing reaosnable steps were taken to mitigate loss) is on the...
Defendant to show that the claimant failed to mitigate loss.
432
If a partner is aware of another partner doing something,, not part of the firm but allows it he is giving,
ostensible authority.
433
Usual authority is...
Authority which arises by the virtue of the office that the agent holds. (Whatever authority he has been given)
434
If you are appointed to sell goods and you use a costly advert...
This is incidental to the appointment and the eomployer is liable to pay you. Incidental authority.
435
Is the standard of care owed by zack that of a reasonable trainee doctor means...
Does he need to give the care that is expected from a trainee.
436
Someone will only be liable for damages...
That aren't too remote.
437
Is tort part of the law of negligence?
No, negligence is one part of the law of tort.
438
If someone wanted a building of a company and bought the whole company (after looking at the FS) which then made a loss. Are the accountances suable for negligence?
No since the company was being bought for the building anyway.
439
Within what timescale must a private company file its acocunts and reports after the end of the acocunting period?
5 months.
440
If someone makes their business into a company and buys most of the shares. When the company makes a loss.
The debts belong to the company.
441
Can a contract be ratified if it was made prior to incorporation documents?
No as the company didn't exist.
442
Payment of a lesser sum earlier than the date when it was due is...
sufficient. Payment need not be adequate but must be suffient (something).
443
Promoting the success of the company means the director must have regard to the relevant interests of ...
Members, creditors and employees.
444
Wrongful trading only applies when
A company is wound up.
445
Fraudulent trading can apply
before the company is wound up (criminal liability may arise).
446
Written resolutions require the same number of votes as would be required...
in a general meeting.
447
Civil liability is...
potential responsibility for payment of damages or other court-enforcement in a lawsuit, as distinguished from criminal liability, which means open to punishment for a crime.
448
What sanctions might be imposed on directors for improper loans?
Fine, imprisonment, civil liability.
449
The equity share capital of a company is...
the issued share capital excluding any part of it that carries any right to participate beyond a specified amount in a distribution of dividend or capital.
450
The amount of a company's loan capital is...
the amount of money the company has borrowed.
451
A private has ______ to give notice of refusal to register requested transfer of shares.
2 months.
452
Wether a charge is fixed or floating will depend on ...
all circumstances. not just the label applied to it.
453
The £750 thing for people to petition for bankruptcy is only for
unsecured creditors.
454
A preference is void upon liquidation if...
It was made to a connected person within 24 months and an unconnecte dperson within 6.
455
Can the department for business innovation and skills petition for compulsorary winding up if the company fails to obtain a trading certificate within 6 moths of incorporation?
No but yes within 12.
456
Who can appoint an administrator out of court?
The companny, the directors, a secured creditor with a qualifying floating charge. (Creditors can't appoint unless they have a QFC).
457
If there is no partnership agreement and profits are split unequally then...
so are losses.
458
Can a company agree to limit the auditors liability for negligence?
Yes, in the form of a liability limitaiton agreement.
459
If the defense of volenti is to be used...
somethine more than knowledge of, or consent to, risk is needed. The claimant must have shown to have waived the right to redress for a breach of duty of care owed to him.
460
Fraud of abuse of position, false representation, failing to disclose information...
are all valid types of fraud.
461
The defense of passing information in the course of employment is only relevant...
to the offence of disclosing inside information.
462
Can a secretary be guilty of fraudulent trading?
Yes - anyone who did it.
463
If a director plays little part in a business, is he guilty when another commits fraud?
no
464
Non compliance with the Data Protection Act can result in civil liability and a fine of up to...
£500,000 and sometimes imprisonment.
465
Can a registered company be a data subject?
No, only an individual.
466
On dismissal is an employer required to provide a written statement of the reasons for a dismissal?
Only if the employee requests one within 14 days of dismissal.
467
Notice of unemployment must be...
at least 1 week per year of employment (not including halves).
468
On what grounds might a tribunal reduce the amount of basic award for unfair dismissal?
Where the employee has unreaosnably refused an offer of reinstatement, where the employee has received a redundancy payment, where it is just and equitable having regard to the employee's conduct. (Not reduced when loss suffered by employee is less than nominal amount of award).
469
What is the punishment for not establishing internal systems that avoid money laundering by the Money Laundering Regulations?
An unlimited fine and 2 years imprisonment.
470
T/F The lnot interfere with the freedom of contracting parties provided the contract is not illegal
False - it may intervene to imply tems into a contract, sometimes to protect the weaker party. E.G. unfair contract terms.
471
If the agent is appointed correctly, on suing..
He effctivley drops out of the picture.
472
What is the name for a director who acts as one even though he wasn't appointed?
De facto
473
Who may applky to court for the appointment of an administrator?
COmpany, directors, creditors (with fixed or qualifying floating charge)
474
The inclusion of "CO" in a name...
Doesn't mean it is definitely a company.
475
The label attached to parties in a contract of employment...
is relvant but not critical (employer, employee)
476
A creditors meeting is called when a declaration of solvency wasn't possible. Who can appoint liquidator?
Creditors and members. (Creditors choice takes preference)
477
All charges entered into by a compay must be registered by how long after the charge is created?
21 days from the day after.
478
Can you make an application for relief due to unfairly prejudicial actions if the actions haven't happened yet ?
Yes. If the action will be unfairly prejudicial.`
479
A defense for bribery is...
If it was necessary for the proper exercise of any function of either an intelligence service or the armed forces when engaged on active service.
480
If an employer commits bribery, will his organisation be liable?
Not if they can show they tool reasonable steps to avoid it.
481
If a company buys its own shares and cancels them and puts the money in the capital redemptin reserve, does this count as part of the ocmpan's paid up share capital?
Yes. This reserve can be used to pay up new shares which are alloted to members as fully paid bonus shares.
482
Can the registrar of companies order a company to change its name?
No The secretary of state or company names adjudicator can, in certan circumstances.
483
Frustration of a contract is when a contract is made...
Illegal or impossible to perform.
484
If someone is dismissed by a drunk manager after 10 months of work, can he claim wrongful dismissal?
Yes, but not unfair constructive dismissal - he hasn't worked long enough.
485
Must a business appoint a money laundering report officer?
Yes
486
If a business doesn't implement measures required by the regulations of money laundering...
it is punishable by fine and 2 years imprisonment.
487
Is a member of an LLP an agent of the LLP and of the other members?
No, only of the LLP.
488
T/F Creditors play no part in a members voluntary liquidation?
True. If liquidation is members voluntary it is assumed the company's debts can be paid in full and a declaration of solvency has been made.
489
The declaration of solvency applicable to a members voluntary winding up must be made not more than ....
5 weeks before the resolution to wind up is passed.
490
What percentage of members of a class can apply for a cancellation of a variation of class rights?
15%
491
What percentage of the companys paid up capital with voting rights can request a general meeting.
5%
492
Walter enters a contract for Natalie against Barney (Barnie thought it was for Walter). When Walter can't pay he tells Barney it was for Natalie, who is the contract enforcable against.
Either Walter or Natalie but not both.
493
A contracts to buy a car from B. A later refuses and B finds he can sell it to C for more... What is the legal situation.
B is entitled to nominal damages only since he has been able to sell the car for greater profit. A was in breach of contract so liable to pay damages, but B is unlikely to be able to show any loss.
494
If someone offers someone else something as consideration, it is valid if...
They weren't previously entitled to it.
495
If an agreement is in writing, the parties are presumed...
to have intended that it should be legally enforceable.
496
If a contract offends public policy...
It will be void
497
A simple contract is one...
which is not required to be in any particular form
498
If a contract involving a warranty is broken in one term,
the recieving party is entitled to sue.
499
Who must keep directors remuneration report?
Public only!
500
True or false, an agency by estoppel requires a pre-existing agency relaitonship
False
501
How does a company change its name?
Special resolution, for any reason, any time. Or Secretary of State can change it if it is offensive
502
If a company winds up what part of the share is payable by a shareholder?
The nominal value. Any unpaid premium amount is a debt by the original owner of the share. Premium debt doesn't transfer
503
Can a director accept a benefit from a third party
Usually no, but he can provided the benefit cannot reasonably be regarded to give rise to a conflict of interest
504
Can directors independent judgement be restricted?
Yes if the restricting acts are done in accordance with company constitution or with an agreement entered after due consideration
505
If director is proposing to buy stock of another company which he is also director of, does he need approval from board/members in a general meeting?
Assuming there is nothing in the company's article prohibiting, then No! BUT he does need to disclose it
506
In addition to ordinary resolution with special notice, Directors can also be removed from office
Under a provision of the company's article of association... (Ex:bankrupt directors)
507
To have general meeting with notice less than 14 days
90% of shares (normal) 95% of shares (if required by the articles)
If no shares, 90% voting rights for private, 95% voting rights for public
508
Preference shares only have pre-emotion rights if..
On articles or under terms of the issue
509
One fixed charge, on floating charge, debt to employee, On liquidation what happens? Order of payment?
Floating charges crystallizes and become fixed, but in terms of payment it is still last of the three. Employee --> fixed (preferential debt) --> floating
510
When shares are redeemed by how much is share capital diminished?
When redeemed, the share is cancelled and share capital is reduced by the nominal amount of the share
511
Company may acquire it's on share to
Lawfully Reduce share capital only
512
Public company can provide financial assistance for purchase of its share
If lending money is part of ordinary business, if it's for employee share scheme and employee is NOT a director
513
Within How many days after appointment must administrator ask for statement from officers and employees? How many days do employees and officers have to respond?
7 days, 11 days to respond
514
CVA can be proposed by
Directors, administrator, liquidator, creditors. But ultimately creditors approve
515
Is CVA binding on all creditors?
No because they can appeal it
516
Administration period usually ends in one year but can be extended by..
Court, or by majority of creditors but only once
517
During administration, can a creditor enforce a fixed charge?
Yes but only with consent from administrator or court
518
To appoint a liquidator company must pass
Ordinary resolution
519
When company goes into liquidation does assets automatically vest in liquidator?
False, assets still belong to company but under liquidators control
520
T/F During bankruptcy of individual secured creditor can enforce security against the bankrupt debtor?
Yes, exception to general rule that bankrupt can't get sued or have action taken against him
521
During bankruptcy does property vest in the trustee?
Yes, occurs automatically no written contract or property transfer needed
522
Is there a minimum estate or debt amount for creditor petitioned bankruptcy?
No provisions for creditors, but if it is voluntary by the debtor and there debt is less than 40k and estate is more than 4K they are likely to be denied bankruptcy
523
Ordinary Partnership and capital deficiency
Partner have to share deficiency in the ratio of how much capital they contributed (this may be different than the ratio they agreed to share profit and losses)
524
Can a ordinary partner assign his interest to another person
Yes
525
Is a director guilty of fraudulent trading if he suspected the company wouldn't be able to pay its debt?
No, "suspicion" isn't enough to have a criminal offense
526
What happens if employer doesn't provide written statement of employment particular?
Employee can apply for declaration of rights. Employer may be liable to pay compensation to employee. NOT criminal offense
527
Does Pay for employee have to be reasonable?
No but the law requires some pay, agreed by both parties, and that is legal (above minimum wage)
528
Do all employee duty ceases when employment ceases?
No ex-employee still can't misuse confidential information
529
As-and-when required basis of work is
Contract for services/self-employee
530
If control, personal service and mutuality of obligation is present, is it only employee?
Not necessarily, these must be included but person is still subject to multiple test
531
If director knowingly breaks health and safety violations
Fine and 2 years imprisonment, company gets unlimited fine
532
If employer breaches ACAS code of practice..
Dismal is not automatically. FAILURE TO COMPLY MAY be unfair
533
How long does employee have to claim unfair dismissal?
3 months
534
Does the employee need to show he did not contribute to unfair dismissal?
No, but if he is found than his claim can get reduced
535
Non-renewal of fixed term contract is..
Unfair dismissal. Does NOT qualify for wrongful dismissal claim
536
Selection of employee for redundancy in contravention of contractual redundancy is
Wrongful dismissal (it's a type of breach!)
537
The data protection act does NOT apply to what type of organization
Unincorporated associations or clubs... NONE OF THE RULEA APPLY
538
Market based financial system
Comparatively Less relationship between banks and business than bank based
539
What is substantial property transaction?
Over 100k or 10% of net assets
540
If someone makes a false pre-contractual statement, what type of contract is it?
Voidable assuming there is no legal bar to this remedy
541
Can the law interfere with the freedom of contracting parties?
Yes to imply terms into a contract and protect the weaker party UCTA
542
If partner retires, but the others didn't inform the suppliers and he buys stuff
Contract is binding because agency by estoppel
543
If director makes transactions but late it has come to light that his appointment was defective what happens to early transactions?
Still valid
544
In absence of express provision, do preference share holder get unpaid preference dividend when company is would up?
NO
545
Does revocation have to be expressed?
No it can be implied
546
What overrides law reform act or an expressed contractual term
Express contractual term that covers the event occurred
547
To change name of private company
Need special resolution
548
Is having the word international in company name illegal?
No, but approval is required from Secretary of State
549
When is expiry day of alloted shares?
5 years of the authority being conferred
550
If company constitution doesn't state distinction between shares, what type of share is it assumes to be
Ordinary
551
Who can appoint and LPA
Secured Fixed charge holder
552
During administration, to sell a fixed charge asset
Need permission of court but proceeds go to charge holder
553
Administrator proposal is to be given to
Creditors, directors and registrar of companies
554
Do ordinary partnerships need to register under partnership act?
No, they do not need to register at all
555
If partnership becomes company, assets that belong to the partners for the business is..
Now owned by the company
556
What are cash consideration examples?
Goodwill, goods or property
557
Does notice period for termination of need to be included in prescribed particulars?
No it can be in a separate document
558
Is there an obligation to provide statement of particular?
NO
559
Does revocation have to be expressed?
No it can be implied
560
What overrides law reform act or an expressed contractual term
Express contractual term that covers the event occurred
561
To change name of private company
Need special resolution
562
Is having the word international in company name illegal?
No, but approval is required from Secretary of State
563
When is expiry day of alloted shares?
5 years of the authority being conferred
564
If company constitution doesn't state distinction between shares, what type of share is it assumes to be
Ordinary
565
Who can appoint and LPA
Secured Fixed charge holder
566
During administration, to sell a fixed charge asset
Need permission of court but proceeds go to charge holder
567
Administrator proposal is to be given to
Creditors, directors and registrar of companies
568
Do ordinary partnerships need to register under partnership act?
No, they do not need to register at all
569
If partnership becomes company, assets that belong to the partners for the business is..
Now owned by the company
570
What are cash consideration examples?
Goodwill, goods or property
571
Does notice period for termination of need to be included in prescribed particulars?
No it can be in a separate document
572
Is there an obligation to provide statement of particular?
NO
573
Accounting report for companies
Private 9 months, public 5 months
574
Can a charge be called floating even in the a sense of described term
Yes
575
If both parties agree to be floating can the charge be fixed nonetheless?
Yes, labels of the charge isn't conclusive and depends on all circumstances
576
Tory is a criminal wrong, liability, or civil wrong
Civil wrong
