Partnerships and Employment

Question 1

Are the following statements true or false?
a) The penalty for failing to prevent bribery is a fine.

b) Bribing a public official whilst outside of the UK is an offence under the Bribery Act 2010.

Answer 1

a) True

This is an offence which is committed by commercial organisations such as companies and
partnerships. The penalty is a fine.

b) True

Question 2

Under the Limited Liability Partnerships Act 2000 certain requirements need to be met for a limited
liability partnership (LLP) to be legitimately formed.

Is the following among those requirements?

One or more persons who are associated for the purposes of carrying on a lawful
business with a view to a profit must have subscribed their names to an
incorporation document.

Answer 2

No
One would not be sufficient. The requirement is for two or more persons to subscribe their names to
the incorporation document.

Question 3

a) Are the credit control department’s opinions concerning the creditworthiness of
commercial customers covered by the Data Protection Act?

b) Would the company have to report itself to the Information Commissioner within
24 hours of any data breach?

Answer 3

a) No

The act protects individuals, not business organisations

b) No

The company would have 72 hours to report

Question 4

Alltech Ltd has made an improvement to the design of the vacuum cleaners it produces. The
improvement involves a small electronic part that fits into an otherwise standard vacuum cleaner to
increase performance. The company would like to protect the design of the new electronic part.
Which of the following methods of protection should Alltech Ltd use?

a) Registered design
b) Copyright
c) Patent
d) Design right

Answer 4

c

Patents apply to inventions and products, such as machines or parts of machines.

Question 5

Nathan is employed by Cliffford to manage the catering at a conference of the South East Police
Service in Brighton over a two-week period.
Which of the following would not constitute dismissal for the purposes of an unfair
dismissal claim?

a) If Clifford were to tell him a month in advance that he has found someone to provide the same
services more cheaply and Nathan is not required.
b) If Clifford were to send Nathan home on the third day because the vol-au-vents were uncooked.

c) If Clifford were to say that he no longer needed Nathan because fewer delegates than expected
had attended the conference.

d) If the conference were to be cancelled because a large proportion of the delegates were required
to report for duty in view of a major earthquake in Brighton.

Answer 5

d

These circumstances would frustrate the contract. Frustration of a contract does not constitute
dismissal for the purposes of unfair dismissal protection. These circumstances would frustrate the
contract. Frustration of a contract does not constitute dismissal for the purposes of unfair dismissal
protection.

Question 6

Can a court treat a trading relationship as an ordinary partnership even if it is not classified in this way by its owners?

Answer 6

Yes. There are no specific requirements to create an ordinary partnership

Question 7

If a partner of a firm pledges the credit of the firm for a purpose which has no apparent connection with the firm’s ordinary business, without authority to do so, will the partnership be bound?

Answer 7

No. This is an exception to the implied authority rule

Question 8

During retirement, does a partner remain liable for outstanding debts incurred by the partnership when they were a partner?

Answer 8

Yes, unless creditor specifically releases them

Question 9

Under what circumstances can a retiring partner become liable for debts incurred by the partnership after they retire?

Answer 9

If the third party had no notice of their retirement and knew them to be a partner before

Question 10

If an individual partner commits a tort, can the claimant choose to either sue the firm or the individual partner?

Answer 10

Yes, partners are jointly and severally liable for torts.

Partners would not be expected to be liable for torts in the periods before they joined or left - unless they appeared to be a partner

Question 11

What is the key difference between an ordinary partnership and a limited liability partnership?

Answer 11

The LLP is a separate legal entity from the partners & partners liability is limited to the capital they have contributed

Question 12

Do ordinary partnerships have to be registered at companies house?

Answer 12

No

Question 13

Do LLPs have to be registered at companies house?

Answer 13

Yes

Question 14

Do sole traders have to be registered at companies house?

Answer 14

No

Question 15

Is an LLP required to have a formal partnership agreement?

Answer 15

No, but they normally will have. In the absence of one, the provisions of the LLP Act 2000 and the LLP Regulations 2001 will apply

Question 16

How is a new member admitted to an LLP?

Answer 16

By agreement of the existing members

Question 17

If an LLP is classed as large is it subject to audit requirements in the same way that a company is?

Answer 17

Yes, but an LLP does not have to provide a director’s report

Question 18

Can the members of an LLP ever face personal liability?

Answer 18

Yes - whilst the LLP is liable for the debts and obligations of the firm’s business, members can be personally liable in cases of negligence

Question 19

Can members be disqualified in the same way that directors of companies can?

Answer 19

Yes

Question 20

If a partner leaves, would this lead to the termination of;

a) An ordinary partnership

b) An LLP

Answer 20

a) Yes, unless an agreement was in place that changed this

b) No

Question 21

Does an LLP pay corporation tax?

Answer 21

No, members pay income tax

Question 22

Is protection for whistleblowing given to

a) Employees
b) Workers generally

Is there a requirement for length of service?

Answer 22

a) Yes
b) Yes

No

Question 23

Is a whistle-blower automatically protected under PIDA 1998?

Answer 23

No, they must make;

1. A qualifying disclosure
2. In the public interest
3. To an appropriate person

Question 24

What constitutes a qualifying disclosure according to the PIDA 1998?

Answer 24

The worker has reasonable belief that

a) A criminal offence is likely to or has been committed
b) Failure to comply with legal obligations
c) Miscarriage of justice taken/will take place
d) Health and safety endangerment
e) Environmental damage
f) Concealment of the above

Question 25

Is a whistle-blower protected under PIDA 1998 if their disclosure was not made in good faith?

Answer 25

Yes, but their damages may be reduced by up to 25%

Question 26

Can an employer implement a confidentiality clause to seek a worker’s rights to make whistle blowing disclosures?

Answer 26

No - will be void

Question 27

What is the maximum penalty for fraud?

Answer 27

10 years in prison and an unlimited fine

Question 28

What 5 controls do they Cyber Essentials Scheme suggest to protect against cybercrime?

Answer 28

1. Firewalls
2. Applying secure settings
3. Access restriction
4. Protection against viruses
5. Patching

Question 29

What is the maximum penalty for fraudulent trading?

Are there any additional consequences for directors?

Answer 29

10 years in prison and an unlimited fine. Directors may be disqualified for up to 15 years

Question 30

What is the maximum penalty for insider dealing?

Answer 30

7 years in prison and an unlimited fine

Question 31

Are there any permissible defences for those accused of insider dealing?

Answer 31

a) The defendant did not expect the dealing to result in profit or the avoidance of a loss

b) The defendant reasonably believed the information was publicly available

c) The defendant would have dealt anyway, without the information

Question 32

What is the maximum penalty for bribery?

Answer 32

10 years in prison and an unlimited fine

Question 33

Are there any permissible defences for those accused of bribery or corporate failure to prevent bribery?

Answer 33

a) If related to the intelligence services or armed forces

b) If corporation can prove it had adequate procedures in place to prevent

Question 34

What are the three phases of money laundering?

Answer 34

Placing - into a legitimate business

Layering - concealing origins

Integrating - giving money the appearance of being from a legitimate source

Question 35

Are there any permissible defences for those accused of money laundering?

Answer 35

Yes;

a) A report was made to MLRO or serious organised crime agency / intention to do so / reasonable excuse as to why not

b) Person did not have reasonable training in order to detect

Question 36

Can an individual be liable for a money laundering offence if they deliberately did not make certain enquiries?

Answer 36

yes

Question 37

What is the maximum penalty for failing to implement money laundering detection measures?

Answer 37

2 years in prison and an unlimited fine - irrespective of whether money laundering has actually taken place

Question 38

Are there any specific requirements regarding the delivery of employment contracts?

Answer 38

Can be written or oral, but as a minimum a written statement must be provided to employee by first day detailing;
Names of employer and employee
Date of employment
Pay rate and dates
Hours of work
Job title
Holiday entitlement
Pension arrangements
Notice period
Disciplinary procedure details

Question 39

Does an employee have to provide a reference?

Answer 39

No, but if they do it has to be accurate

Question 40

When must an employer prepare a statement of health and safety issues?

Answer 40

When they have more than 5 employees

Question 41

What are the specific requirements for an unfair dismissal claim?

Answer 41

2Y continuous employment

Employee not based outside UK, in the police or dismissed due to unofficial strike action - unable to bring claims

Employee must make claim within 3 months of dismissal

Must be an employee not an independent contractor

Question 42

What are the specific requirements for a redundancy claim?

Answer 42

Person was an employee,
2Y of continuous employment,
Claim brought within 6 months

Employee loses right if they commit gross misconduct or if they refuse an alternative offer for suitable alternative employment

Question 43

What is the maximum penalty for non compliance with the Data Protection Act 2018?

Answer 43

A criminal conviction
Minimum of 10m euros or 2% turnover, max of 20m euros or 4% turnover

Question 44

What are data controllers obliged to do if they have a data breach?

Answer 44

Contact the information commissioner within 72 hours

Question 45

How long do data controllers have to respond to requests to stop marketing emails?

Answer 45

1 month

Question 46

What is the ‘choice of laws’?

Answer 46

When parties enter into international contracts and agree in advance which laws will apply in the event of a dispute

Question 47

a) What is the UN Convention on Contracts for the International Sale of Goods?

b) When does it apply?

Answer 47

a) A source of contract law hat parties in different countries can apply to their dealings

b) Only to the commercial sale of goods where the buyer and seller have their places of business in different states

Question 48

Name two types of unincorporated entities

Answer 48

Sole traders and ordinary partnerships

Question 49

What are the three categories of fraud

Answer 49

Fraud by false representation
Fraud by abuse of position
Fraud by failing to disclose information