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R01 > R01 Legal Persons > Flashcards

R01 Legal Persons Flashcards

1
Q

What are the requirements for a PLC

A

50k share capital, two shareholders, two directors

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2
Q

What are the benefits of an LTD?

A

The company is responsible for it’s own debts and legally the owners cannot be held liable

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3
Q

What is ordinary power of attorney?

A

One person acts as an attorney for another.

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4
Q

What are the two types of lasting power of attorney?

A

For financial decisions and Health and care

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5
Q

What are the three types of non-disclosure and what happens in each?

A

Reasonable (claim paid in full), Careless (the claim is reviewed), deliberate (the contract is void)

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6
Q

As joint tenants, what happens on the death of a tenant?

A

Each tenant owns 100% and it passes fully to the other tenant

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7
Q

As tenants in common, what happens on the death of a tenant?

A

Each person owns a set percentage of the property, which is passed on through their will

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8
Q

What is a free hold ownership?

A

Ownership of both the land and the building on top of it

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9
Q

What is leasehold?

A

When somebody owns the building but not the land . They will have to pay ground rent

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10
Q

What is shared ownership agreement?

A

When the client buys a share in the property with the remainder being bought by a housing association

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11
Q

What are some conditions of the help to buy scheme?

A

The property much be a new build of up to 600k, it cannot be sublet and it must be the sole property the client owns

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12
Q

What are the variables for a will to be valid?

A

It must be in writing, it must be signed and it must be witnessed by 2x people

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13
Q

What is the order of events upon death of a client?

A

Executor lists liabilities and assets, IHT is paid, Grant of probate, Estate passed on

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14
Q

What happens if a client has no will, but they have a spouse and children?

A

Spouse inherits personal effects (cars etc). £270k and half of anything above. Children inherit the other half

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15
Q

What happens if somebody dies with no will and no family?

A

Crown takes all. Seized by Govt

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16
Q

What are the three members of a trust?

A

The settlor (put the assets in the trust), trustees (look after the assets), beneficiary (the people who get the benefit of the trust)

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17
Q

What is an absolute or bare trust?

A

Where capital is held in pre-designated percentages. Once established, it cannot be varied. Over 18s can demand the capital whenever they want

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18
Q

What is an interest in possession trust?

A

Has a life tenant (beneficiary) who is entitled to receive the income generated by the trust

19
Q

What is a power of appointment trust?

A

The trustees can choose the beneficiaries by selecting from a group of them

20
Q

What is a discretionary trust

A

The trustees have discretion over which beneficiary gets the money/interest

21
Q

What is an express trust?

A

A formal trust where there is a clear intention of creating a trust (trust deed)

22
Q

What is an implied trust?

A

When a trust is created by implied action. (Look after this for my kids)

23
Q

What are three elements to make a trust valid?

A

The Words, subject and object must be certain within a trust

24
Q

When can you end a trust?

A

When all beneficiaries are over 18 and have been confirmed

25
Q

What is an individual voluntary arrangement?

A

An arrangement whereby creditors agree not to take legal action in return for an agreed level of payments (Alternative to bankruptcy)

26
Q

What are the steps when setting up an Individual voluntary arrangement?

A

Creditors agree to the IVA, fees are added to the debt and a repayment schedule is agreed, an insolvency practitioner is appointed.

27
Q

What is the main impact of an Individual voluntary arrangement (IVA)?

A

Credit rating is severely impacted. They cannot apply for credit and will struggle to obtain any finance.

28
Q

Who is a trustee in bankruptcy?

A

Somebody who takes possession of a debtor’s assets and seeks to pay the creditors

29
Q

In what order does a trustee in bankruptcy repay debts?

A

Costs of the bankruptcy, preferential debts (wages/pensions), ordinary unsecured debts

30
Q

What options do companies have when they go insolvent?

A

Voluntary arrangements with creditors, administration (somebody tries to revive the firm) or Liquidation

31
Q

What are the ways a will can be invalid?

A

If it is not the original will
If it is not the latest version of the will
If the testator was not sound of mind/influenced

32
Q

What is witnessing the will called?

A

Attesting the will. Two people cannot benefit from the will

33
Q

What is a partnership?

A

Two or more self employed individuals working together. Each self assessed for tax

34
Q

What is a Limited Liability partnership?

A

LLP - Individuals assed for tax on their share of the profit. It is a legal entity in it’s own right

35
Q

What tax do Limited companies and PLC pay?

A

Corporation tax. No capital gains or income tax

36
Q

What are the ways a will can be revoked?

A

Marriage, physical destruction,

37
Q

Derek has been declared bankrupt. When will his bankruptcy end?

A

After 1 year

38
Q

What does the HM Treasury do?

A

Set public finance and economic policy.
Headed up by Chancellor

39
Q

What are the responsibilities of the Bank of England?

A

Financial stability (quantitative easing) or Monetary stability (stable prices, confidence, interest rates)

40
Q

What is the Prudential Regulation Authority made for

A

Responsible for Authorisation and supervision for Banks, Insurers and major investment firms. Promotes competition

41
Q

What is the role of the Financial Policy Committee?

A

take action to reduce risks that threaten the UK financial system

42
Q
A
43
Q

What does the Monterey policy committee do

A

Controls interest rates

44
Q

Can a trustee be a beneficiary

A

Yes

R01 (7 decks)

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