R01 Legal Persons Flashcards
What are the requirements for a PLC
50k share capital, two shareholders, two directors
What are the benefits of an LTD?
The company is responsible for it’s own debts and legally the owners cannot be held liable
What is ordinary power of attorney?
One person acts as an attorney for another.
What are the two types of lasting power of attorney?
For financial decisions and Health and care
What are the three types of non-disclosure and what happens in each?
Reasonable (claim paid in full), Careless (the claim is reviewed), deliberate (the contract is void)
As joint tenants, what happens on the death of a tenant?
Each tenant owns 100% and it passes fully to the other tenant
As tenants in common, what happens on the death of a tenant?
Each person owns a set percentage of the property, which is passed on through their will
What is a free hold ownership?
Ownership of both the land and the building on top of it
What is leasehold?
When somebody owns the building but not the land . They will have to pay ground rent
What is shared ownership agreement?
When the client buys a share in the property with the remainder being bought by a housing association
What are some conditions of the help to buy scheme?
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
What are the variables for a will to be valid?
It must be in writing, it must be signed and it must be witnessed by 2x people
What is the order of events upon death of a client?
Executor lists liabilities and assets, IHT is paid, Grant of probate, Estate passed on
What happens if a client has no will, but they have a spouse and children?
Spouse inherits personal effects (cars etc). £270k and half of anything above. Children inherit the other half
What happens if somebody dies with no will and no family?
Crown takes all. Seized by Govt
What are the three members of a trust?
The settlor (put the assets in the trust), trustees (look after the assets), beneficiary (the people who get the benefit of the trust)
What is an absolute or bare trust?
Where capital is held in pre-designated percentages. Once established, it cannot be varied. Over 18s can demand the capital whenever they want
What is an interest in possession trust?
Has a life tenant (beneficiary) who is entitled to receive the income generated by the trust
What is a power of appointment trust?
The trustees can choose the beneficiaries by selecting from a group of them
What is a discretionary trust
The trustees have discretion over which beneficiary gets the money/interest
What is an express trust?
A formal trust where there is a clear intention of creating a trust (trust deed)
What is an implied trust?
When a trust is created by implied action. (Look after this for my kids)
What are three elements to make a trust valid?
The Words, subject and object must be certain within a trust
When can you end a trust?
When all beneficiaries are over 18 and have been confirmed
What is an individual voluntary arrangement?
An arrangement whereby creditors agree not to take legal action in return for an agreed level of payments (Alternative to bankruptcy)
What are the steps when setting up an Individual voluntary arrangement?
Creditors agree to the IVA, fees are added to the debt and a repayment schedule is agreed, an insolvency practitioner is appointed.
What is the main impact of an Individual voluntary arrangement (IVA)?
Credit rating is severely impacted. They cannot apply for credit and will struggle to obtain any finance.
Who is a trustee in bankruptcy?
Somebody who takes possession of a debtor’s assets and seeks to pay the creditors
In what order does a trustee in bankruptcy repay debts?
Costs of the bankruptcy, preferential debts (wages/pensions), ordinary unsecured debts
What options do companies have when they go insolvent?
Voluntary arrangements with creditors, administration (somebody tries to revive the firm) or Liquidation
What are the ways a will can be invalid?
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
What is witnessing the will called?
Attesting the will. Two people cannot benefit from the will
What is a partnership?
Two or more self employed individuals working together. Each self assessed for tax
What is a Limited Liability partnership?
LLP - Individuals assed for tax on their share of the profit. It is a legal entity in it’s own right
What tax do Limited companies and PLC pay?
Corporation tax. No capital gains or income tax
What are the ways a will can be revoked?
Marriage, physical destruction,
Derek has been declared bankrupt. When will his bankruptcy end?
After 1 year
What does the HM Treasury do?
Set public finance and economic policy.
Headed up by Chancellor
What are the responsibilities of the Bank of England?
Financial stability (quantitative easing) or Monetary stability (stable prices, confidence, interest rates)
What is the Prudential Regulation Authority made for
Responsible for Authorisation and supervision for Banks, Insurers and major investment firms. Promotes competition
What is the role of the Financial Policy Committee?
take action to reduce risks that threaten the UK financial system
What does the Monterey policy committee do
Controls interest rates
Can a trustee be a beneficiary
Yes