Sample Exam

Question 1

Can the directors of a private limited company refuse to register a transfer of shares? Explain your answer. (2)

Answer 1

Yes - directors can decline to register a share transfer, but only where:

• (1) they are granted this power in the articles;
• (1) they provide reasons within 2 months (s.771) (1)

Question 2

Define when a person has information as an insider under s.57 of the Criminal Justice Act 1993. (2)

Answer 2

A person has information as an insider if, and only if:

• (1) they know it is inside information and
• (1) they know that they have have it, from an inside source

Question 3

All public companies are required to prepare a directors’ remuneration report? True or false (1)

Answer 3

False - only quoted companies are required.

Question 4

List the three steps a private company would need to take in order to re-register as a public company. (3)

Answer 4

• (1) pass a special resolution
• (1) deliver form RR01 (plus accompanying documents) to Companies House
• (1) comply with the minimum capital requirement

Question 5

Outline who may inspect the register of members, and explain the procedure which must be followed when an inspect request is made. (5)

Answer 5

(1) Any member of the company may inspect the register free of charge (1) and anyone else may inspect it on payment of a fee.

(1) Inspection requests should state the reason for the inspection. If this is not included it should be sought by the company.

(1) The company must either comply with the request or seek permission from the Court to refuse it. (1) Permission to refuse inspection will only be given where the request is not made for a proper purpose. (1) If the Court agrees the request is not for a proper purpose, it will make an order directing the company to refuse it.

Question 6

Explain when the Court can exercise its discretion to make an order for winding up under the “just and equitable” jurisdiction in s.122(1)(g) of the Insolvency Act 1986.

Answer 6

(1) The petition for winding up is a remedy of last resort.

(1) It will generally not be approved where an alternative remedy is available.

(1) The definition of “just and equitable” is very wide, given the Court wide discretion.

(1) Examples of situations where winding up has been deemed appropriate include where the company is set up for a fraudulent purpose, (1) where the company is deadlocked (1) or where its objects become impossible.

(1) The key importance of s.122(1)(g) is to companies which are quasi-partnerships (see e.g. Ebrahimi v Westbourne Galleries).

Question 7

Explain what a disqualification order made under s.1(1) of the Company Directors Disqualification Act 1986 is, and its potential effects. (6)

Answer 7

(1) A disqualification order is a court order, (1) which provides that for a specified period the disqualified person must not:

• (1) be a director of a company (1) or be involved in any way with the formation, promotion or management of a company, (1) unless they have the permission of the corut
• (1) act as a receiver of the company’s property, unless they have the permission of the court.
• (1) act as a receiver of the company’s property, unless they have the permission of the court
• (1) act as a company secretary
• (1) act as a insolvency practitioner