Learn or revise key terms and concepts for your ACCA Corporate and Business Law (LW ENG) exam using OpenTuition interactive ACCA LW ENG Flashcards.
There are over 200 ACCA LW ENG flashcards available
An issue of shares to prevent an unwelcome takeover bid was a breach of directors’ fiduciary duties and whereas it COULD have been ratified by the members in general meeting ( like in Bamford v Bamford ), it wasn’t
My answers will be disjointed and lack professionalism
Six and a half minutes to try and think of 10 correct, relevant, markable points
“Fraudulent trading” involves establishing a company with the intention of defrauding creditors
“Wrongful trading” is when directors allow the company to continue trading without there being a realistic prospect that it will be able to avoid an insolvent liquidation in the foreseeable future
Yes, the punishment for money laundering is a prison sentence of up to 14 years and / or a fine
The three offences in money laundering are:
* laundering
* failure to report
* tipping off
* Placement
* Integration
* Layering
No, to be an offence, the information needs to be specific and not just general investment advice
No, the information should be less than 6 months old
Unpublished price-sensitive information is information about a company which is not in the public domain but which, when published, is likely to have a material affect on the market price of the company’s securities
Probably not, if he can persuade the Court that the sale was for reasons other than the avoidance of a loss
It is true if the person knew (or should have known) that the informer was an insider. If they didn’t know (or suspect) , then the person is not guilty of the offence
No, the offence of insider dealing refers to deals. It does not refer to non-dealing
No, insider dealing is a criminal offence and is punishable by a term in prison and / or fine
In an FTSE 350 company, all directors must retire each year and seek re-election (if they wish to be re-elected)
The expression “comply or explain” refers to public quoted companies which must state within the financial statements that they have complied with the Code or, if not, why not.
A whistle-blower would refer their concerns over alleged breaches of regulation / internal controls to the Audit Committee
Yes, it is a requirement of the UK Corporate Governance Code that part of the directors’ remuneration should be performance related
A person who is to be appointed as administrator must be a “qualified insolvency practitioner”
A person who is to be appointed as liquidator must be a “qualified insolvency practitioner”
A way other than liquidation by which a company could be rescued is called an Administration
Special Manager is a person appointed on application to the Court by the Official Receiver to take control of the company’s property during the liquidation process
The Official Receiver will be appointed by the Court as Provisional Liquidator in the event of the Court granting a compulsory liquidation order
The case where the Court determined that the company was a “quasi-partnership” was Ebrahimi v Westbourne Galleries
The case when the Court granted a liquidation order on the grounds that there was deadlock on the board was re Yenidji Tobacco
The Court made the order on the grounds that it was just and equitable – the sub-stratum of the company no longer existed
The Court may grant a liquidation order:
* on the grounds that it would be just and equitable
* on the grounds that the company is unable to pay its debts as they fall due
A members’ voluntary liquidation requires the directors to prepare a declaration of solvency
Yes, provided a majority of 75% vote in favour, a private company can be put into liquidation by passing a written resolution
A special resolution requiring a 75% majority voting in favour
Yes, it is true. It’s one of the six grounds for which the Court may make that compulsory liquidation order
In one word, SOLVENCY
The members! It’s called a creditors’ voluntary liquidation because the creditors are not likely going to be paid their debts in full
A members’ voluntary liquidation and a creditors’ voluntary liquidation
It’s whatever it says in the Articles
No, there is no upper age limit applied to directors of private companies
No, a director who has reached the age of 70 may continue to serve as a director of a company but, in the case of a public company, the director must seek re-election every year
No, but the director must seek re-election every year after attaining the age of 70
It is the directors’ responsibility to call / convene a general meeting of the members of a company, but they normally delegate that duty to the company secretary
A special resolution requires 14 days’ notice if it is to be validly passed
Yes, it is possible to hold an annual general meeting of a public company with only 2 days’ notice provided short notice has been approved by the holders of 100% of the votes
An annual general meeting requires a notice period of 21 days
No, a person acting in a professional capacity (auditor, legal advisor, banker) shall not be classed as a shadow director
A shadow director is defined as “a person in accordance with whose instructions the directors are accustomed to act”
No, where a private company chooses to appoint a company secretary, it is not possible for the sole director also to be the company secretary
No, a resolution to remove a director or an auditor cannot be passed as a written resolution but any other resolution may be.
Yes, but it is normal that the members will authorise the board to negotiate the level of the auditors’ remuneration
No, if a private company wishes to have an auditor, that appointee shall be appropriately qualified
No, where a private company wishes to appoint a company secretary, it is not statutorily necessary that that appointee should have any qualifications. It could be your grand-mother!
A public company MAY hold general meetings which are not annual general meetings. These are called “other general meetings”
No, full disclosure of interests in contracts and transactions of a company should be made by directors to the full board. It is not enough to disclose only to a sub-committee
No, it is a statutory duty of directors to promote the interests of the company
“Ultra vires” literally translates as “beyond the powers”
Yes, directors should act with such degree of skill, care and diligence as could reasonably be expected from a person of that age, experience and qualification
Yes, it is true that directors have a statutory duty to avoid a conflict of interest
In company law, the abbreviation CDDA stands for the Company Directors Disqualification Act
No, it is not allowable for a director who has recently declared herself to be bankrupt to continue in office as a director of a company
It is not a statutory requirement that private companies should have an annual general meeting
A public company must hold its first annual general meeting no later than 6 months after its first year end ie a maximum of 18 months after incorporation
At the first annual general meeting of a public company, all the directors must retire and (may) seek re-election
When a director is proposed to be removed from office, the director has the right to prepare “written representations of reasonable length and not defamatory in nature”
No. If a firm of auditors wishes to resign, or not seek re-election, they must deliver to the company’s registered office either a “statement of circumstances” or a “statement of no circumstances”
Yes, in every circumstance when a company wishes to change auditors the company must pass an ordinary resolution with special notice
Yes, special notice is required of an ordinary resolution to remove an auditor from office during their year of office
Yes, special notice is required of an ordinary resolution to remove a director from office
An ordinary resolution sometimes requires special notice
A simple majority – ie one more vote in favour than votes against
An ordinary resolution
No, the UK Corporate Governance Code requires that the roles of Chair and Chief Executive be split between two individuals of comparably equal strength and charisma
The minimum number of non-executive directors for a large UK public company complying with the UK Corporate Governance Code is “at least as many non-executives as executive and ideally not less than 3″
“Corporate governance” is a system whereby companies are directed and controlled
Non-executive directors
The Share Premium Account and the Capital Redemption Reserve
A company may only make distributions out of distributable profits. Distributable profits are calculated as “accumulated realised profits” less “accumulated realised losses”
No, the statement is not true. Providing the finance for a dividend is NOT an allowable use of the share premium account
Yes, “to finance the issue of fully paid bonus shares to existing members” is one of the few allowable uses of the share premium account.
Yes, “to write off preliminary and formation expenses” is one of the few allowable uses of the share premium account.
Yes, the share capital account will be credited with the nominal value of the new issue and the share premium account with the excess proceeds over nominal value
No, it is not true! There is no cash received on the event of a bonus issue!
Yes, “face value”, “par value” and “nominal value” do have the same meaning
No! In no situation is a public company allowed to issue shares for an amount less than their face value
In order that a company may reduce its share capital it requires permission within the Articles, a special resolution and also permission of the Court
In order that a company may reduce its share capital, it requires not only permission within the Articles and permission of the Court. It also requires a special resolution to be passed
In order that a company may reduce its share capital, it requires permission within the Articles, a special resolution and permission of the Court
To be valid, a charge must be registered with the Registrar of Companies within 21 days of its creation
No, the statement is not true. The one with priority is the charge which was created first, not necessarily the one which was registered first
Yes, on a liquidation, all debenture holders are paid in priority to all the members
No, on a liquidation, the FIXED charge debenture holders are paid in priority to all others.
No, this is not true. At a general meeting of the company, the debenture holders have no votes – they are creditors, not members
A floating charge does not attach to an individual asset but rather to a class of assets including current assets. The borrower is able freely to deal with the assets subject to the charge
A fixed charge attaches to an individual asset whereby the borrower is not able freely to deal with that asset
No, it is NOT necessary to be able to differentiate between loan stock and debentures in the F4 examination
$300 ie 6% * 10,000 * .50
In the event of a liquidation, preference shareholders shall be repaid their capital, in full, before the equity shareholders receive a single cent in repayment of their capital
No, called-up capital and paid-up capital are not the same thing
No, it is not true, no qualifications are necessary for a person to be appointed as a private company secretary
Yes, a public company must have an appropriately qualified company secretary
1 is the minimum number of directors required in a private company
2 is the minimum number of directors required in a public company
1 is the minimum number of members required in a private company
1 is the minimum number of members required in a public company
No, it is not necessary that a proxy be a member of the company
A proxy is appointed by a member to represent the member at a general meeting where the member is unable to attend
The detail of quorum size is specified in a company’s Articles
A quorum is the minimum number of members necessary to be present at a general meeting of a company if resolutions are to be validly passed
No, if a person’s name appears in a Register of Members, this indicates that they are a member of the company, but not necessarily a shareholder
No, a person becomes a member of a company when their name appears in the Register of Members
Yes, a person becomes a member of a company when their name appears in the Register of Members
Within 15 days
“passing off” is where a company is established with a name similar to an existing company name and in a similar business such that confusion is likely to result.
A special resolution is required if a company wishes to change the company name
“At the time someone becomes a member of a company, it is as though they have entered a contract with the company and with all the other members individually”
Yes, as illustrated by the case Dafen Tinplate v Llanelli Steel
They may only be altered if the alteration can be shown to be for the benefit of the company as a whole
750 members must vote in favour
No! Just one! I didn’t say that everyone had the same number of votes!
No! Just one! I didn’t say that everyone voted!
A majority of not less than 75% of votes in favour is required to pass a special resolution
A special resolution is required to effect an alteration to the Articles of a company
The Articles of Association consist of the internal rules that relate to the management and administration of the company
The articles of association, resolutions which affect the articles and any agreements which affect the articles
Present and former names, address (ideally home address), nationality, business occupation, date of birth
No, not true. A company may keep its register of members at the offices of the company’s registrars
The date on the certificate of incorporation is conclusive proof that that was the date the company was created
Proposed name, country of domicile of registered office, liability of members, company status (plc or ltd) , postal address of registered office
The promoter is liable personally – the company doesn’t exist and therefore has no liability
The duty to act with reasonable skill and care is an example of a fiduciary duty
The duties owed by a promoter are collectively known as fiduciary duties
A promoter is one who undertakes to form a company with reference to a given project and to set it going and who takes the necessary steps to accomplish that purpose
Yes, in a number of situations including if they give their written consent.
“R” is the Monarch of the United Kingdom
In a situation where the strict application of the concept of the veil of incorporation would lead to an injustice, the Court is prepared to lift the veil
In a situation where the strict application of the concept of the veil of incorporation would lead to an injustice, the Court is prepared to lift the veil
Lifting the veil
The concept that a company is a separate legal entity, distinct from its owners and from those who manage its affairs
Yes – but Heaven knows why!
No. One of the uses is to finance the issue of FULLY PAID bonus shares to existing members
A member’s liability in a company limited by shares is limited to the amount, if any, as yet unpaid on shares held by the member
By guarantee and by shares
By statute
By Royal charter
By registration
“llp” is the abbreviation for “limited liability partnership”
“ltd” is the abbreviation for “limited” and indicates that the company is a private company
“plc” is the abbreviation for “public limited company”
No, it is not true. An “innocent” third party can enforce the contract against the company.
No. Following incorporation, a public company must obtain a trading certificate before it may commence trading
Yes, it is always true
Yes, the date on the certificate is conclusive proof that the company exists from that date – Jubilee Cotton Mills v Lewes
No. Insanity as a ground for dissolution is a matter for the Court to decide. It’s not automatic
Yes, it’s part of the “price payable” for the benefit of limited liability
No. The acts of a partner done in the course of the firm’s business bind the firm and the partners
Yes, a joint venture is defined as “a partnership formed for a specific purpose, course of trade or voyage”
“A partnership is the relationship which subsists between two or more people carrying on business in common with a view to profit”
Yes, the Court may deem that a partnership by conduct exists where two people carry on a business in common and satisfy the definition of a partnership
Yes. Neither notice, death nor bankruptcy of the limited partner has the effect of dissolving the partnership.
Yes, it is always true.
The surviving partners can start a new partnership with immediate effect but the original partnership ceases on the death of a partner.
No!
Yes, it is true
The principle of apparent authority
Ostensible
Yes, it is true
“estopped”
Yes, for example where a person acts and is deemed to be an agent of necessity
Compensation, because in most cases the working relationship would have been irrevocably damaged
No, participation in an unofficial industrial action IS an automatically fair reason for dismissal
Yes
Yes, in cases of serious breach of contract by the employee
Unfair dismissal
Wrongful dismissal
A Summary dismissal incurs the employer in no liability if the employee has committed a serious breach of contract”
Summary dismissal is where an employer dismisses an employee without giving any notice
Constructive dismissal is where an employer changes the terms of employment of an employee to such a degree that the employee feels that they cannot continue in employment
* control test
* integration test
* economic reality test
The contracted person is an independent contractor
the contracted person is an employee
It’s true as illustrated by the case Morgan Crucible v Hill Samuel Bank
It’s false. For the defence to be successful it’s necessary to show that the injured party was a willing participant in the risky activity
To he who is willing there can be no harm
A duty of care is owed to one’s neighbours
Volenti non fit injuria
It is likely that the action would fail – the loss suffered was not entirely due to the original acts – something new intervened
A surgeon who leaves equipment inside the body of a patient is liable in negligence (res ipsa loquitur) unless they can prove non-negligence
“The thing speaks for itself”
Your legal neighbours are those people who are so directly affected by your acts that you should have had them in mind as likely to be affected when you committed those acts
A person owes a duty of care to one’s legal neighbours
The tort of negligence
All three are examples of tort
It’s false – tort is NOT a breach of contract
Mareva injunction is a freezing order applied to the assets of a suspected wrong-doer
A Specific performance
Rectification is an equitable remedy
Rescission is an equitable remedy
Injunction is an equitable remedy
Action for price is a common law remedy
Quantum meruit is a common law remedy
Damages is a common law remedy
Specific performance is an equitable remedy
“For as much as it’s worth”
Restart deck (bring all cards back)
Deck complete!
You worked through every card. Restart to revise the deck again.
ACCA LW ENG flashcards are interactive and only work on line, flashcards are NOT downloadable/printable