Question
ICC is the abbreviation for:
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Answer
International Criminal Court or International Chamber of Commerce
or click card to flip back
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ACCA LWG
LW GLO flashcards
206 cards covering key terms, models and exam language.
206 cardsACCALWG
AnswerStrategic choiceExplain the model in your own words.
QuestionWhat does the model help you decide?
Question
In the definition of a contract, the word “agreement” can be divided into
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Answer
In the definition of a contract, the word “agreement” can be divided into two distinct elements. What are those elements?
Offer and acceptanceor click card to flip back
Question
There are three essential elements of a contract. Two of them are
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Answer
There are three essential elements of a contract. Two of them are “agreement” and “intention”. What's the third element
Considerationor click card to flip back
Question
There are three essential elements of a contract. Two of them are “consideration” and “intention”
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Answer
There are three essential elements of a contract. Two of them are “consideration” and “intention”. What's the third element?
Agreementor click card to flip back
Question
Is it true that death of the offeror has the effect that the offer is no longer capable of acceptance
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Answer
Is it true that death of the offeror has the effect that the offer is no longer capable of acceptance?
No! If the offer does not involve the personality of the offeror, then it's the notification of the death which makes the offer no longer capable of acceptance (not the death itself)or click card to flip back
Question
What are liquidated damages
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Answer
What are liquidated damages?
Liquidated damages are a genuine pre-contractual estimate of damages which would be suffered in the event of a breach and the amount is written as a term of the contractor click card to flip back
Question
What sort of remedy is “specific performance”
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Answer
What sort of remedy is “specific performance”?
Specific performance is an equitable remedyor click card to flip back
Question
What sort of remedy is “damages”
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Answer
What sort of remedy is “damages”?
Damages is a common law remedyor click card to flip back
Question
What sort of remedy is “injunction”
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Answer
What sort of remedy is “injunction”?
Injunction is an equitable remedyor click card to flip back
Question
What sort of remedy is “rescission”
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Answer
What sort of remedy is “rescission”?
Rescission is an equitable remedyor click card to flip back
Question
What sort of remedy is “rectification”
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Answer
What sort of remedy is “rectification”?
Rectification is an equitable remedyor click card to flip back
Question
“Tort is an example of breach of contract” Is this statement true
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Answer
“Tort is an example of breach of contract” Is this statement true?
It's false – tort is NOT a breach of contractor click card to flip back
Question
So far as auditors are concerned, which tort is (unfortunately) most likely to affect them
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Answer
So far as auditors are concerned, which tort is (unfortunately) most likely to affect them?
The tort of negligenceor click card to flip back
Question
Is it true that an agency arrangement may be deemed by the Court to exist
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Answer
Is it true that an agency arrangement may be deemed by the Court to exist, even though the supposed principal and the supposed agent have never met nor know of each other's existence
Yes, for example where a person acts and is deemed to be an agent of necessityor click card to flip back
Question
Where a person has, historically, been allowed to act as though they were a Chief Executive
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Answer
Where a person has, historically, been allowed to act as though they were a Chief Executive Officer, the other directors would be ****** from denying that title. Complete the gap
“estopped”or click card to flip back
Question
Where a person has, historically, been allowed to act as though they were a Chief Executive Officer, the other directors would be estopped
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Answer
Where a person has, historically, been allowed to act as though they were a Chief Executive Officer, the other directors would be estopped from denying that title. Is this true?
Yes, it is trueor click card to flip back
Question
What's another word commonly used to express “apparent” as in “apparent authority”
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Answer
What's another word commonly used to express “apparent” as in “apparent authority”?
Ostensibleor click card to flip back
Question
“In some circumstances a principal may ratify the acts of an agent retrospectively”
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Answer
“In some circumstances a principal may ratify the acts of an agent retrospectively”. Is this statement true?
Yes, it is trueor click card to flip back
Question
In company law, when the Chief Executive Officer dies, the company ceases to exist
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Answer
In company law, when the Chief Executive Officer dies, the company ceases to exist until a replacement CEO is appointed. Is this statement true?
No!or click card to flip back
Question
“When a partner in a traditional partnership dies, the partnership is automatically ended”. Is this statement always true
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Answer
“When a partner in a traditional partnership dies, the partnership is automatically ended”. Is this statement always true?
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.or click card to flip back
Question
“Under the Limited Partnerships Act of 1907, the death of a limited partner does not bring about the end of the partnership”
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Answer
“Under the Limited Partnerships Act of 1907, the death of a limited partner does not bring about the end of the partnership” Is this statement true?
Yes. Neither notice, death nor bankruptcy of the limited partner has the effect of dissolving the partnership.or click card to flip back
Question
Is it possible that a partnership may be deemed by the Court to exist even though the two people involved have never spoken to each other
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Answer
Is it possible that a partnership may be deemed by the Court to exist even though the two people involved have never spoken to each other?
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 partnershipor click card to flip back
Question
Complete the following: “A partnership is the *****
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Answer
Complete the following: “A partnership is the ***** which subsists between **** or more people ****** *** business in common with a view to *****”
“A partnership is the relationship which subsists between two or more people carrying on business in common with a view to profit”or click card to flip back
Question
Is a joint venture arrangement classed as a partnership
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Answer
Is a joint venture arrangement classed as a partnership?
Yes, a joint venture is defined as “a partnership formed for a specific purpose, course of trade or voyage”or click card to flip back
Question
“The acts of a partner done in the course of the firm's business do not bind the firm.
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Answer
“The acts of a partner done in the course of the firm's business do not bind the firm. Only the individual partner is liable”
Is that statement true?
No. The acts of a partner done in the course of the firm's business bind the firm and the partners
or click card to flip back
Question
Is it necessary for a firm registered under the Limited Liability Partnerships Act 2000
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Answer
Is it necessary for a firm registered under the Limited Liability Partnerships Act 2000 to have an annual audit?
Yes, it's part of the “price payable” for the benefit of limited liabilityor click card to flip back
Question
“Insanity of a partner is an automatic ground for the dissolution of a partnership”
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Answer
“Insanity of a partner is an automatic ground for the dissolution of a partnership”. Is this statement true?
No. Insanity as a ground for dissolution is a matter for the Court to decide. It's not automaticor click card to flip back
Question
s it always true that a company exists from the date which is shown on
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Answer
Is it always true that a company exists from the date which is shown on the certificate of incorporation?
Yes, the date on the certificate is conclusive proof that the company exists from that date – Jubilee Cotton Mills v Lewesor click card to flip back
Question
Is it always true that once a company has been incorporated it has a separate legal identity
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Answer
Is it always true that once a company has been incorporated it has a separate legal identity?
Yes, it is always trueor click card to flip back
Question
Is it always true that as soon as a company has been incorporated it may commence trading
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Answer
Is it always true that as soon as a company has been incorporated it may commence trading?
No. Following incorporation, a public company must obtain a trading certificate before it may commence tradingor click card to flip back
Question
“Where a public company enters a trading contract before it has obtained a trading certificate, the contract is void”
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Answer
“Where a public company enters a trading contract before it has obtained a trading certificate, the contract is void”. Is that statement true?
No, it is not true. An “innocent” third party can enforce the contract against the company.or click card to flip back
Question
What does the abbreviation “plc” stand for
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Answer
What does the abbreviation “plc” stand for?
“plc” is the abbreviation for “public limited company”or click card to flip back
Question
What does the abbreviation “llp” stand for
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Answer
What does the abbreviation “llp” stand for?
“llp” is the abbreviation for “limited liability partnership”or click card to flip back
Question
There are three ways of incorporating a company. By “Royal charter” and by “statute” are two
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Answer
There are three ways of incorporating a company. By “Royal charter” and by “statute” are two. What is the third way?
By registrationor click card to flip back
Question
There are three ways of incorporating a company. By “Royal charter” and by “registration” are two
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Answer
There are three ways of incorporating a company. By “Royal charter” and by “registration” are two. What is the third way?
By statuteor click card to flip back
Question
In which two ways may a member's liability be limited
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Answer
In which two ways may a member's liability be limited?
By guarantee and by sharesor click card to flip back
Question
What is the limit of a member's liability in a company limited by shares
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Answer
What is the limit of a member's liability in a company limited by shares?
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 memberor click card to flip back
Question
“One of the limited uses of the share premium account is to finance the issue of partly paid bonus shares to existing members”
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Answer
“One of the limited uses of the share premium account is to finance the issue of partly paid bonus shares to existing members”. Is that statement true?
No. One of the uses is to finance the issue of FULLY PAID bonus shares to existing membersor click card to flip back
Question
Is there such a beast as an unlimited company
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Answer
Is there such a beast as an unlimited company?
Yes – but Heaven knows why!or click card to flip back
Question
In very rare cases the Courts are prepared to look to see who are the actual beneficial owners of a company.
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Answer
In very rare cases the Courts are prepared to look to see who are the actual beneficial owners of a company. This is called “Lifting *** ****” Complete the sentence
Lifting the veilor click card to flip back
Question
In a case where the plaintiff is referred to as “R”, who is “R”
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Answer
In a case where the plaintiff is referred to as “R”, who is “R”? (eg R v Clark)
“R” is the Monarch of the United Kingdomor click card to flip back
Question
Is it possible for a member to have their liability increased even in a limited liability company
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Answer
Is it possible for a member to have their liability increased even in a limited liability company?
Yes, in a number of situations including if they give their written consent.or click card to flip back
Question
Define “promoter”
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Answer
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
or click card to flip back
Question
“The duties owed by a promoter are collectively known as ***** duties”
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Answer
“The duties owed by a promoter are collectively known as ***** duties” Complete the sentence
The duties owed by a promoter are collectively known as fiduciary dutiesor click card to flip back
Question
The duty to act with reasonable skill and care is an example of what type of duty
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Answer
The duty to act with reasonable skill and care is an example of what type of duty?
The duty to act with reasonable skill and care is an example of a fiduciary dutyor click card to flip back
Question
If a promoter enters into a contract on behalf of company which has not yet received its certificate of incorporation
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Answer
If a promoter enters into a contract on behalf of company which has not yet received its certificate of incorporation, is the company liable or, in fact, is anyone liable?
The promoter is liable personally – the company doesn't exist and therefore has no liabilityor click card to flip back
Question
What matters must be disclosed in an “Application for registration” of a new company
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Answer
What matters must be disclosed in an “Application for registration” of a new company?
Proposed name, country of domicile of registered office, liability of members, company status (plc or ltd) , postal address of registered officeor click card to flip back
Question
The date on the certificate of incorporation is ***** proof that that was the date the company was created
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Answer
“The date on the certificate of incorporation is ***** proof that that was the date the company was created”. Complete the sentence
The date on the certificate of incorporation is conclusive proof that that was the date the company was createdor click card to flip back
Question
A company's Register of Members must be kept at the company's registered office
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Answer
“A company's Register of Members must be kept at the company's registered office” Is this statement always true?
No, not true. A company may keep its register of members at the offices of the company's registrarsor click card to flip back
Question
A Register of Directors shall contain what information relating to the directors
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Answer
A Register of Directors shall contain what information relating to the directors?
Present and former names, address (ideally home address), nationality, business occupation, date of birthor click card to flip back
Question
The constitution of a company is the combination of three elements.
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Answer
The constitution of a company is the combination of three elements. What are those elements?
The articles of association, resolutions which affect the articles and any agreements which affect the articlesor click card to flip back
Question
What is meant by the term “Articles of Association” of a company
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Answer
What is meant by the term “Articles of Association” of a company?
The Articles of Association consist of the internal rules that relate to the management and administration of the companyor click card to flip back
Question
What sort of resolution is required to alter the Articles
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Answer
What sort of resolution is required to alter the Articles?
A special resolution is required to effect an alteration to the Articles of a companyor click card to flip back
Question
What majority voting in favour is required to pass a special resolution
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Answer
What majority voting in favour is required to pass a special resolution?
A majority of not less than 75% of votes in favour is required to pass a special resolutionor click card to flip back
Question
In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order
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Answer
In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order to pass a special resolution?
No! Just one! I didn't say that everyone voted!or click card to flip back
Question
In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order to pass a special resolution
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Answer
In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order to pass a special resolution and all members vote?
No! Just one! I didn't say that everyone had the same number of votes!or click card to flip back
Question
There is a limitation on the alterability of a company's articles.
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Answer
There is a limitation on the alterability of a company's articles. They may only be altered if the alteration can be shown to be for the ***** of the company as a *****. Complete the sentence
They may only be altered if the alteration can be shown to be for the benefit of the company as a wholeor click card to flip back
Question
An alteration to the Articles allowing a majority to acquire compulsorily the shares of a minority has been shown not to be for the benefit
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Answer
“An alteration to the Articles allowing a majority to acquire compulsorily the shares of a minority has been shown not to be for the benefit of the company as a whole”. Is this statement true?
Yes, as illustrated by the case Dafen Tinplate v Llanelli Steelor click card to flip back
Question
At the time someone becomes a member of a company, it is as though they have entered a contract with
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Answer
“At the time someone becomes a member of a company, it is as though they have entered a contract with **** and with ****”. Complete the sentence
“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”or click card to flip back
Question
What sort of resolution is required if a company wishes to change the company name
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Answer
What sort of resolution is required if a company wishes to change the company name?
A special resolution is required if a company wishes to change the company nameor click card to flip back
Question
What is meant by the expression “passing off” in the context of company law
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Answer
What is meant by the expression “passing off” in the context of company law?
"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.or click card to flip back
Question
Within how many days must a copy of a special resolution be filed with the Registrar of Companies
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Answer
Within how many days must a copy of a special resolution be filed with the Registrar of Companies after being passed at a general meeting of a company?
Within 15 daysor click card to flip back
Question
A person becomes a member of a company when their name appears in the Register of Members
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Answer
“A person becomes a member of a company when their name appears in the Register of Members” Is this statement true?
Yes, a person becomes a member of a company when their name appears in the Register of Membersor click card to flip back
Question
A person becomes a member of a company when they have successfully bought shares in the company
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Answer
“A person becomes a member of a company when they have successfully bought shares in the company” Is that statement true?
No, a person becomes a member of a company when their name appears in the Register of Membersor click card to flip back
Question
If a person's name appears in a Register of Members, this indicates that they are a shareholder of the company
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Answer
“If a person's name appears in a Register of Members, this indicates that they are a shareholder of the company” Is this statement true?
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 shareholderor click card to flip back
Question
What is a quorum?
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Answer
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
or click card to flip back
Question
Where is the detail of quorum size specified
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Answer
Where is the detail of quorum size specified?
The detail of quorum size is specified in a company's Articlesor click card to flip back
Question
What does the word “proxy” mean in the expression “present in person or by proxy”
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Answer
What does the word “proxy” mean in the expression “present in person or by proxy”?
A proxy is appointed by a member to represent the member at a general meeting where the member is unable to attendor click card to flip back
Question
A proxy appointed by a member of a company to represent the member's wishes must be also a member of the company
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Answer
“A proxy appointed by a member of a company to represent the member's wishes must be also a member of the company” It this statement true?
No, it is not necessary that a proxy be a member of the companyor click card to flip back
Question
What is the minimum number of members required in a public company
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Answer
What is the minimum number of members required in a public company?
1 is the minimum number of members required in a public companyor click card to flip back
Question
What is the minimum number of members required in a private company
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Answer
What is the minimum number of members required in a private company?
1 is the minimum number of members required in a private companyor click card to flip back
Question
What is the minimum number of directors required in a private company
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Answer
What is the minimum number of directors required in a private company?
1 is the minimum number of directors required in a private companyor click card to flip back
Question
A public company must have an appropriately qualified company secretary
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Answer
“A public company must have an appropriately qualified company secretary” Is this statement true?
Yes, a public company must have an appropriately qualified company secretaryor click card to flip back
Question
If a private company wishes to have a company secretary, the person appointed must be appropriately qualified
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Answer
“If a private company wishes to have a company secretary, the person appointed must be appropriately qualified” Is this statement true?
No, it is not true, no qualifications are necessary for a person to be appointed as a private company secretaryor click card to flip back
Question
Called-up capital and paid-up capital are two ways of saying the same thing
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Answer
“Called-up capital and paid-up capital are two ways of saying the same thing” Is this statement true?
No, called-up capital and paid-up capital are not the same thingor click card to flip back
Question
A preference share has that name because of its preferential entitlements over equity shares.
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Answer
A preference share has that name because of its preferential entitlements over equity shares. One preference is that it shall receive its dividend before any equity dividend is paid. What is the other?
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 capitalor click card to flip back
Question
If pre-tax profit is $40,000, post-tax profit is $36,000
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Answer
If pre-tax profit is $40,000, post-tax profit is $36,000, and there are 10,000 50 cent 6% preference shares in issue, how much is the preference share dividend for the year?
$300 ie 6% * 10,000 * .50or click card to flip back
Question
For the purposes of the F4 examination, it is important to know the difference between “loan stock” and “debentures”
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Answer
For the purposes of the F4 examination, it is important to know the difference between “loan stock” and “debentures”. Is this statement true?
No, it is NOT necessary to be able to differentiate between loan stock and debentures in the F4 examinationor click card to flip back
Question
A debenture may be secured by way of a fixed charge. What characterises a fixed charge as compared with a floating charge
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Answer
A debenture may be secured by way of a fixed charge. What characterises a fixed charge as compared with a floating charge?
A fixed charge attaches to an individual asset whereby the borrower is not able freely to deal with that assetor click card to flip back
Question
At a general meeting of the company, the debenture holders' votes are counted before those of the equity shareholders
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Answer
“At a general meeting of the company, the debenture holders' votes are counted before those of the equity shareholders” Is this statement true?
No, this is not true. At a general meeting of the company, the debenture holders have no votes – they are creditors, not membersor click card to flip back
Question
On a liquidation, the floating charge debenture holders are paid in priority to all others
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Answer
“On a liquidation, the floating charge debenture holders are paid in priority to all others. Their claim “floats” to the top of those people who are owed by the company” Is this statement true?
No, on a liquidation, the FIXED charge debenture holders are paid in priority to all others.or click card to flip back
Question
On a liquidation, all debenture holders are paid in priority to the members.
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Answer
“On a liquidation, all debenture holders are paid in priority to the members.” Is this statement true?
Yes, on a liquidation, all debenture holders are paid in priority to all the membersor click card to flip back
Question
In the event that there are two similar charges on the same asset, the charge which is registered first has priority over the one registered second
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Answer
“In the event that there are two similar charges on the same asset, the charge which is registered first has priority over the one registered second” Is this statement true?
No, the statement is not true. The one with priority is the charge which was created first, not necessarily the one which was registered firstor click card to flip back
Question
To be valid, a charge must be registered with the Registrar of Companies within how many days of its creation
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Answer
To be valid, a charge must be registered with the Registrar of Companies within how many days of its creation?
To be valid, a charge must be registered with the Registrar of Companies within 21 days of its creationor click card to flip back
Question
In order that a company may reduce its share capital, it requires three authorities
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Answer
In order that a company may reduce its share capital, it requires three authorities. What are they?
In order that a company may reduce its share capital, it requires permission within the Articles, a special resolution and permission of the Courtor click card to flip back
Question
In order that a company may reduce its share capital it requires permission within the Articles and permission from the Court.
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Answer
In order that a company may reduce its share capital it requires permission within the Articles and permission from the Court. It also needs a third authority. What is it?
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 passedor click card to flip back
Question
In order that a company may reduce its share capital it requires permission within the Articles and a special resolution.
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Answer
In order that a company may reduce its share capital it requires permission within the Articles and a special resolution. It also needs a third authority. What is it?
In order that a company may reduce its share capital it requires permission within the Articles, a special resolution and also permission of the Courtor click card to flip back
Question
In every situation when a company issues shares for an amount lower than their face value, the company shall first of all get the permission of the Court
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Answer
“In every situation when a public company issues shares for an amount lower than their face value, the company shall first of all get the permission of the Court” Is this statement true?
No! In no situation is a public company allowed to issue shares for an amount less than their face valueor click card to flip back
Question
In the context of shares in a company, the expressions “face value”, “par value” and “nominal value” mean the same
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Answer
“In the context of shares in a company, the expressions “face value”, “par value” and “nominal value” mean the same.” Is this statement true?
Yes, “face value”, “par value” and “nominal value” do have the same meaningor click card to flip back
Question
The entry to balance the cash received on the event of a bonus issue of shares is to a combination of the share capital account and the share premium account
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Answer
“The entry to balance the cash received on the event of a bonus issue of shares is to a combination of the share capital account and the share premium account” Is this statement true?
No, it is not true! There is no cash received on the event of a bonus issue!or click card to flip back
Question
The entry to balance the cash received on the event of a rights issue of shares is to a combination of the share capital account and the share premium account
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Answer
“The entry to balance the cash received on the event of a rights issue of shares is to a combination of the share capital account and the share premium account” Is this statement true?
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 valueor click card to flip back
Question
To write off preliminary and formation expenses” is one of the few allowable uses of the share premium account.
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Answer
“To write off preliminary and formation expenses” is one of the few allowable uses of the share premium account. Is this statement true?
Yes, “to write off preliminary and formation expenses” is one of the few allowable uses of the share premium account.or click card to flip back
Question
To finance the issue of fully paid bonus shares to existing members” is one of the few allowable uses of the share premium account
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Answer
“To finance the issue of fully paid bonus shares to existing members” is one of the few allowable uses of the share premium account. Is this statement true?
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.or click card to flip back
Question
To provide for the dividend payable on the 6% redeemable preference shares is one of the few allowable uses of the share premium account.
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Answer
“To provide for the dividend payable on the 6% redeemable preference shares is one of the few allowable uses of the share premium account.” Is this statement true?
No, the statement is not true. Providing the finance for a dividend is NOT an allowable use of the share premium accountor click card to flip back
Question
A company may only make distributions out of ***
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Answer
“A company may only make distributions out of *** ***. *** *** are calculated as “*** *** ***” less “*** *** ***” Complete the sentences
A company may only make distributions out of distributable profits. Distributable profits are calculated as “accumulated realised profits” less “accumulated realised losses”or click card to flip back
Question
There are two statutory capital undistributable reserves.
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Answer
There are two statutory capital undistributable reserves. What are they?
The Share Premium Account and the Capital Redemption Reserveor click card to flip back
Question
What are Neds?
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Answer
Non-executive directors
or click card to flip back
Question
How is “corporate governance” defined
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Answer
How is “corporate governance” defined?
“Corporate governance” is a system whereby companies are directed and controlledor click card to flip back
Question
In a company which complies with the UK Corporate Governance Code, it is in compliance when the role of Chair and that of Chief Executive
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Answer
“In a company which complies with the UK Corporate Governance Code, it is in compliance when the role of Chair and that of Chief Executive are held by the same person” Is this statement true?
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 charismaor click card to flip back
Question
What sort of resolution is required to be passed by a company in the event that a director should be removed from office
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Answer
What sort of resolution is required to be passed by a company in the event that a director should be removed from office?
An ordinary resolutionor click card to flip back
Question
An ordinary resolution requires what size of majority voting in favour
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Answer
An ordinary resolution requires what size of majority voting in favour?
A simple majority – ie one more vote in favour than votes againstor click card to flip back
Question
Special notice is sometimes required for what type of resolution in a company's general meeting
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Answer
Special notice is sometimes required for what type of resolution in a company's general meeting?
An ordinary resolution sometimes requires special noticeor click card to flip back
Question
Special notice is required of an ordinary resolution in the event that a director is to be removed from office
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Answer
“Special notice is required of an ordinary resolution in the event that a director is to be removed from office” Is this statement true?
Yes, special notice is required of an ordinary resolution to remove a director from officeor click card to flip back
Question
Whenever a company wishes to change auditors, they must pass an ordinary resolution with special notice
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Answer
“Whenever a company wishes to change auditors, they must pass an ordinary resolution with special notice” Is this statement true?
Yes, in every circumstance when a company wishes to change auditors the company must pass an ordinary resolution with special noticeor click card to flip back
Question
If a firm of auditors wishes to resign, or not seek re-election, they must deliver to the company's registered office a “statement of circumstances
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Answer
If a firm of auditors wishes to resign, or not seek re-election, they must deliver to the company's registered office a “statement of circumstances” Is this statement true?
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”or click card to flip back
Question
When a director is proposed to be removed from office, the director has the right to prepare “written
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Answer
When a director is proposed to be removed from office, the director has the right to prepare “written **** of ***** *****” Complete the sentence
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”or click card to flip back
Question
At the first annual general meeting of a public company, what proportion of the directors must retire and (may)
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Answer
At the first annual general meeting of a public company, what proportion of the directors must retire and (may) seek re-election
At the first annual general meeting of a public company, all the directors must retire and (may) seek re-electionor click card to flip back
Question
A public company must hold its first annual general meeting no later than how many months after incorporation
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Answer
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
or click card to flip back
Question
Within how many months after incorporation must a private company hold its first annual general meeting after incorporation
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Answer
Within how many months after incorporation must a private company hold its first annual general meeting?
It is not a statutory requirement that private companies should have an annual general meetingor click card to flip back
Question
Is it allowable for a director who has recently declared herself to be bankrupt to continue in office
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Answer
Is it allowable for a director who has recently declared herself to be bankrupt to continue in office as a director of a company?
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 companyor click card to flip back
Question
In company law, what does the abbreviation CDDA mean
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Answer
In company law, what does the abbreviation CDDA mean?
In company law, the abbreviation CDDA stands for the Company Directors Disqualification Actor click card to flip back
Question
Is it true that directors have a statutory duty to avoid a conflict of interest
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Answer
Is it true that directors have a statutory duty to avoid a conflict of interest?
Yes, it is true that directors have a statutory duty to avoid a conflict of interestor click card to flip back
Question
Directors should act with such degree of skill, care and diligence as could reasonably be expected from a person of that age
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Answer
“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” Is this statement true?
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 qualificationor click card to flip back
Question
In company law what is the literal translation of “ultra vires” in the context of directors' actions
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Answer
“Ultra vires” literally translates as “beyond the powers”
or click card to flip back
Question
Is it reasonable for a director to claim that she could not be expected to promote the interests of the company
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Answer
Is it reasonable for a director to claim that she could not be expected to promote the interests of the company?
No, it is a statutory duty of directors to promote the interests of the companyor click card to flip back
Question
Full disclosure of interests in contracts and transactions of a company should be made by directors to a sub-committee of the board at the earliest opportunity
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Answer
“Full disclosure of interests in contracts and transactions of a company should be made by directors to a sub-committee of the board at the earliest opportunity” Is this statement true?
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-committeeor click card to flip back
Question
A public company must hold an annual general meeting every calendar year.
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Answer
A public company must hold an annual general meeting every calendar year. What other type of general meeting may a public company hold?
A public company MAY hold general meetings which are not annual general meetings. These are called “other general meetings”or click card to flip back
Question
Where a private company wishes to appoint a company secretary, that appointee should, by law, be appropriately qualified
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Answer
“Where a private company wishes to appoint a company secretary, that appointee should, by law, be appropriately qualified” Is this statement true?
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!or click card to flip back
Question
Anybody may be appointed as the auditor of a private company
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Answer
“Anybody may be appointed as the auditor of a private company” Is this statement true?
No, if a private company wishes to have an auditor, that appointee shall be appropriately qualifiedor click card to flip back
Question
It is the members' right in a general meeting to determine the level of the auditors' remuneration
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Answer
“It is the members' right in a general meeting to determine the level of the auditors' remuneration” Is this statement true?
Yes, but it is normal that the members will authorise the board to negotiate the level of the auditors' remunerationor click card to flip back
Question
In a private company, any resolution may be passed as a written resolution”
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Answer
“In a private company, any resolution may be passed as a written resolution” Is this statement true?
No, a resolution to remove a director or an auditor cannot be passed as a written resolution but any other resolution may be.or click card to flip back
Question
Where a private company chooses to appoint a company secretary, is it possible for the sole director also to be the company secretary
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Answer
Where a private company chooses to appoint a company secretary, is it possible for the sole director also to be the company secretary?
No, where a private company chooses to appoint a company secretary, it is not possible for the sole director also to be the company secretaryor click card to flip back
Question
What, by statutory definition, is a “shadow director”
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Answer
What, by statutory definition, is a “shadow director”?
A shadow director is defined as “a person in accordance with whose instructions the directors are accustomed to act”or click card to flip back
Question
Where the directors of a company always act upon the advice of their auditor
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Answer
Where the directors of a company always act upon the advice of their auditor, is it the case that the auditor would be classed as a shadow director?
No, a person acting in a professional capacity (auditor, legal advisor, banker) shall not be classed as a shadow directoror click card to flip back
Question
An annual general meeting requires a notice period of how many days
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Answer
An annual general meeting requires a notice period of how many days?
An annual general meeting requires a notice period of 21 daysor click card to flip back
Question
Is it possible to hold an annual general meeting of a public company with only 2 days' notice
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Answer
Is it possible to hold an annual general meeting of a public company with only 2 days' notice?
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 votesor click card to flip back
Question
A special resolution requires how many days' notice if it is to be validly passed
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Answer
A special resolution requires how many days' notice if it is to be validly passed?
A special resolution requires 14 days' notice if it is to be validly passedor click card to flip back
Question
Whose responsibility is it to call / convene a general meeting of the members of a company
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Answer
Whose responsibility is it to call / convene a general meeting of the members of a company?
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 secretaryor click card to flip back
Question
A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a public company
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Answer
“A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a public company” Is this statement true?
No, but the director must seek re-election every year after attaining the age of 70or click card to flip back
Question
A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a private company
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Answer
“A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a private company” Is this statement true?
No, there is no upper age limit applied to directors of private companiesor click card to flip back
Question
In the case of A Large Company plc, how many members represent a quorum at a general meeting
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Answer
In the case of A Large Company plc, how many members represent a quorum at a general meeting?
It's whatever it says in the Articlesor click card to flip back
Question
There are two types of voluntary liquidation.
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Answer
There are two types of voluntary liquidation. What are the two types?
A members' voluntary liquidation and a creditors' voluntary liquidationor click card to flip back
Question
If a members' voluntary liquidation is a voluntary action of the members, a creditors' voluntary liquidation
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Answer
If a members' voluntary liquidation is a voluntary action of the members, a creditors' voluntary liquidation is a voluntary act of which group of people
The members! It's called a creditors' voluntary liquidation because the creditors are not likely going to be paid their debts in fullor click card to flip back
Question
What is the essential and fundamental difference between a members' voluntary liquidation and a creditors' voluntary liquidation?
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Answer
In one word, SOLVENCY
or click card to flip back
Question
Is it true that the Court may, on application, direct that a public company be liquidated where the company has failed
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Answer
Is it true that the Court may, on application, direct that a public company be liquidated where the company has failed to obtain a trading certificate within 12 months of incorporation?
Yes, it is true. It's one of the six grounds for which the Court may make that compulsory liquidation orderor click card to flip back
Question
What sort of resolution is required to be passed by the members to put their company into liquidation
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Answer
What sort of resolution is required to be passed by the members to put their company into liquidation?
A special resolution requiring a 75% majority voting in favouror click card to flip back
Question
Is it possible for the members of a private company to pass a written resolution to place their company into liquidation
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Answer
Is it possible for the members of a private company to pass a written resolution to place their company into liquidation?
Yes, provided a majority of 75% vote in favour, a private company can be put into liquidation by passing a written resolutionor click card to flip back
Question
Which type of liquidation requires the directors to prepare a declaration of solvency
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Answer
Which type of liquidation requires the directors to prepare a declaration of solvency?
A members' voluntary liquidation requires the directors to prepare a declaration of solvencyor click card to flip back
Question
There are two main grounds under which the Court may grant a liquidation order.
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Answer
There are two main grounds under which the Court may grant a liquidation order. What are they?
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 dueor click card to flip back
Question
Re German Date Coffee Company is a case where the Court granted a liquidation order.
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Answer
Re German Date Coffee Company is a case where the Court granted a liquidation order. Why did the Court make that order?
The Court made the order on the grounds that it was just and equitable – the sub-stratum of the company no longer existedor click card to flip back
Question
What was the case when the Court granted a liquidation order on the grounds that there was deadlock on the board
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Answer
What was the case when the Court granted a liquidation order on the grounds that there was deadlock on the board?
The case when the Court granted a liquidation order on the grounds that there was deadlock on the board was re Yenidji Tobaccoor click card to flip back
Question
In a relatively recent case, the Court granted a compulsory liquidation order on the grounds that the company was a “quasi-partnership”
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Answer
In a relatively recent case, the Court granted a compulsory liquidation order on the grounds that the company was a “quasi-partnership” What was that case?
The case where the Court determined that the company was a “quasi-partnership” was Ebrahimi v Westbourne Galleriesor click card to flip back
Question
Where does the Official Receiver fit into company law on liquidations
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Answer
Where does the Official Receiver fit into company law on liquidations?
The Official Receiver will be appointed by the Court as Provisional Liquidator in the event of the Court granting a compulsory liquidation orderor click card to flip back
Question
What is a Special Manager
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Answer
What is a Special Manager?
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 processor click card to flip back
Question
Where a company is in financial difficulties, there may be a way other than liquidation by which a company could be rescued
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Answer
Where a company is in financial difficulties, there may be a way other than liquidation by which a company could be rescued. What is that process called?
A way other than liquidation by which a company could be rescued is called an Administrationor click card to flip back
Question
A person who is to be appointed as liquidator must hold a specific qualification.
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Answer
A person who is to be appointed as liquidator must hold a specific qualification. What is that qualification?
A person who is to be appointed as liquidator must be a “qualified insolvency practitioner”or click card to flip back
Question
A person who is to be appointed as administrator must hold a specific qualification.
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Answer
A person who is to be appointed as administrator must hold a specific qualification. What is that qualification?
A person who is to be appointed as administrator must be a “qualified insolvency practitioner”or click card to flip back
Question
It is a requirement of the UK Corporate Governance Code that directors should be remunerated in part based on their performance
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Answer
“It is a requirement of the UK Corporate Governance Code that directors should be remunerated in part based on their performance” Is this statement true?
Yes, it is a requirement of the UK Corporate Governance Code that part of the directors' remuneration should be performance relatedor click card to flip back
Question
To which body of people does a whistle-blower turn in the event that the whistle-blower has concerns over alleged breaches of regulation
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Answer
To which body of people does a whistle-blower turn in the event that the whistle-blower has concerns over alleged breaches of regulation / internal controls?
A whistle-blower would refer their concerns over alleged breaches of regulation / internal controls to the Audit Committeeor click card to flip back
Question
To what does the expression “comply or explain” refer within the UK Corporate Governance Code
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Answer
To what does the expression “comply or explain” refer within the UK Corporate Governance Code?
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.or click card to flip back
Question
In an FTSE 350 company, for what period of time are directors appointed before they must seek re-election
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Answer
In an FTSE 350 company, for what period of time are directors appointed before they must seek re-election (if they wish to be re-elected!)?
In an FTSE 350 company, all directors must retire each year and seek re-election (if they wish to be re-elected)or click card to flip back
Question
Insider dealing is a civil offence and is punishable by a fine
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Answer
“Insider dealing is a civil offence and is punishable by a fine” Is this statement true?
No, insider dealing is a criminal offence and is punishable by a term in prison and / or fineor click card to flip back
Question
It is an offence for a person who is an “insider” to use inside knowledge about
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Answer
“It is an offence for a person who is an “insider” to use inside knowledge about a company and avoid buying shares in the company where they fear the price of the company's shares will fall.” Is this statement true?
No, the offence of insider dealing refers to deals. It does not refer to non-dealingor click card to flip back
Question
A person who receives inside knowledge about a company from a director and who deals and makes a profit is guilty of the criminal offence of insider dealing
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Answer
“A person who receives inside knowledge about a company from a director and who deals and makes a profit is guilty of the criminal offence of insider dealing” Is this statement true?
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 offenceor click card to flip back
Question
If an insider in possession of unpublished price-sensitive information sells shares and avoids a loss but claims that the sale was to raise money to repay a private debt
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Answer
If an insider in possession of unpublished price-sensitive information sells shares and avoids a loss but claims that the sale was to raise money to repay a private debt, is he guilty?
Probably not, if he can persuade the Court that the sale was for reasons other than the avoidance of a lossor click card to flip back
Question
What constitutes “unpublished price-sensitive information
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Answer
What constitutes “unpublished price-sensitive information”?
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 securitiesor click card to flip back
Question
Is unpublished price-sensitive information which is greater than 6 months old really price-sensitive
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Answer
Is unpublished price-sensitive information which is greater than 6 months old really price-sensitive?
No, the information should be less than 6 months oldor click card to flip back
Question
If you were given investment advice by a director to “Get out of equities and invest in Government bonds
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Answer
If you were given investment advice by a director to “Get out of equities and invest in Government bonds”, would that qualify as passing on unpublished price- sensitive information?
No, to be an offence, the information needs to be specific and not just general investment adviceor click card to flip back
Question
Money laundering is a three step process
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Answer
Money laundering is a three step process. What are they?
* Placement * Integration * Layeringor click card to flip back
Question
There are three offences involved in the criminal offence of Money Laundering
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Answer
There are three offences involved in the criminal offence of Money Laundering. What are the three offences?
The three offences in money laundering are: * laundering * failure to report * tipping offor click card to flip back
Question
The punishment for money laundering is a prison sentence of up to 14 years and / or a fine
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Answer
“The punishment for money laundering is a prison sentence of up to 14 years and / or a fine” Is this statement true?
Yes, the punishment for money laundering is a prison sentence of up to 14 years and / or a fineor click card to flip back
Question
What is meant by the expression “wrongful trading”
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Answer
What is meant by the expression “wrongful trading”?
“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 futureor click card to flip back
Question
What is meant by “fraudulent trading”
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Answer
What is meant by “fraudulent trading”?
“Fraudulent trading” involves establishing a company with the intention of defrauding creditorsor click card to flip back
Question
How much time should I spend planning each answer in the F4 law examination
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Answer
How much time should I spend planning each answer in the F4 law examination?
Six and a half minutes to try and think of 10 correct, relevant, markable pointsor click card to flip back
Question
What happens if I fail properly to plan my answers
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Answer
What happens if I fail properly to plan my answers in the exam?
My answers will be disjointed and lack professionalismor click card to flip back
Question
Adams v Cape Industries
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Answer
Companies are separate legal entities
or click card to flip back
Question
ADT v BDO
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Answer
In tort, auditors are not liable in negligence when someone, unknown to the auditor, relies on the audit opinion to make an investment decision. However, if they rely instead on the oral opinion of the auditor, then the auditor IS potentially liable.
or click card to flip back
Question
Allen v Gold Reefs of West Africa
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Answer
The Court WILL allow an alteration to the Articles even though it may adversely affect just one individual shareholder. So long as the alteration is for the benefit of the company as a whole, the Court will allow it
or click card to flip back
Question
Ashbury Railway Carriage and Iron Co v Riche
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Answer
It doesn't matter if ALL the shareholders in a company agree to a course of action; if it is prohibited by the company's constitution then the company cannot pursue that course of action ( it is ultra vires )
or click card to flip back
Question
Bamford v Bamford
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Answer
Directors should use their powers for a “proper purpose” - shareholders ratified the allotment of new shares to defeat a takeover is valid. Even though the allotment was itself a breach of fiduciary duty, the ratification validated the allotment
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Question
Bushell v Faith
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Answer
Weighted voting rights may be written into the constitution of a company effectively preventing alteration ( 2 sisters and little brother )
or click card to flip back
Question
Caparo v Dickman
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Answer
Auditors owe their duty to the members of the client company as a whole and not to individual members
or click card to flip back
Question
re City Equitable Fire Insurance Company
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Answer
Established the fiduciary duties owed by directors to their company:- 1) must act with reasonable skill and care,
2) should devote such time as is necessary to fulfil their duties, and
3) may delegate so long as there are no grounds for believing the delegate is not capable
or click card to flip back
Question
Cook v Deeks
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Answer
A minority shareholder can sue the directors on behalf of the company to recover a profit which rightly belongs to the company but which has been diverted by the directors to themselves
or click card to flip back
Question
Dafen Tinplate v Llanelli Steel
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Answer
An alteration to the constitution of a company will only be allowed if the “individual hypothetical member of the future will be equally likely to benefit as be burdened by the alteration“ - an alteration allowing the majority to compulsorily buy out a minority was not allowed
or click card to flip back
Question
DHN v Tower Hamlets
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Answer
An example of the Court lifting the veil of incorporation – to determine the commercial reality of a group of companies
or click card to flip back
Question
Dorchester Finance Company v Stebbing
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Answer
Directors should act with such degree of skill, care and diligence as could reasonably be expected of a person of that age, experience and qualification
or click card to flip back
Question
Ebrahimi v Westbourne Galleries
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Answer
In a quasi-partnership company, where a director / quasi-partner is deprived of the right to take part in management, that is a just and equitable ground for the Court to order a compulsory liquidation
or click card to flip back
Question
Eley v Positive Government Life Assurance Company
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Answer
The constitution of a company creates a contract between the company and its members, but only in their capacity as members and not in any other capacity
or click card to flip back
Question
Erlanger v New Sombrero Phosphate Mining Company
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Answer
Promoters must disclose profits made by them in the course of promoting a company to the first INDEPENDENT board of directors
or click card to flip back
Question
Ewing v Buttercup Margarine
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Answer
An example of the tort of passing off – using a name for a company which is similar to an existing company name in a similar business such that confusion is likely to result in the minds of the public
or click card to flip back
Question
re F G Films
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Answer
An example of the Court lifting the veil of incorporation – American film company set up to take advantage of British Government's grants to British film companies
or click card to flip back
Question
Freeman & Lockyer v Buckhurst Park Properties
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Answer
Where a person is ( wrongly ) held out as a director of a company by the real directors, the real directors are estopped from denying the authority of the “wrong” director
or click card to flip back
Question
re German Date Coffee Company
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Answer
When the substratum of a company has disappeared, that is a ground for the Court to grant a compulsory liquidation order
or click card to flip back
Question
Gilford Motor Company v Horne
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Answer
An example of the Court lifting the veil of incorporation – husband sets up a sham company to get round a perfectly reasonable restrictive covenant not to compete
or click card to flip back
Question
Greenhalgh v Arderne Cinemas
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Answer
Proposed alterations to the constitution must be for the benefit of the company as a whole
or click card to flip back
Question
Hickman v Kent or Romney Marsh Sheepbreeders
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Answer
The constitution of a company acts as a contract between the company and its members. Where a constitution says that disputes are to be settled by arbitration, then the Court will refer the case to arbitration
or click card to flip back
Question
Howard Smith v Ampol Petroleum
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Answer
Directors allotting shares to prevent a takeover bid, even though acting in their minds bona fide in the interests of the company, were found to be not acting in the interests of the majority and the allotment was held to be invalid
or click card to flip back
Question
IDC v Cooley
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Answer
Directors should not take personal advantage of opportunities which “belong” to their company
or click card to flip back
Question
JEB Fasteners v Marks Bloom
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Answer
Loss suffered as a result of reliance on a negligent auditor's statement – to be successful in a claim against the auditor it is necessary to show that the whole loss suffered was CAUSED by the reliance and was not due to any other cause
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Question
Jubilee Cotton Mills v Lewes
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Answer
The date on a certificate of incorporation is CONCLUSIVE proof that that is the date the company was incorporated
or click card to flip back
Question
Panorama developments v Fidelis Furnishing Fabrics
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Answer
A company secretary has the apparent / ostensible authority to bind the company in contracts of an administrative nature
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Question
Pavlides v Jensen
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Answer
Negligence on the part of the directors is not a ground for action against them to recover profits lost through their negligence
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Question
Daniels v Daniels
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Answer
Negligence on the part of the directors resulting in a personal profit for those directors is a ground for action against them to recover profits lost through their negligence
or click card to flip back
Question
Pender v Lushington
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Answer
The constitution of a company acts as a contract binding the company to its members and its members to the company
or click card to flip back
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R v Oll
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Answer
Lifting the veil to determine the person who made the decision in a situation involving corporate manslaughter
or click card to flip back
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Rose and Frank v Crompton
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Answer
Where a contract specifies that “it shall not be subject to the jurisdiction ….” then it is specifically excluding resorting to legal action to resolve a subsequent dispute
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Question
Salomon v Salomon
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The grand-father of company law cases which confirmed the principle that a company, when properly incorporated, is a separate legal entity distinct from those who are beneficially interested in the success or failure of the company and from those who manage its affairs
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Question
Southern Foundries v Shirlaw
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Answer
A person who loses their position as a director automatically loses their position as chief executive – but compensation for breach of contract may then become payable
or click card to flip back
Question
Shuttleworth v Cox Brothers
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Answer
Where a director is defrauding the company it is allowable to amend the constitution to enable the removal of that director
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Question
Sidebottom v Kershaw Leese
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Answer
Where a director is found to be competing against the company it is allowable to amend the constitution to enable the removal of that director
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The Wagon Mound
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Answer
The extent of damages is restricted to damage which was reasonably foreseeable
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Victoria Laundry v Newman Industries
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Answer
The extent of damages is restricted to that amount which could have been reasonably foreseeable at the time of the breach
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Watteau v Fenwick
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In the context of agency, an agent who exceeds his authority may nevertheless bind the principal in contracts where the agent could be held to have ostensible / apparent authority
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re Yenidje Tobacco
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Deadlock on the board of directors is a just and equitable ground for the Court to grant a compulsory liquidation order
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re Yorkshire Woolcombers
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Illustrated the three part steps to determine whether a charge over assets was a floating charge or a fixed charge
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