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Hi,
On the question (1) “What type of resolution is required to remove an auditor from office between general meetings of a private company?”, I incorrectly selected the option “none of the other three – private companies do not need to have auditors”. The correct answer was “ordinary with special notice”.
I was under the impression my answer was technically true even if the notice required is correct, is this incorrect?
Also, on the question (2):-
“According to English Law, the amount as yet unpaid on shares issued by a company is called a “reserve liability”. This is a liability on which one of the following?”, I selected the answer “the members” as oppose to the correct answer “the company”. I thought my answer was correct as the members (shareholders) have the liability to pay this reserve value when called upon by the company, so surely this is more of a non-distributable asset from the company’s perspective no? Could you explain more at all?And finally (3):-
“In the context of the law of contracts / law of obligations, invitations can never be accepted”. I answered False, but the correct answer shows as True.
My reasoning was an invitation being accepted if specific enough to be considered an offer, for example the newspaper article for carbolic smoke ball was OK. Or is this an exception as the invitation then is considered an offer? Either way, it’s confusing. Feels like there are a few question it’s easily to slip up on this one!1, yes, your answer is incorrect
You are correct that a private company does not need an auditor … but a private company may choose to have an auditor and, if that is the case, then the resolution to remove that auditor would be an ordinary resolution with special notice
2, it’s a peculiarity of the Companies Act but that Act specifically states that the uncalled amounts on issued shares is a reserve liability of the company
Think of the company as the aggregation of the members. So the uncalled amounts are the liability of the aggregation of the members
3, the advert in Mrs Carlill bucked the trend – yes, it was an exception. Historically adverts had always been treated as invitations. But it the situation where an advert carries the characteristics of an offer, the Courts accept that such an invitation can be accepted
OK?
Oh I don’t like the sound of that!
1. Ok – understood, but I feel the way these ACCA questions are worded is a bit tricky. I accept an auditor would need a resolution to remove private or otherwise but I Interpreted the question to be N/A not relevant as no such REQUIREMENT to have an auditor exists, therefore the requirement for a resolution didn’t exist either as it wasn’t mandatory to be in the situation to start with. To me, this is open to interpretation (but I would say that, right?)2. OK – understood, thank you.
3. I wasn’t happy about this one but I’ve had some time to think. Would it better me to think of the Newspaper advert as being an offer as to it’s nature, rather than an invitation, and therefore the answer ‘Invitations can never be accepted’ makes more sense?
Thanks for your replies! I shall continue to try to learn each little tricksy legal hurdle to avoid such mistakes.
I am not the tutor and I hope I am not seen as being disrespectful for adding the following which I believe could be potentially useful.In Carlill,certain facts such as reference to money being deposited into a bank account to settle any possible claims and specific details of use of product detailed in advertisement indicated interesting to be bound.This distinguishes the case from others such as Partridge v Crittenden. I personally did not pick this up until I had a discussion with someone with law degree.Again I wish to apologise for my intrusion on discussion.
No problem Jon … I intimated the same when I wrote “… where an advert carries the characteristics of an offer …”
You have been a tad more specific with your illustrations of “the characteristics of an offer” but it’s fair to say that we’re on the same page
Thanks for your input
And you’re now ok are you, Ezrolith (no need to reply if the answer to that is “Yes, I’m ok”)
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