ACCA AS Corporate and Business Law (LW) 2

Question 1

Which of the following statements about a private company limited by shares is correct under the Companies Act 2006?

Accepted Answer

It is not required to have a company secretary

Answer

It must hold an annual general meeting every year

Answer

It must have a minimum issued share capital of £50,000

Answer

It cannot pass written resolutions

Question 2

In partnership law, under the Partnership Act 1890, which statement is correct regarding the liability of partners?

Accepted Answer

Partners are jointly and severally liable for tortious acts of the firm

Answer

Partners have limited liability for partnership debts

Answer

Partners can never be liable for the acts of other partners

Answer

A new partner automatically assumes liability for debts incurred before they joined

Question 3

What is the effect of a exclusion clause that fails the 'reasonableness test' under the Unfair Contract Terms Act 1977?

Accepted Answer

It is void and unenforceable

Answer

It remains valid but can be challenged in court

Answer

It is enforceable only between businesses

Answer

It becomes a warranty rather than a condition

Question 4

Under the Companies Act 2006, a special resolution requires what majority of votes?

Accepted Answer

At least 75% of votes cast

Answer

Simple majority (more than 50%)

Answer

At least 90% of votes cast

Answer

Unanimous agreement of all shareholders

Question 5

Which of the following correctly describes the doctrine of 'lifting the corporate veil'?

Accepted Answer

It permits courts to disregard the separate legal personality of a company in exceptional circumstances

Answer

It allows directors to avoid personal liability in all circumstances

Answer

It is a statutory right available to all creditors

Answer

It automatically applies when a company becomes insolvent

Question 6

A director's duty to exercise reasonable care, skill and diligence under s174 Companies Act 2006 is measured against which standard?

Accepted Answer

A dual objective/subjective standard — whichever is higher

Answer

A purely subjective standard based on the individual director's knowledge

Answer

A purely objective standard of a reasonably diligent person

Answer

The standard expected of a qualified accountant