FE-1 Company Law 2

Question 1

What is the process for winding up a company in Ireland under the Companies Act 2014?

Accepted Answer

Voluntary winding up (members' or creditors') or compulsory winding up by court order on specified grounds

Answer

Only the Revenue Commissioners can wind up a company

Answer

A company can only be wound up if all shareholders agree unanimously

Answer

Winding up is automatic when a company fails to file annual returns

Question 2

Under the Companies Act 2014, what is reckless trading and what are its consequences?

Accepted Answer

Carrying on the business of a company knowing it has no reasonable prospect of paying its debts, leading to personal liability for directors

Answer

Trading during a public holiday without a licence

Answer

Making risky investments with company funds

Answer

Failing to file accounts on time

Question 3

What is the significance of the company constitution under the Companies Act 2014 for an LTD company?

Accepted Answer

It is a single document that replaces the old memorandum and articles of association, setting out the company's internal rules

Answer

It is an optional document that companies may choose to adopt

Answer

It is identical to the old memorandum of association

Answer

It is filed with the Revenue Commissioners rather than the CRO

Question 4

What is the role of the Companies Registration Office (CRO) in Ireland?

Accepted Answer

To register companies, receive and publish statutory documents, and maintain a public register of company information

Answer

To investigate fraud within companies

Answer

To collect corporation tax from companies

Answer

To regulate the stock exchange

Question 5

Under Irish company law, what is a preferential creditor in a winding up?

Accepted Answer

A creditor whose debts are given priority in payment over ordinary unsecured creditors, such as employees owed wages and Revenue for certain taxes

Answer

A creditor who holds a fixed charge over company assets

Answer

A creditor who lent money to the company first

Answer

A shareholder who holds preference shares

Question 6

What is the restriction of directors under the Companies Act 2014?

Accepted Answer

A court order preventing a person from acting as a director unless the new company meets minimum capital requirements

Answer

A ban on directors holding shares in other companies

Answer

A restriction on directors' salaries

Answer

A limit on the number of companies a person can direct