SQE Business Law and Practice 2

Question 1

Which form is filed at Companies House to notify a change of registered office address?

Accepted Answer

AD01

Answer

CH01

Answer

AP01

Answer

TM01

Question 2

What is the key distinction between a fixed charge and a floating charge?

Accepted Answer

A fixed charge attaches to specific assets immediately; a floating charge hovers over a class of changing assets

Answer

A floating charge has priority over a fixed charge

Answer

A fixed charge applies only to land

Answer

A floating charge cannot be registered at Companies House

Question 3

Under the Insolvency Act 1986, what is the order of priority for distributing assets in a company liquidation?

Accepted Answer

Fixed charge holders → expenses → preferential creditors → floating charge holders → unsecured creditors → shareholders

Answer

Unsecured creditors → preferential creditors → floating charge holders → fixed charge holders → shareholders

Answer

Preferential creditors → fixed charge holders → unsecured creditors → shareholders → floating charge holders

Answer

Shareholders → directors → creditors → HMRC

Question 4

What is 'wrongful trading' under the Insolvency Act 1986?

Accepted Answer

Continuing to trade when a director knew or ought to have known there was no reasonable prospect of avoiding insolvent liquidation

Answer

Trading whilst insolvent as a matter of balance sheet

Answer

Fraudulently removing assets before liquidation

Answer

Preferring one creditor over another

Question 5

Which Companies Act 2006 duty requires directors to promote the success of the company for the benefit of its members?

Accepted Answer

Section 172

Answer

Section 174

Answer

Section 175

Answer

Section 177

Question 6

What is the definition of a 'small company' under the Companies Act 2006 (as at SQE syllabus date)?

Accepted Answer

Turnover ≤ £10.2m, balance sheet ≤ £5.1m, employees ≤ 50

Answer

Turnover ≤ £6.5m, balance sheet ≤ £3.26m, employees ≤ 50

Answer

Turnover ≤ £25m, balance sheet ≤ £12.5m, employees ≤ 250

Answer

Turnover ≤ £1m, balance sheet ≤ £500k, employees ≤ 10