SQE Business Law and Practice 1

Question 1

Under the Companies Act 2006, what is the minimum number of directors required for a private limited company?

Accepted Answer

1

Answer

Section 154(1) CA 2006 requires a private company to have at least one director, who must be a natural person.

Question 2

Which document governs the internal management of a company under the Companies Act 2006?

Accepted Answer

Articles of Association

Answer

The Articles of Association constitute the company's constitution and govern its internal management and the rights of its members.

Question 3

What is the legal effect of a company becoming insolvent on a floating charge?

Accepted Answer

The floating charge crystallises and attaches to the assets

Answer

Upon a crystallisation event such as insolvency, a floating charge converts to a fixed charge and attaches to the assets covered at that moment.

Question 4

Under the Partnership Act 1890, what is the default rule regarding sharing of profits and losses among partners?

Accepted Answer

Equally regardless of capital contribution

Answer

Section 24 PA 1890 provides that in the absence of agreement, partners share profits and losses equally, irrespective of their capital contributions.

Question 5

What type of resolution is required to change a company's articles of association?

Accepted Answer

Special resolution (75%)

Answer

Under s.21 CA 2006, a company's articles can only be amended by a special resolution passed by at least 75% of those voting.

SQE - Solicitors Qualifying Examination Practice Test