SQE1 Tort & Business Law 2

Question 1

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

Accepted Answer

One

Answer

Under s.154 of the Companies Act 2006, a private limited company must have at least one director. A public limited company must have at least two directors.

Question 2

What is a 'partnership' under the Partnership Act 1890?

Accepted Answer

The relation which subsists between persons carrying on a business in common with a view of profit

Answer

Under s.1(1) of the Partnership Act 1890, a partnership is 'the relation which subsists between persons carrying on a business in common with a view of profit'. It requires no formal registration and can be created informally.

Question 3

Under English law, what is the key distinction between a Limited Liability Partnership (LLP) and a traditional partnership?

Accepted Answer

An LLP is a separate legal entity with limited liability for members; a traditional partnership is not a separate legal entity and partners have unlimited personal liability

Answer

An LLP (under the Limited Liability Partnerships Act 2000) is a separate legal entity from its members, who benefit from limited liability. A traditional partnership under the Partnership Act 1890 is not a separate legal entity, and partners have unlimited joint and several liability for the firm's debts.

Question 4

What is the primary duty of a company director under s.172 of the Companies Act 2006?

Accepted Answer

To act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole

Answer

Section 172 of the Companies Act 2006 requires directors to act in the way they consider, in good faith, most likely to promote the success of the company for the benefit of its members as a whole, having regard to specified factors including long-term consequences and stakeholders.

Question 5

In the law of tort, what is the defence of 'contributory negligence'?

Accepted Answer

A partial defence that reduces the claimant's damages by the proportion they contributed to their own loss

Answer

Under the Law Reform (Contributory Negligence) Act 1945, contributory negligence is a partial defence. If the claimant contributed to their own loss by their own negligence, their damages are reduced by the proportion they were responsible for, but their claim is not defeated entirely.

SQE1 Practice Test

SQE1 Practice Test

SQE1 Tort & Business Law 2