ACCA F4 习题详解. Provided by Academy of Professional Accounting (APA) Corporate and Business Law (CL) 公司法和商法第七讲 ACCA Lecturer: Carrie Ni

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1 Professional Accounting Education Provided by Academy of Professional Accounting (APA) ACCA F4 习题详解 Corporate and Business Law (CL) 公司法和商法第七讲 ACCA Lecturer: Carrie Ni ACCAspace 中国 ACCA 特许公认会计师教育平台 Copyright ACCAspace.com

2 Contents of Class 7 1 Revision of Part D -The formation and constitution of business organisations 2 MCQ bank -Corporations and legal personality &Company formation 2

3 Rivision Corporations and legal personality Corporations and legal personality Incorporation Legal personality Lifting the veil Company types Public vs private Salomon vs Salomon Co Consequences Common law Statute 3

4 MCQ Bank Incorporation 1.Which type of company does not have share capital? A An unlimited liability company B A public company C A company limited by guarantee 4

5 MCQ Bank Incorporation 1. Answer C 补充知识 : Types of Company Limited Liability Unlimited Liability&Partnership By Shares By Guarantee Private(Ltd) Public(Plc) 5

6 MCQ Bank Ltd VS Plc 2.How much is the minimum issued share capital of a public company? A 12,500 B 25,000 C 50,000 6

7 MCQ Bank Ltd VS Plc 2. Answer C 补充知识 : Features Ltd Plc Minimum number of directors 1 2 Minimum number of members 1 1 Minimum share capital 1 50,000 Advertise shares/debentures to public No Yes Time to hold accounting records 3 years 6 years Annual general meeting Optional Compulsory Company secretary Optional Compulsory File accounts after year-end 9 months 6 months 7

8 MCQ Bank Plc 3. Which two of the following are true regarding public companies? 1 A public company must have a minimum of two members 2 A public company must have a minimum of two directors 3 A public company cannot be an unlimited liability company 4 A public company must have 'ltd' at the end of its name A1 and 2 B 2 and 3 C 2 and 4 D 3 and 4 8

9 MCQ Bank Plc 3.Answer B A public company is required to have a minimum of one member and two directors. Public companies cannot have unlimited liability. Public company names must end with 'plc' 9

10 MCQ Bank Separate Legal Personality 4.Which of the following is an effect of a company's separate legal personality? A Members and directors of a company are protected from the force of the law B The company is liable for its own debts C Members have no liability in the event of the company being insolvent 10

11 MCQ Bank Separate Legal Personality 4. Answer B Separate legal personality means that the company is responsible for its own debts. Members and directors are not protected from the force of the law because the veil of incorporation can be lifted. Members are liable up to the amount they have contributed in share capital if the company is insolvent 11

12 MCQ Bank Separate Legal Personality 5.Which of the following statements in regards to a company's legal personality is correct? A Separate legal personality exempts members from liability if the company is liquidated B Separate legal personality only applies to private limited companies C Separate legal personality does not apply to unlimited liability companies D Separate legal personality can be ignored in certain circumstances 12

13 MCQ Bank Separate Legal Personality 5.Answer D Separate legal personality can be ignored in certain circumstances (this is known as lifting the veil of incorporation). 补充知识 : The consequences of separate legal personality for the company are as follows: 1.Members liability is limited 2.Perpetual succession arises as the company will need to be formally wound-up 3.The company itself can own property 4.The company can sue, and be sued in its own name 13

14 MCQ Bank Lifting the veil 6.In which of the following situations will the courts lift the veil of incorporation? A Where a director commits fraudulent trading B Where a member of a solvent company fails to pay the company what is outstanding on their share capital C Where an employee commits a tort in the course of their employment 14

15 MCQ Bank Lifting the veil 6.Answer A Out of all the options, the courts will only lift the veil of incorporation with regard to fraudulent trading by a director. 15

16 补充知识 Lifting the veil The common law exceptions are: (a)where a company is being used to evade legal duties (b)to recognise the alien enemy character of a company (c)to identify the controlling mind of a company in cases of corporate manslaughter (d)recognising the breakdown of a quasi-partnership relationship (e)where a group of companies is operating as a single economic entity Statute provides for the lifting of the veil in the following circumstances: (a)failing to correctly disclose the company s full name on company documents (b)fraudulent trading continuing to trade an insolvent company with intent to defraud (c)wrongful trading continuing to trade an insolvent company without taking all reasonable steps to minimise the potential losses to creditors 16

17 Rivision Company formation Company Formation Formation Promoters Statutory Books Registration Procedure Additional Rules For Plc Definition Duties Pre-incorporation Contracts Records Required 17

18 MCQ Bank Promoter 7.Which of the following describes the general duty of a promoter? A Reasonable skill and care B Competence and accuracy C Due diligence 18

19 MCQ Bank Promoter 7.Answer A The general duty of a promoter is reasonable skill and care. 19

20 MCQ Bank Pre-incorporation Contracts 8.Which of the following statements concerning pre-incorporation contracts is correct? A Pre-incorporation contracts must be ratified by the company B Pre-incorporation contracts cannot be ratified by the company C Pre-incorporation contracts can be ratified by the company if the third party agrees 20

21 MCQ Bank Pre-incorporation Contracts 8.Answer B Legally, pre-incorporation contracts cannot be ratified by the company. 21

22 MCQ Bank Pre-incorporation Contract 9.Which of the following parties is not liable on a pre-incorporation contract? A The company B The promoter C The third party 22

23 MCQ Bank Pre-incorporation Contract 9.Answer A The promoter and third party are liable on a pre-incorporation contract. The company never is. 23

24 MCQ Bank Pre-incorporation Contract 10. Which two of the following are methods that a promoter can use to avoid liability on pre-incorporation contracts? 1 Signing the pre-incorporation contract 'on behalf of the company' 2 Executing the pre-incorporation contract as a deed 3 Buying an 'off-the-shelf' company 4 Novating the contract A 1 and 2 B 1 and 3 C 2 and 3 D 3 and 4 24

25 MCQ Bank Pre-incorporation Contract 10.Answer D Buying an 'off-the-shelf' company and novating the contract are two ways that a promoter can avoid liability on a preincorporation contract. The other options will not prevent the promoter from being liable. 25

26 MCQ Bank Company Formation 11.Which of the following criteria must a public company meet before it can trade? A It must obtain a trading certificate from the Registrar of Companies B Its shares must be listed on a stock exchange C It must have appointed an auditor 26

27 MCQ Bank Company Formation 11.Answer A Before it can trade, a public company must be issued with a trading certificate from the Registrar of Companies. None of the other options are criteria for obtaining a trading certificate. 27

28 MCQ Bank Company Formation 12.The role of which of the following parties is to form a company? A Subscriber B Member C Director D Promoter 28

29 MCQ Bank Company Formation 12.Answer D The role of a promoter is to form a company. 29

30 Professional Accounting Education Provided by Academy of Professional Accounting (APA)