ACCA F4练习题.doc

ACCA F4 Corporate and Business Law. True or false, correct the false statementsPart A1) Remedies under common law and equity are same, and are known as damages.2) Case law is a kind of judge made law and it consists of the decisions of all courts.3) Delegated legislation is completely independent legislation and not interfered by any other organs.4) An offer is a definite promise to be bound on specific terms and it cannot be made to the world at large.5) Any response to an offer will constitute acceptance.6) All exclusion clauses that are agreed by contacting parties are valid.7) Damages for breach of contract will not be award to the extent that they are considered too remote.8) The authority must be express for the contract entered into by the agent to bind the principal.9) Since the limited liability partnership is a separate legal entity it should be incorporated by registration at Companies House.10) A companys articles of association bind its members to company, the company to its members, its members to each other, and the company to third parties. 11) Shareholder and debenture holder both have same rights in management of company.12) The duties of the secretary are statutory duties provided by Company Act.13) A director must avoid any conflict of his personal interest and big shareholders interest.14) The executive director is a director who performs a management role in a company, so he is not an employee of his company.15) Dividends are payments made to shareholders out of company profits and part of capitals as a return on their investment in the company.Part B 1 To be valid and enforceable, a simple contract must be supported by consideration.2 Where the postal rule applies, acceptance will occur at the moment of posting.3 The case of Carlill v Carbolic Smoke Ball Co 1893 demonstrates that a company is a separate legal entity as distinct from its members.4 Consideration need not be adequate in value but must be sufficient in law.5 If the doctrine of promissory estoppel applies, the creditor may be estopped from suing for the balance of the original debt which he has agreed to waive. It is a commom law rule.6 Domestic agreements and business contracts are presumed to be binding unless the parties state otherwise.7 The aim of damages remedy is to place the innocent party (or claimant) in the same position as if the contract had been performed.8 The intention of damages remedy is not only compensation, but also punishment. 9 According to the principle of measure of damages, one can only claim for actual loss suffered and the claimant need not take steps to mitigate loss.10 A duty of care was not owed by the subsidiarys auditor to the holding company.11 Specific performance is the most common remedy for breach of contract in common law.12 A new partner will only be liable for debts incurred after he has become a partner and a retiring partner will be released from liability for debts as soon as he retires.13 According to Partnership Act 1890, death, bankruptcy or retirement of a partner may automatically dissolve a partnership, unless otherwise stated in the partnership agreement.14 In a limited liability partnership, there are two types of partners:general partners and limited partners.15 An ordinary resolution is necissary for a company changing from private to public.16 Public companies must have an issued share capital of at least 50,000 (50% paid up and the whole of any premium). They cannot issue shares to the public unless they are listed or quoted on the Stock Exchange. 17 As soon as a public company obtains a certificate of incorporation, they can commence trading.18 A fiduciary duty of promoters to disclose to the company any interest in transactions with the company should be to an independent Board of Directors or all existing or potential shareholders. Failure to disclose will result in contract being voidable and company will be able to sue for loss suffered or to recover promoters profits.19 Promoters will not be liable for contracts signed on behalf of a company before the date of incorporation, the contract is void.20 An ultra vires contract is void and unenforceable by either party to it. Directors are not personally liable for the contract.21 Wrongful trading is not only a civil offence but also a criminal offence. It is the ground for a disqualification order against the directors in default.22 Both shares and debentures may be issued at a premium or at a discount.23 In general, shares in ANY company (public or private) may be paid up in money or moneys worth (including goodwill and know-how). 24 Debenture is a written acknowledgment of a debt. Debentures guaranteed by floating charges take the priority in payment.25 Floating charges rank befor preferential creditors.Monomial choicePart A1) What law as following belongs to private law ( )A. Criminal law B. Administrative law C. Sale of goods act D. Environment law2) What is not advantage of legislation ( )A. Responsive to public opinion as parliament is elected at least every five years. B. It can in theory deal with any problemC. Flexibility. D. They are carefully constructed codes of law3) What is not considered as a kind of invitation to treat ( )A. Commercial advertisement B. Auction bulletin C. Goods displayed in a shop window D. Bonus advertisement4) An order to the party in breach to perform his part of the contract is called ( )A. Damages B. Injunction C. Specific performance D. Action for the price5) The loss of what the claimant would have received,if the contract had been properly performed is called ( )A. Financial loss B. Expectation loss C. Mental loss D. Actual loss6) Who is considered as an independent contractor ( )A. Director of a company B. Teacher of a school C. Insurance agent D. Bus driver7) Which is the disadvantage by incorporating the business into a private limited company? ( )A. Separate legal entity B. Members limited liability C. Offer its shares to the public whilst D. Perpetual succession8) A companys articles of association may be altered by the company by passing( ) to that effect in general meeting.A. Ordinary resolution B. Special resolution C. Written resolution D. Special notice9) A debenture holder is considered as the ( ) of a company.A. Owner B. Manager C. Supervisor D. Creditor10) What is not a companys loan capital ( )A. Permanent overdrafts at the bank B. Allotment of shares at a premium C. Unsecured loans, from other party D. Loans secured on assets from a bank11) An ordinary resolution is commonly used for companys issues, such as( )A. Issues such as change of nameB. Issues such as the removal of a directorC. Issues such as reduction of share capital D. Issues such as restriction of the objects12) What statement is true about annual general meeting ( )A. Private companies must hold an annual general meeting every year.B. AGM must be held within one month of the companys year-end.C. Every public company must hold an annual general meeting in each year. D. 14 days written notice must be given for each AGM13) What statement is true about powers of directors( )A. Powers are conferred on individual directors.B. The companys articles define the powers of directors.C. There are no certain restrictions placed on the exercise of the directors powersD. The powers of directors are same in every company.14) Public company model articles provide that a director must vacate office if( )A. Act beyond their powersB. Does not avoid conflicts of interest with company.C. Has accept benefits from third partiesD. He become bankrupt or enters into an arrangement with creditors.15) The consequences of breach of duties of directors include( )A. Will be liable for criminal liability.B. Will be removed immediately.C. Repayment of any profits made by the directorD. Stop pay directors remuneration.Part B1 In a civil case, - brings the action? A claimant (plaintiff) B prosecutor C defendant D the accused2 Breach of a warranty entitles the injured party to:(a) repudiate the contract;(b) claim rescission which would enable him to receive property transferred; (c) claim damages;(d) get appologize.3 In Caparo case, the decision is-(a) The auditors did owe a duty of care to the public potential investors and to existing shareholders increasing their stakes. The auditors duty is owed to the body of shareholders as whole. (b) The auditors did not owe a duty of care to the public potential investors nor to existing shareholders increasing their stakes. The auditors duty is owed to the body of shareholders as whole.(c) Auditors should own duty of care to the persons known to rely on their information.(d) Auditors should own duty of care to the any persons who rely on their information.4 Distributable profits are defined as-(a) Accumulated unrealised profits less accumulated realised losses.(b) Accumulated realised profits less accumulated realised losses.(c) Accumulated realised profits less accumulated unrealised losses.(d) Accumulated realised profits plus accumulated realised losses.5 Subsequent fixed charges will rank behind the floating charge if they have actual notice of -.(a) negative pledge clause(b) exemption clause(c) exclusion clause(d) disclaimer clause6 Compulsory liquidation means-.(a) winding up by members (b) winding up by creditors.(c) winding up by courts order(d) winding up by detors.7 Wrongful dismissal is a common law concept and is -.(a) a breach of contract;(b) a tort(c) both a breach of contract and a tort (d) neither a breach of contract nor a tort8 In general, employees who have been continuously employed for more than - are entitled to claim for unfair dismissal payment.(a) six month;(b) one year;(c) two years;(d) three years.9 In general, employees who have been continuously employed for more than - are entitled to claim for redundancy payment.(a) six month;(b) one year;(c) two years;(d) three years.10 A companys articles of association may be altered by the company by passing( ) to that effect in general meeting.A. Ordinary resolution B. Special resolution C. Written resolution D. Special notice. Multinomial choicePart A1) Civil law exists to regulate disputes such as: ( )A. Contract disputes B. State taxation disputesC. Debt recovery disputes D. Tort disputes2) There are various forms of delegated legislation, such as: ( )A. Statutory instruments B. Law passed by UK ParliamentC. By-laws D. Rules of procedure3) The main provisions of the Human Rights Act 1998 are: ( )A. The right to a fair trial B. The right to respect for private and family lifeC. The right to housing D. Freedom of thought, conscience and religion4) Breach of conditions allows the innocent party: ( )A. Only sue for damages B. Terminated the contract and sue for damagesC. Affirm the contract and still sue for damages but must continue with his own obligations D. Ask for mental damage compensation5) In determining the nature of the employment relationship, the court will generally applied these tests: ( )A. Control test B. Salary testC. Integration test D. Economic test6) Where unfair dismissal is shown, which remedies are available: ( )A. Redundancy payment B. ReinstatementC. Compensation D. Re-engagement7) Which are considered as having separate legal personality: ( )A. Sole trader B. PartnershipC. Limited liability partnership D. Private company8) 1890 Partnership Act provides that a partnership will be dissolved in the following circumstances ( ) A. On the death or bankruptcy of one of the partnersB. In the case of supervening illegalityC. By order of the courtD. By agreement between the partners that the partnership should be dissolved9) A companys articles of association deal mainly with matters including ( )A. The issue and transfer of shares and class rightsB. Dividends and alterations of capital structureC. The companys aims and purposeD. The convening and conduct of general meetings10) Preference shares are shares carrying one or more preferential rights, such as( )A. A prior right to receive an annual dividend of a fixed amountB. A prior voting rightC. A prior right to return of capital D. A prior right to appoint directors11) A director may leave office by removal under s 168: ( )A. By resignation B. On dissolution of the companyC. In accordance with provisions of the articles D. By disqualification12) The auditors are given certain legal rights to enable them to carry out their duties, such as( )A. A right at all times of access to the books and records of the companyB.A right to require such information and explanations from the companys officersC. A right to attend any general meetings of the company D. A right to receive notice of any written resolution proposed13) There are some specific effects of compulsory liquidation, such as( )A. The powers of the directors are terminated and they are dismissed.B. Any transfer of the companys is void unless approved by the court.C. Floating charges crystallize D. The employment of the companys staff ceases unless the liquidator retains them to carry on the business.14) A compulsory winding-up is one ordered by the court under on some grounds. The most important of these grounds are: ( )A. That the company is unable to pay its debtsB. The director is disqualified C. That it is just and equitable to wind up the company D. The auditor is removed 15) Examples of stakeholders in a company may include( ) A. Shareholders B. EmployeesC. Creditors D. AuditorsPart B 1 Delegated legislation appears in the following forms:(a) Statutory instruments & Orders in council(b) Bye-laws(c) Rules of Court(d) Professional Regulations2 In the UK the sources of law include:-(a) Case law:Common law(b) Case law:Equity(c) Statute (legislation) including delegated legislation(d) European Union Law3 Statute includes:-(a) acts of Parliament (b) delegated legislation(c) common law(d) equty4 Types of Delegated Legislation:-(a) Orders in Council(b) Bye-laws(c) Statutory instruments(d) Regulations by professional bodies5 Three essential elements in any contract are-(a) offer and acceptance(b) consideration(c) intention to create legal relations(d) genuine consent6 The valid factors for a contract are-(a) capacity (b) form (c) genuine consent (d) legality7 Acceptance -(a) is an unconditional assent to all the terms of the offer.(b) is an unconditional acceptance.(c) may only be made by the offeree and persons authorised by offeree.(d) Must be made whilst the offer is still open.8 According to Contracts (Rights of Third Parties) Act 1999, in which circumstances a third party may enforce a contract term:(a) where the contract itself expressly so provides;(b) where the term confers a benefit on the third party;(c) in other capacity;(d) in insurance case.9 According to Unfair contract terms act 1977, the following is true-(a) any clause that attepts to restrict liability for death or personal injury arising from negligence is void;(b) any clause that attepts to restrict liability for death or personal injury arising from negligence is void unless it can be shown to be reasonable;(c) any clause that attepts to restrict liability for property loss or damages arising from negligence is void unless it can be shown to be reasonable;(d) any clause that attepts to limit liability for breach of contract, where the contract is based on standard terms or conditions or where one of the parties is a consumer is void unless it can be shown to be reasonable;10 The equitable remedies for breach of contract are-(a) damages(b) specific performance(c) injunction(d) rescission11 Two important cases about the remoteness of damages are-(a) Hadley v Baxendale 1854(b) Anglia Television Ltd v Reed 1972(c) Warner Bros Pictures Inc v Nelson 1937(d) Victoria Laundry v Newman Industries 194912 The court will not make an specific performance order where-(a) damages are an adequate remedy;(b) the contract is for personal services;(c) the sale of land;(d) the sale of shares or debenture.13 About tort which of the following statement is true-(a) A tort is a civil wrong and the party wronged sues in a civil court for compensation or injunction.(b) The claimant generally suffered a loss.(c) In tort , previous contractual relationship need exist. (d) Sometimes the same event can give rise to both the liability of tort and the liability of breach of contract. 14 Uk accountancy firms have been investigating ways of limiting previous un-limited liability in the face of increasing litigation through