Smith And Keenans Company Law 14th Edition Charles Wild, Stuart Weinstein - Solutions

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5 What kind of resolution is required to commence a voluntary winding-up when no declaration of solvency can be given?A Special B Extraordinary C Ordinary D Ordinary with special notice 6 When does a voluntary winding-up, whether members’ or creditors’, commence?A When the relevant resolution
4 Tees Ltd is insolvent and its directors have made a payment to one of its creditors which is designed to improve the position of that creditor in the event of a liquidation. The creditor is not connected with the company. The company is now in liquidation. The liquidator can recover the payment
3 Thames Ltd is in a creditors’ voluntary winding-up. The members and the creditors have nominated different persons as liquidators. What happens?A An application must be made to the court to decide who shall act.B The creditors’ nominee becomes liquidator but any director, member or creditor
2 The members of a solvent company may resolve to wind it up following the passing of:A An ordinary resolution after special notice.B An ordinary resolution.C An extraordinary resolution.D A special resolution.
1 A company may go into a members’ voluntary winding-up if the directors or a majority of them make a declaration to the effect that the company will be able to pay its debts in full within a period not exceeding:A One year B Six months C Two years D Three years
5 You are required to discuss the following liquidation matters.(a) An allegation by a creditor of a company during a winding-up that the directors of the company continued trading when business debts could not be met.(b) A view reached by a company liquidator that certain directors of the company
4 On the liquidation of Technix plc the assets and liabilities of the company are stated as follows:Assets £ Liabilities £Factory 350,000 Alpha plc 300,000 Finished products 70,000 Beta plc 200,000 Computer components 20,000 Delta Bank plc 20,000 Vehicle fleet 30,000 In. Rev. & employees 30,000
3 (a) What kinds of liquidation or windings-up are there and what distinguishes them from each other?(b) In what order must a liquidator distribute the assets?(c) Distinguish between fraudulent trading and wrongful trading and say what consequences may follow if a person is found guilty of either
2 Deadloss plc has gone into insolvent winding-up. The petition was presented on 1 April 2005 and the winding-up order was made on 30 May 2005. The liquidator is uncertain as to the priorities and whether the following transactions are binding on him:(a) Deadloss created a floating charge on its
1 Insolvent Ltd is in compulsory liquidation and its assets are insufficient to meet its liabilities in full.Advise the liquidator as to what action he should take in respect of the following matters:(a) Three months before the commencement of the winding-up Insolvent Ltd created a floating charge
6 Once the court has received a petition for an administration order, when can a liquidator be appointed? He may:A be appointed if the court consents.B be appointed if the creditors consent.C be appointed if the Official Receiver consents.D not be appointed.
5 A qualifying floating chargeholder is seeking to petition the court for an administration order.Which of the following statements is correct?A A QFCH cannot petition the court for an order.B A QFCH can petition but must satisfy the court that the company is unable to pay its debts.C A QFCH can
4 An administrator is taken to have adopted contracts of employment within a stated period after his employment. The period is:A 28 days B 15 days C 14 days D 21 days
3 Who can fill the office of administrator if there is a vacancy?A The court.B The creditors.C Anyone entitled to appoint an administrative receiver.D Anyone entitled to appoint an administrative receiver provided the court approves of the appointee.
2 Which of the following must be given notice of the intention to appoint an administrator out of court by the directors?A Unsecured creditors and the company.B Anyone entitled to appoint an administrative receiver.C Unsecured creditors.D Anyone entitled to appoint an administrative receiver or an
1 Bloggs Ltd has recently been made the subject of an administration order. John had previously presented a winding-up petition in regard to Bloggs. What will the effect of the administration order be on John’s winding-up petition?A It will be heard by the court.B It will be dismissed by the
6 Before incorporation of a company called Alfredo Ltd its promoter, Mostyn, made a contract on behalf of the company. Who will be liable if the contract is not performed by Alfredo Ltd?A Alfredo Ltd.B Mostyn.C The directors of Alfredo Ltd.D The shareholders of Alfredo Ltd.
5 Fred, a financier, has made a personal bid for the equity shares of Brick plc. He has acquired 92 per cent of the shares in Brick and intends to compulsorily acquire the rest. What is the legal position?A Fred will be able compulsorily to acquire the shares under the Companies Act 2006.B Fred
5 B Ltd held a general meeting including the following alterations to the articles which were duly passed:(a) ‘a member shall, upon the request of the board, transfer his shares to a person nominated by the board’;(b) ‘a director shall vacate office upon the written request of all other
4 Beefy Farm Ltd was incorporated in 2005. Its articles of association appointed Peter and Richard as directors for life. The objects clause of the company’s memorandum of association provided that the company should carry on the business of beef breeding with any other activities reasonably
3 Zed Ltd wish to acquire the undertaking of a company which is in members’ voluntary liquidation but still trading. Zed Ltd cannot afford cash for the purchase and suggest they should issue their own shares to the value required. How can this suggestion be implemented?(The Institute of Chartered
2 Write notes on TWO of the following:(a) promoters;(b) redeemable shares;(c) disqualification of directors;(d) schemes of arrangement. (The Institute of Chartered Secretaries and Administrators)
1 In order to raise additional finance Devonia Trust plc, a holding company, intends to make a rights issue. Its subsidiaries have their own classes of share capital with different voting and dividend rights. With a view to simplifying the capital structure of the group it is proposed to exchange
6 The directors of Tomos Ltd want to change their auditors and are putting the relevant resolution before a general meeting. What statutory rights have the auditors got to make representations to the shareholders of Tomos?A They may speak at the meeting but cannot communicate with the shareholders
5 There are provisions in the Companies Act 2006 which relate to the appointment of auditors in the following situations:(i) where the first auditors are to be appointed before the first general meeting at which the company’s accounts are laid;(ii) where there is a casual vacancy in the office of
4 Which one of the following qualifications does a person require in order to seek the designation‘Registered Auditor’?A A member of the Chartered Institute of Management Accountants.B A member of the Chartered Institute of Public Finance and Accountancy.C A member of the Association of
3 The following resolutions may all be moved at a general meeting of a company:(i) appointing a person as auditor other than a retiring auditor;(ii) filling a casual vacancy in the office of auditor;(iii) removing an auditor before the expiration of his term of office.Which of these resolutions
2 Plush plc has prepared its accounts for the financial year ended 31 December 2004. What is the last date by which the accounts must be laid before a general meeting and filed with the Registrar?A 31 July 2005 B 31 October 2005 C 31 December 2005 D 31 March 2005
1 Morgan Ltd has just delivered its accounts to 31 December 2004 to the Registrar. The accounting records for that period must under the Companies Act 2006 be kept until:A 31 December 2005.B 31 December 2006.C 31 December 2007.D 31 December 2008.
4 (a) Examine the nature of ‘floating charges’ as security for moneys lent or credit given to registered companies.(b) Multifix Plc borrowed £1,000,000 from Moneybags giving as security a floating charge over all its undertakings. A clause in the contract provided that the company was not to
2 to appoint a new auditor, Bill, to fill a casual vacancy caused by the sudden death of the auditor appointed at the last annual general meeting.James, who is owed £5,000 by the company for goods supplied, is opposed to the proposal to reduce the share capital. Alfred and Florence are opposed to
1 to reduce the company’s share capital by extinguishing the liability of shareholders in respect of the unpaid capital on their shares;
3 Lagjet Ltd has a fully issued authorised share capital of £40,000 divided into 40,000 ordinary£1 shares; 75p has been paid up on each share. The shares are allocated as follows:the directors, Constance, Alan and Jack, each hold 6,500 shares;James holds 9,500 shares; Alfred and Florence each
2 (a) How may a company remove an auditor from the position he holds before the expiration of the term of his office? What can the auditor do if he is removed?(b) What can a company do if it considers that the auditor has been negligent in his duties to the company?(c) Can an individual shareholder
1 Detail the provisions of the Companies Act 2006 relating to the qualifications, method of appointment and procedures for the removal of a company auditor.(The Institute of Company Accountants)
5 The Barchester Bank has just taken a floating charge over the assets of Derwent Ltd, a manufacturing company. Who can be appointed by the bank to safeguard its security should circumstances require this?A The trustee for the debenture holder.B The Official Receiver.C An administrator.D An
4 Within how many days of its creation must a charge over the assets of a company be registered?A Twelve days B Twenty-one days C Fifteen days D Fourteen days
3 Tay Ltd has assets of £10,000. Its trade creditors are worth £20,000 and it has an unsecured overdraft with the Barchester Bank of £20,000. Tay wants to increase the overdraft facility to£30,000. The bank has agreed and has been given a floating charge over Tay’s assets to secure the
2 Thames Ltd is insolvent and is being wound up. The bank has a floating charge over its assets in regard to an overdraft which has not been registered. What is the effect of this?A The charge is void against the liquidator and the bank proves as an ordinary creditor.B The debt is void as against
1 Ouse Ltd has borrowed £10,000 from the Barchester Bank which is secured by an equitable charge over the company’s freehold land. The charge, which states that it will rank in front of subsequent charges including fixed charges, has been registered. Later on Ouse granted a fixed charge over the
6 (a) Distinguish between (i) ordinary, (ii) special and (iii) extraordinary resolutions. Indicate, in particular, the length of notices and matters in respect of which each resolution is required.AND(b) Fred is a managing director of Pine Wood Ltd. He also owns 25 per cent of the company’s
5 (a) What are the statutory requirements in respect of calling an annual general meeting? What is the usual business at an annual general meeting of a company?(b) What is an extraordinary general meeting? When must the directors call such a meeting?What consequences may follow the directors’
4 ‘A person who lends on the security of a specific mortgage of a company’s property is always entitled to repayment on his loan out of the proceeds of sale of the mortgaged property before any other creditor. A person who takes a floating charge is not in as secure a position.’Pennington.Why
3 Compare and contrast equity shares and debentures as alternative forms of investment, explaining also the difference between fixed and floating charges. (Kingston University)
2 In January 2003 Jones made an unsecured loan of £3,000 to a company of which he was a director. In January 2005 the directors resolved that in consideration of a further loan of £2,000 Jones should be issued with a debenture for £5,000, secured by a floating charge on the assets and
1 Richard is the founder, managing director and controlling shareholder of RST Ltd. For some years Richard kept the company afloat by making a number of unsecured loans to it. At the last tally the company owed him £20,000, and yet needed a further loan of £5,000. Richard is willing to advance
5 What is the minimum period of notice which must be given to the members of a limited company who are entitled to be present and vote in person or by proxy at an EGM to pass an ordinary resolution?A 28 days B 21 days C 14 days D 7 days 6 What quorum is required for a general meeting of a
4 Thames Ltd wishes to pass a special resolution of the members to change the articles. What length of notice is required, and how many of the company’s members present and voting in person or by proxy are needed to pass the resolution?A 21 days’ notice and over 50 per cent.B 28 days’ notice
3 Cunnane Ltd was incorporated on 1 February 2004. What is the latest date on which it must hold its first AGM?A 31 July 2005 B 31 December 2005 C 31 March 2006 D 31 December 2006
2 Felicity is a member of Wash plc. She has appointed Thomas as her proxy for the next AGM.Thomas will be able:A To vote on a show of hands and speak at the meeting.B To vote on a show of hands but not speak at the meeting.C To vote but only on a poll and speak at the meeting.D To vote only on a
1 In what circumstance may the members of a company who have requisitioned an EGM call the meeting themselves?A If the directors do not call a meeting to be held within 21 days of the deposit of the requisition.B If the directors do not within 21 days from the date of the deposit of the requisition
6 XY Bank plc is the subject of a takeover bid by Able Securities plc. In order to frustrate the takeover bid, the board of directors take the following action:(a) they allot one million unissued shares to Lionel who will vote against the takeover bid by Able Securities plc. Lionel does not have
5 Directors owe their company a duty to exercise their powers only for a ‘proper purpose’. Explain what is meant by ‘proper purpose’ and discuss the nature and scope of this duty. Illustrate your answer with references to decided cases, particularly those dealing with the power to issue
4 Maurice, a shareholder of Traders plc, has informed the company secretary that he intends to propose a resolution at the forthcoming annual general meeting that the company should discontinue its business activities in a particular overseas country.The directors have instructed the secretary not
3 You are required to explain the following issues relating to company meetings.(a) What is an extraordinary resolution and when is such a resolution required under the Companies Act 2006?(b) What is proxy voting? State whether such voting is always possible at company meetings.(c) What is a poll
2 (a) What members’ meetings are held by registered companies?(b) Name and define the different kinds of resolution which may be passed by such companies in general meeting. In the case of each kind of resolution give one example of business for which such a resolution is necessary. (The
1 (a) Explain how and in what circumstances a general meeting of a company will be called.AND(b) Explain what minimum period of notice must be given to call an extraordinary general meeting and whether and how such period may be shortened/lengthened.AND(c) Explain how many members must be present
6 Joe has been found guilty of wrongful trading. What is the maximum period for which he can be disqualified?A Fifteen years B Five years C Ten years D Three years
4 Unless the articles of a company carry a contrary provision directors must retire from office:A Every five years but may be re-elected any number of times.B Every three years with re-election any number of times.C Every three years with re-election only three more times.D Every five years with
3 The court is about to disqualify the directors of Blue Ltd for unfitness. How long may the order last?A A maximum of 15 years with no minimum.B A minimum of two years with a maximum of 15 years.C A minimum of two years with a maximum of five years.D A minimum of five years with a maximum of 15
2 The following directors of Julius Ltd have been disqualified for two years following their misconduct while directors of the company – Jane, Harry, Mary and James. Jane is now working as a secretary with Julius Ltd; Harry has taken a management consultancy appointment with Archer Ltd; Mary has
1 A director can be removed at a general meeting of his company. What kind of resolution is required?A An ordinary resolution following special notice to the company.B An ordinary resolution.C A special resolution following special notice to the company.D A special resolution.
7 ‘A modern company secretary is not a mere clerk but an officer of the company with extensive duties and responsibilities and he has ostensible authority to sign contracts in connection with the administration side of a company’s affairs.’Discuss this statement.
6 The following situations have arisen in the affairs of Harbottle Ltd:(a) The company’s managing director and founder member wishes to retire and move permanently to the south of France. For this purpose he needs capital. He owns 900,000 shares in the company which he needs to dispose of. Other
5 Harold was appointed managing director of Aire Ltd with a service contract for a term of four years. A group of shareholders is dissatisfied with Harold’s conduct of the company’s affairs and wishes to remove him from office.Advise the shareholders.
4 Mini-mo Ltd is a registered company whose main activity is the production of animal feedstuffs.The company has a fully issued share capital of 10,000 £1 shares. The three directors, George, Sheila and Robert, each hold 1,000 shares and the remaining shareholders Emily and Maurice hold 5,200 and
3 D was appointed director and managing director of X Ltd. The terms of his service contract provided that he should hold office for eight years and this term was also stated in the articles of association of X Ltd. The other directors of the company decided that D should be removed from his
2 ‘The combined effect of the Insolvency Act 1986 and the Company Directors Disqualification Act 1986 is to give a clear signal to directors that to allow their companies to continue trading and to incur debts at a time when the position is hopeless is both a costly and foolhardy thing to do. In
1 Melchester FC Ltd was incorporated by Albert Arkwright and Bertie Boozer in 1950. The company was set up to take over the running of Melchester FC, a Lancashire football club, who were founder members of the Football League. Arkwright, at the age of 70, is still a director and shareholder of the
6 Dee Ltd has net assets of £650,000. It intends to enter into a transaction with one of its directors involving a non-cash asset. At which of the following figures of non-cash asset value will it be necessary to attain member approval?A £100,000 B £2,000 C £65,000 D £6,500
5 The register of directors and secretaries must, so far as directors are concerned, give particulars in regard to each director of other directorships currently held and those which have been held in the previous:A Three years B Two years C Fifteen years D Five years
4 Mostyn, who is a director of Test Ltd, has caused the company loss by negligent mismanagement.The company wishes to sue Mostyn but the articles of Test exempt the directors from liability for negligence in the course of their duties. What is the legal position given that Mostyn has left the
3 Morgan is in breach of his fiduciary duty to the company. How may he be exempted from liability given that the breach is not a fraud on the minority?A By a written or an ordinary resolution of the members.B By a provision in the company’s articles.C By a provision in the company’s
2 Joe is a director of Slow Ltd and has just unsuccessfully defended an action brought against him by a third party in regard to the affairs of Slow Ltd. Can Joe be indemnified in respect of the legal and judgment costs he incurred from the assets of Slow Ltd?A The company cannot indemnify Joe
1 Mike has a service contract with Trent plc for a fixed term of 10 years which cannot be terminated by notice. The contract has not been considered in general meeting. What is the legal position?A The contract is valid.B The contract is void and the company can terminate it at any time by giving
7 Landrut plc is a property company. Its principal activity is buying land, building private houses and selling those houses directly to the public.Six directors form the board. The three executive directors are Jack, a solicitor, in charge of the legal department; Jeremy, a quantity surveyor,
6 You have recently been appointed as company secretary to a large public company with a Stock Exchange listing for its securities. The board of directors has asked you for advice on certain matters relating to their duties as directors.You are required to advise the board of directors on the legal
5 (a) What controls are there on the provision by a public company of loans to its directors and on other financial dealings with them?(b) Eric, Frank and George are the directors of Happy Ltd. At a recent board meeting, Eric proposed that £50,000 be paid to Frank in recognition of his services in
4 A director is in a fiduciary relationship with his company. Explain the meaning and effect of this statement with reference to decided cases.
3 A managing director is usually appointed by the other directors and his powers and duties will depend on his contract of service with the company.(a) Explain and illustrate whether a director who has not been appointed as a managing director can bind the company as if he were managing
2 (a) Give an account of the extent to which the common law fiduciary duties of company directors have been added to by statutory provisions.(b) Henry is a non-executive director of Dreghorn plc. He also runs his own management consultancy business, Manpower & Co. Dreghorn is undergoing a process
1 ‘The rule of equity which insists on those who by use of fiduciary position make a profit, being liable to account for that profit, in no way depends on fraud . . . The profiteer, however honest and well-intentioned, cannot escape the risk of being called upon to account.’ Per Lord Russell of
5 Manfred is a director of Thames Bank plc. He has borrowed £40,000 under the bank’s directors’and employees’ cheap loans scheme to carry out repairs to his main residence. His son, Adolf, who is aged 30 and is employed by the bank, has also got a loan under the scheme and his wife has
4 Coniston Ltd holds board meetings once a month, on the first day of the month. At the August meeting the board discussed a contract with Ullswater Ltd. On 15 August John, a director of Coniston, bought shares in Ullswater. The contract was eventually signed between Coniston and Ullswater on 12
3 Windermere Ltd has entered into a transaction with one of its directors to purchase from him freehold land exceeding £100,000 in value. Given that the transaction has not been approved by the members it is:A Void.B Valid.C Voidable at the instance of the company.D Voidable at the instance of the
2 Tees Ltd is engaged in the catering business. It has lent John, a director, £6,000 interest free, to buy a car. It has also lent Jane, another director, £10,000 at 8 per cent per annum interest to assist in the purchase of her place of residence. What is the legal status of the loans?A The
1 Test Ltd is reducing the size of the board and Fred is to leave it. Test Ltd wishes to pay Fred compensation for loss of office. This payment must be approved by:A The Inland Revenue.B The shareholders by ordinary or written resolution.C The board of directors.D The creditors.
6 Madonna was employed as a hair stylist by Manecut Ltd. She entered into an agreement not to compete with Manecut for six months after leaving the company’s employment. That agreement is a reasonable restraint of trade. Madonna left and formed a company called Topcut Ltd and began to trade in
5 The managing director of a company has usual or ostensible authority to bind the company by transactions he enters into on its behalf. Which of the following statements represents the limit of this authority?A All commercial matters which relate to the running of the business.B All activities of
4 The register of directors and secretaries contains particulars of directors and secretaries. In the case of a director these must include his:A Usual residential or confidentiality service address.B Usual residential and business address.C Usual business address only.D Usual residential address
3 The register of directors and secretaries of a company must be available to inspection by:A Members without charge and other persons on payment of a fee.B Members only.C Members and other persons without charge.D Members and other persons on payment of a charge.
2 Fred is a director of Bray Ltd and holds 500 shares in that company. His wife is also a director and holds 400 shares. He has two children – John, aged 19 and Jane, aged 15 – who hold 50 shares each. What is the maximum number of shares which Fred must disclose as his shareholding?A 1,000
1 Jones is a director of Shannon Ltd which is a subsidiary of a public company. At what age will Jones have to vacate office and seek re-election at the next annual general meeting?A No age limit B 75 C 70 D 65
5 Detail the contents of the memorandum of association of a public limited company and state the importance of having a registered office.
4 Name FOUR ways in which the facility to purchase its own shares may be useful to a company and briefly outline the safeguards provided by the legislature when using this facility.(Kingston University)
3 Write notes on TWO of the following:(a) the name clause of the memorandum;(b) the transfer of shares;(c) variation of class rights;(d) promoters. (The Institute of Chartered Secretaries and Administrators)
2 ‘If powers of management are vested in the directors, they and they alone can exercise these powers . . .’ per Greer LJ in Shaw & Sons (Salford) Ltd v Shaw (1935).Discuss the above statement in relation to the powers of the shareholders in general meeting. (The Institute of Chartered
1 The articles of association of a public limited company provide as follows:A101 ‘the directors shall appoint a person to hold the office of company secretary at their discretion but subject to the provison that any such appointment must be made for a period of at least five years from the date
5 John has just formed a limited company. Which of the following details can John exclude from its business stationery?A The names of all of the company’s directors.B The company’s registered number.C The full name of the company.D The address of the registered office.
4 A derivative action is one which is brought by:A The company.B A member of the company on behalf of all the other members.C A member of the company on his own account.D A member of the company on behalf of the company.

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Smith And Keenans Company Law 14th Edition Charles Wild, Stuart Weinstein - Solutions

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