Smith And Keenans Company Law 15th Edition Charles Wild, Stuart Weinstein - Solutions

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3 The articles of association of a company on a paper incorporation must be signed by:A each one of the directors.B a majority of the directors.C all the subscribers to the memorandum.D one of the subscribers to the memorandum.
2 The Model Articles will apply automatically except where it is excluded or modified by special articles of association in the case of:A private companies limited by shares only.B public companies limited by shares only.C all companies limited by shares.D all limited companies.
1 Fred bought some shares in Tyne Ltd on 1 February 20XX. To whom does Fred become bound in contract?A The company only.B The members of Tyne on 1 February 20XX.C Tyne and those who are at present its members.D Tyne and those who were members of Tyne on 1 February 20XX.
4 ‘The company’s constitution forms a contract between a company and its members. This contract is, however, an unusual one, limited both in its scope and permanence despite the best efforts of the Companies Act 2006 to clarify matters.’Discuss.
3 (a) Section 33 of Companies Act 2006 provides that the company’s constitution constitutes an agreement between the company and its members as if they have signed and sealed a contract to abide by its provisions.Comment.(b) A, B and C are members of X Ltd. The company has now discovered that C
2 Success Limited has been trading profitably for 10 years, with capital provided by each of its four directors and their families. The directors consider that the company could be even more profitable, if it were able to make a public issue of securities, and they are advocating the reregistration
1 Discuss how the Companies Act 2006 approaches the notion of a company’s constitution with specific reference to the change in approach taken since the Companies Act 1985.Explain how the Model Articles can be utilised. (University of Hertfordshire)
4 Promoters wish to form a company to be called ‘Barchester City Council Tuition Services Ltd’.What is the legal position as to the permissibility of that name in company law?A The name cannot be registered because it is unlawful.B It can be registered if the Secretary of State gives
3 Ribble Ltd has a share capital of 1,000,000 ordinary shares. The holders of 800,000 shares vote on a resolution to change the company’s name. The minimum number of votes which must be cast in favour of the resolution for it to be effective is:A 400,001 B 500,000 C 600,000 D 750,000
2 On 1 February Mersey Ltd passed a special resolution changing its name to Trent Ltd. On the same day the managing director made a contract with Thames Ltd to sell it some goods. On 1 March the company received its new certificate of incorporation and on 1 April Trent Ltd failed to deliver the
1 A transaction with a trade creditor which falls outside a company’s express objects set out in the articles is:A Valid under s 39 of the CA 2006.B Void as being ultra vires the company.C Void as being ultra vires the directors.D Void at the instance of the members.
7 For several years Jay Ltd has been carrying on the business of managing night clubs. The directors are now proposing that the company should operate a chain of pizza restaurants but, because some of the shareholders are objecting to the proposal, they wish to know if it would be
6 Explain the term ‘business name’ and describe the relevance of the Business Names Act 1985.(The Institute of Company Accountants)
5 Jane is a promoter dealing with the formation of a private limited company. You are required to advise Jane on the following matters.(a) The restrictions which exist upon the choice of corporate name.(b) The documentation which must be sent to the Registrar of Companies in order to obtain
4 The objects clause as traditionally contained in the memorandum of association of a company has been the subject of considerable debate and disagreement, even with the introduction of s 3A of the Companies Act 1985. The only way in which this area could be clarified once and for all was to pursue
3 Eric and Stanley have been carrying on business in partnership as building contractors in a small town for some years. They carry out most of the work themselves and only occasionally employ labour. They have no plans to enlarge the area of their operations. It has been suggested to them that
2 In 2005 Archie, Bert, Colin and David, as shareholders and directors, set up a company to acquire a disused mill to renovate into single-person flats. David had bought the mill in 2004 and sold it to the company once it was formed. Bert has now become concerned that this deal has caused the
1 ‘There are occasions when the courts will look behind the formality of legal personality and will appear to disregard it, but it is impossible to find any consistent principle upon which they will do so.’Discuss.
6 Meg used to be employed by Trent Ltd. Her contract contained a clause under which she agreed not to compete with Trent Ltd. The clause was reasonable in terms of its duration and area. Meg has now formed a company called Meg (Corporate Services) Ltd and has started to compete against Trent Ltd
5 Joe and Fred wished to form a company. On 1 March 20XX they filed the appropriate documents with the Registrar. On 10 May 20XX they received a certificate of incorporation dated 1 May 20XX. Later they found out that the company had been registered on 4 May 20XX. On what date was the company
4 Before the incorporation of Ouse Ltd, its promoter Bob entered into a contract on behalf of the company. The contract gave the unformed company third-party rights. Who is liable if the contract is later breached?A Ouse Ltd.B Bob and Ouse Ltd.C The shareholders of Ouse Ltd.D The directors of Ouse
3 Fred is a member of a private company at the date of its re-registration as a public company.Fred cannot profit by selling non-cash assets to the public company within an initial period of two years from the date of re-registration unless:A The sale is approved by a resolution of the board and
2 Thames was re-registered from a limited to an unlimited company. It wishes to re-register as a public company.A It must apply to the Registrar to be registered as a public limited company.B It must re-register as a private limited company and then re-register as a public company.C It must pass a
1 When a private company wants to re-register as a public company it must file a balance sheet with the Registrar. The balance sheet must be one which is not more than:A Fifteen months old at the date of re-registration.B Seven months old at the date of re-registration.C Fifteen months old at the
4 Philip, who is in the process of forming a company, wishes to avoid personal liability upon any contracts he may enter into on behalf of the proposed company. Advise Philip.
3 Bill and Ben trade in partnership as garage mechanics. They are considering changing their form of business association and trading as a private registered company limited by shares.Explain to them the legal procedures that they must follow in order to form such a company, and advise them on the
2 Brian, who had decided to transfer his existing wholesale food business to a private limited company called Brian Foods Ltd, delivered the necessary documents to the Registrar of Companies and received the Certificate of Incorporation (dated 1 April) on 6 April 2005.On 15 March 2005, Brian agreed
1 The directors of Balkan Ltd have decided that it is necessary to convert their company into a public limited company. Advise them on:(a) the differences between a private and public limited company;AND(b) the procedures to be followed during re-registration.
4 Three friends own and are also directors of a limited company carrying on the family business.They have it in mind to change the organisation to an ordinary partnership. What aspect of the business would be affected if this change were carried out?A The right to sue in the business name.B The
3 To what extent is a member of a company which is limited by guarantee personally liable for the company’s debts?A He is personally liable for all the company’s debts at any time.B He is personally liable for all the company’s debts if the company is wound up.C His personal liability is
2 Fred has been allotted 200 £1 ordinary shares in Ark Ltd with a nominal value of £1 and a premium of 0.40 pence. Fred has paid 0.85 pence. What is Fred’s maximum liability if the company is wound up?A £30 B £110 C £2,000 D £280
1 The members of a social club wish to form a legal entity. There is no commercial risk but they do not want too much disclosure of their affairs to the public. What type of company should they form?A A company limited by guarantee.B An unincorporated association.C A private company limited by
6 Thomas Taylor-Wright is a sole trader, based in Saville Row in London, where he has a very lucrative business making men’s exclusive formal suits. Thomas has decided that he would like to expand his business and is having discussions with a fellow tailor, Terry Thimble, about possibly going
5 John, who runs Trent Ltd, a small manufacturing company, has heard that he may not have to appoint auditors in regard to future accounts and is keen to save the audit fees. Advise John as to the relevant law. (Authors’ question)
4 Explain by reference to statutory and common law examples what is meant by the term ‘lifting the veil of incorporation’.
3 ‘. . . a fundamental attribute of corporate personality . . . is that the corporation is a legal entity distinct from its members’ – Gower.Which do you consider are the two outstanding advantages of incorporation? Give reasons for your choice and explain their dependence upon this
2 The principle of law set out in Salomon v Salomon & Co Ltd is not always applied. Give the facts of this case and give its principle of law, and discuss when the judiciary or statutory provisions will not take account of that principle. (University of Paisley)
1 (a) In the celebrated case of Salomon v Salomon & Co Ltd [1897] AC 22, Lord Halsbury LC observed: ‘Either the limited company was a legal entity or it was not. If it was, the business belonged to it and not to Mr Salomon. If it was not, there was no person and no thing to be an agent at all and
When does a voluntary winding-up, whether members’ or creditors’, commence?A When the relevant resolution is passed.B When notice of the passing of the resolution is received by the Registrar.C When the resolution is approved by the court.D When notice of the resolution is published in the
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
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 if
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 may
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.
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
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
On the liquidation of Technix plc the assets and liabilities of the company are stated as follows:The liquidator of Technix seeks your advice as to the priority of each of the company’s creditors. You are given the following additional information:(i) In 2003 a charge was created over all the
June 2004 Deadloss created a fixed charge over its land and buildings in favour of Easymoney to secure a loan of £200,000. The charge was not dated and, owing to an oversight, not registered either. The oversight was discovered on 10 July 2004. The secretary of Deadloss promptly filled in the date
January 2004 to secure a loan of £500,000 from Financings Ltd. The charge contained a clause restricting Deadloss from creating any further charges ranking in priority or pari passu with it. This charge was duly registered within the requisite period.(b) On
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
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
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.
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
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
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.
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
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 court
Discredit Bank plc is a large merchant bank situated in the City of London. The Chairman and Managing Director of the company is Dan, a high-powered executive who is well-respected in the City. Seven other directors sit on the board, including Maggie, the Finance Director. Dan and Maggie, together
Plym plc is a holding company whose several subsidiaries are all exclusively private companies.The capital structure of the subsidiaries consists of ordinary shares, several classes of preference shares, and debentures. Because of the administrative difficulties caused by the diverse nature of the
Corporate entity and limited liability do not always provide complete protection from personal liability for company directors and shareholders.You are required to discuss the situations where such persons may be personally liable.(The Chartered Institute of Management Accountants)
The prime intention of the Insolvency Act 1986 with regard to companies is to provide various alternatives to the winding-up of an insolvent company.Discuss. (The Institute of Chartered Secretaries and Administrators)
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.
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
Toys plc is in financial difficulties. Cycles plc is prepared to inject new capital into Toys, which when completed will leave Cycles with 35 per cent of the share capital of Toys. What is the position under the City Code?A Cycles is required to make a bid for the rest of Toys’ shares.B The City
Tay plc is to make a bid for shares in Uncle plc. If the bid is successful it will result in Tay holding 20 per cent of the shares in Uncle. What is the position under the City Code?A The Panel must consent and will normally do so.B There is no need for the Panel to be involved.C The Panel must
Developer plc wishes to take over Hotels Ltd in order to develop the sites on which various hotels belonging to Hotels Ltd stand as supermarkets. Developer’s bid is likely to be accepted by a majority of Hotels’ shareholders. The directors of Hotels Ltd have sold the various hotels to a
Thames plc is in financial difficulties and wants its debenture holders to exchange their debentures for shares in order to get rid of the requirement to pay interest on the debentures. How should Thames proceed?A Under s 110 of the Insolvency Act 1986.B Under s 895 of the Companies Act 2006.C By a
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
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
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?
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)
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 all
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 in
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
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 Chartered
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.
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
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:A31 December 2005.B 31 December 2006.C 31 December 2007.D 31 December 2008.
(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
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 hold
(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
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)
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
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
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
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 the
(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
(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’
‘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.
Compare and contrast equity shares and debentures as alternative forms of investment, explaining also the difference between fixed and floating charges. (Kingston University)
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 undertaking
What quorum is required for a general meeting of a multi-member registered company?A Two persons who are either members or proxies for members.B Three persons who are members or proxies for members.C Two persons who are members.D Three persons who are members.Richard is the founder, managing
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
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
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
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 poll
In what circumstance may the members of a company who have requisitioned an EGM call the meeting themselves?
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
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
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 to
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

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Smith And Keenans Company Law 15th Edition Charles Wild, Stuart Weinstein - Solutions

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