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Free Questions › ACCA › Corporate and Business Law
Free ACCA Corporate and Business Law Practice Questions & Answers
400 exam-style Corporate and Business Law questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 331
The 'restructuring plan' under Part 26A CA 2006 differs from a scheme of arrangement in that it:
Select an option first.
Correct answer: B — Can be imposed on a dissenting class of creditors if no member of the dissenting class would be worse off than in the relevant alternative (cross-class cram down)
Explanation: Part 26A CA 2006: cross-class cram down available if no member of dissenting class is worse off than the relevant alternative.
Question 332
The Economic Crime and Corporate Transparency Act 2023 introduced:
Select an option first.
Correct answer: B — Enhanced identity verification requirements for directors filing with Companies House, and new corporate criminal offences
Explanation: ECCTA 2023: mandatory identity verification at Companies House and new corporate criminal liability.
Question 333
A company's 'going concern' basis of accounting is appropriate when:
Select an option first.
Correct answer: B — Management concludes there are no material uncertainties casting significant doubt on the company's ability to continue for the foreseeable future
Explanation: Going concern: no material uncertainties about continuing for the foreseeable future (at least 12 months from signing).
Question 334
Preference shareholders in a winding up:
Select an option first.
Correct answer: B — Are repaid their capital before ordinary shareholders but do not participate further in the surplus unless they have participating rights
Explanation: In liquidation, preference shareholders with capital priority are repaid before ordinary shareholders; no further participation unless articles say so.
Question 335
The Financial Conduct Authority (FCA) has regulatory responsibility for market abuse because:
Select an option first.
Correct answer: B — It is the UK competent authority for supervising compliance with market conduct rules under FSMA 2000 and the UK Market Abuse Regulation
Explanation: FCA: competent authority for market abuse under FSMA 2000 and UK MAR.
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Question 336
A 'qualifying floating charge holder' (QFCH) can appoint an administrator out of court. Their charge must:
Select an option first.
Correct answer: B — Cover all or substantially all of the company's assets
Explanation: QFCH: floating charge must cover substantially all company assets to appoint an administrator out of court.
Question 337
Which of the following statements about fraudulent trading is correct?
Select an option first.
Correct answer: C — It can be pursued as both a civil remedy (contribution order) and as a criminal offence
Explanation: Fraudulent trading: civil remedy (s.213 IA 1986) and criminal offence (s.993 CA 2006).
Question 338
The Corporate Insolvency and Governance Act 2020 introduced a standalone moratorium for eligible companies of initially:
Select an option first.
Correct answer: B — 20 business days
Explanation: CIGA 2020: standalone moratorium – initial period of 20 business days, supervised by a monitor.
Question 339
A 'solvency statement' for private company capital reduction must be signed by:
Select an option first.
Correct answer: B — All of the directors, confirming the company will be able to pay its debts for the next 12 months
Explanation: s.643 CA 2006: all directors sign solvency statement for private company capital reduction without court.
Question 340
'Customer Due Diligence' (CDD) in anti-money laundering procedures involves:
Select an option first.
Correct answer: B — Verifying the identity of customers and understanding the nature of their business to assess money laundering risk
Explanation: CDD: identifying/verifying clients' identity and understanding their business to assess AML risk.
Question 341
A 'Romalpa clause' (retention of title clause) in a sale of goods contract:
Select an option first.
Correct answer: B — Allows the seller to retain legal title to goods until payment, so if the buyer becomes insolvent the seller can reclaim the goods rather than rank as an unsecured creditor
Explanation: Retention of title: seller retains legal title until paid; can repossess on buyer's insolvency.
Question 342
The minimum statutory notice required before a creditor can petition to wind up a company using a statutory demand is:
Select an option first.
Correct answer: C — 21 days of the demand remaining unpaid
Explanation: s.123 IA 1986: statutory demand unpaid for 21 days creates a presumption of inability to pay debts.
Question 343
In a creditors' voluntary liquidation (CVL), who appoints the liquidator?
Select an option first.
Correct answer: B — Creditors (the members may initially nominate but creditors can replace that choice)
Explanation: CVL: creditors have the power to appoint (or replace) the liquidator.
Question 344
A 'proof of debt' in insolvency proceedings is:
Select an option first.
Correct answer: B — A formal claim submitted by a creditor setting out the amount they are owed, allowing them to participate in the distribution of assets
Explanation: Proof of debt: mechanism by which unsecured creditors submit claims in an insolvency.
Question 345
The 'prescribed part' calculation under s.176A IA 1986 is:
Select an option first.
Correct answer: B — 50% of the first £10,000 of floating charge realisations plus 20% of the remainder up to a capped maximum
Explanation: s.176A IA 1986 and the 2003/2020 Orders: 50% of first £10,000 + 20% of remainder, capped at £800,000.
Question 346
A floating charge granted within 12 months before insolvency is invalid under s.245 IA 1986 unless:
Select an option first.
Correct answer: B — The company received new value (money, goods or services) at the time the charge was created
Explanation: s.245 IA 1986: voidable floating charge – valid only if new consideration was provided at time of creation.
Question 347
The s.7 Bribery Act 2010 corporate offence defence requires a commercial organisation to show it had:
Select an option first.
Correct answer: B — Adequate procedures in place to prevent bribery by associated persons
Explanation: s.7 defence: adequate procedures (proportionate, top-level commitment, risk assessment, due diligence, communication, monitoring).
Question 348
A 'hostile takeover' is one where:
Select an option first.
Correct answer: B — The acquiring company makes a bid directly to target shareholders without the support of the target's board
Explanation: Hostile takeover: offer made directly to shareholders, bypassing and against the wishes of the target's board.
Question 349
'Crystallisation' of a floating charge converts it into a fixed charge, typically triggered by:
Select an option first.
Correct answer: B — The company entering liquidation or administration, or the chargeholder appointing a receiver
Explanation: Crystallisation: floating charge freezes and attaches to specific assets on triggering event.
Question 350
An administrator owes duties to:
Select an option first.
Correct answer: B — The company's creditors as a whole, not any individual creditor
Explanation: Administrator: officer of the court; duties owed to creditors as a whole.
Question 351
Which of the following is NOT a power of a liquidator?
Select an option first.
Correct answer: C — Issuing new shares in the company
Explanation: A liquidator cannot issue new shares. A, B and D are statutory liquidator powers under IA 1986.
Question 352
UK MAR defines 'inside information' as information that is:
Select an option first.
Correct answer: B — Precise, non-public information that if made public would likely have a significant effect on the price of financial instruments
Explanation: UK MAR: inside information – precise, non-public, price-sensitive information.
Question 353
The 'statement of affairs' in insolvency proceedings is prepared by:
Select an option first.
Correct answer: B — The directors or officers, showing assets, liabilities, creditors and their security details
Explanation: Statement of affairs: statutory document prepared by directors/officers setting out the company's financial position.
Question 354
The Economic Crime (Transparency and Enforcement) Act 2022 introduced:
Select an option first.
Correct answer: B — A Register of Overseas Entities (ROE) requiring foreign entities owning UK land to register and disclose their beneficial owners
Explanation: ECTEA 2022: Register of Overseas Entities for transparency around foreign ownership of UK property.
Question 355
A director disqualified under the CDDA 1986 is prohibited from:
Select an option first.
Correct answer: B — Being a director, acting as an insolvency practitioner, or being involved in the management of any company
Explanation: Disqualification prohibits: directorship, involvement in management, acting as insolvency practitioner.
Question 356
The 'insolvency set-off' rule permits:
Select an option first.
Correct answer: B — A creditor who also owes money to the insolvent company to set off the mutual debts, paying or proving for only the net amount
Explanation: Insolvency set-off (IR 2016): mandatory set-off of mutual debts; only the net balance is provable or payable.
Question 357
'Phoenix company' activity in insolvency law refers to:
Select an option first.
Correct answer: B — Dissolving an insolvent company and immediately forming a new company to carry on the same business, leaving creditors unpaid
Explanation: Phoenix activity: escaping debts by dissolving and re-forming; controlled by CDDA 1986, IA 1986 s.216-217.
Question 358
A 'disqualification undertaking' under the CDDA 1986 allows:
Select an option first.
Correct answer: A — A director to agree to be disqualified voluntarily without court proceedings
Explanation: s.1A CDDA 1986: voluntary agreement to accept disqualification without court proceedings.
Question 359
Which of the following correctly states when a 'members' voluntary liquidation' can be used?
Select an option first.
Correct answer: B — When the company is solvent and directors can make a statutory declaration of solvency confirming all debts can be paid within 12 months
Explanation: MVL requires a statutory declaration of solvency (s.89 IA 1986): all debts payable within 12 months.
Question 360
In a compulsory liquidation, directors' management powers cease when:
Select an option first.
Correct answer: B — The court makes the winding-up order
Explanation: On making the winding-up order, directors' powers to manage cease and vest in the liquidator.
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