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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 211
'Special notice' required for certain resolutions must be given to the company at least:
Select an option first.
Correct answer: C — 28 days before
Explanation: s.312 CA 2006: special notice requires 28 days' notice to the company.
Question 212
Which decision requires a special resolution (75%) under CA 2006?
Select an option first.
Correct answer: B — Changing the company's name
Explanation: s.78 CA 2006: changing the company's name requires a special resolution.
Question 213
The 'register of members' must contain:
Select an option first.
Correct answer: B — The names and addresses of members, dates of entry/cessation, and shareholding details
Explanation: s.113 CA 2006: name, address, dates of membership, and shareholding details for each member.
Question 214
A director's 'service contract' is significant because:
Select an option first.
Correct answer: B — It sets out terms of the director's employment; guaranteed terms exceeding 2 years require shareholder approval
Explanation: s.188 CA 2006: shareholder approval required for guaranteed term exceeding 2 years.
Question 215
'Piercing the corporate veil' is most closely associated with:
Select an option first.
Correct answer: B — Disregarding the company's separate legal personality to hold directors or shareholders personally liable
Explanation: Piercing the veil: treating persons behind the company as personally liable; exception to Salomon.
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Question 216
An LLP must have a minimum of how many members?
Select an option first.
Correct answer: B — Two
Explanation: LLPA 2000: an LLP must have at least two members.
Question 217
The 'two-year rule' for service contracts means a guaranteed employment term exceeding 2 years must be:
Select an option first.
Correct answer: B — Approved by ordinary resolution of shareholders
Explanation: s.188 CA 2006: shareholder approval by ordinary resolution for guaranteed term over 2 years.
Question 218
Model Articles of Association under the Companies Act 2006 fill gaps in a company's articles:
Select an option first.
Correct answer: B — By applying the relevant Model Articles as default rules
Explanation: s.20 CA 2006: Model Articles fill gaps where articles are silent.
Question 219
A 'statutory demand' procedure is used to:
Select an option first.
Correct answer: B — Give formal notice to a company that an undisputed debt is owed, non-payment of which evidences insolvency
Explanation: Statutory demand: formal notice of an undisputed debt; non-payment evidences inability to pay debts.
Question 220
Under the CDDA 1986, which is a mandatory ground for disqualification?
Select an option first.
Correct answer: B — Being a director of an insolvent company found to be unfit to be concerned in management
Explanation: CDDA 1986 s.6: mandatory disqualification (minimum 2 years) for unfit director of insolvent company.
Question 221
'Treasury shares' held by a company after a buyback:
Select an option first.
Correct answer: B — Do not carry voting rights or dividend rights while held in treasury
Explanation: Treasury shares (s.724 CA 2006): no voting rights, no dividends while held in treasury.
Question 222
A nominee director:
Select an option first.
Correct answer: B — Still owes duties to the company as a whole and cannot simply act on the nominator's instructions if doing so would harm the company
Explanation: Nominee directors owe the same duties to the company as all other directors.
Question 223
An executive director differs from a non-executive director primarily in that:
Select an option first.
Correct answer: B — Executive directors are also employees of the company with operational responsibilities; non-executives are not
Explanation: Executive directors hold both a directorship and a service contract (employment).
Question 224
The minimum number of directors required for a private company is:
Select an option first.
Correct answer: B — One
Explanation: s.154(1) CA 2006: private company must have at least one director.
Question 225
The maximum period for director disqualification under the CDDA 1986 is:
Select an option first.
Correct answer: C — 15 years
Explanation: CDDA 1986: disqualification orders range from 2 to 15 years; 15 years is the maximum.
Question 226
'Allotment' of shares is:
Select an option first.
Correct answer: B — The process by which a company issues new shares to an applicant, creating a new membership right
Explanation: Allotment: company creates and issues new shares to an applicant.
Question 227
A 'single member company' under CA 2006 is:
Select an option first.
Correct answer: B — Permitted – a private or public company can have just one member
Explanation: CA 2006 permits single-member companies for both private and public companies.
Question 228
The 'agency of necessity' doctrine allows a person to act as an agent without prior authority when:
Select an option first.
Correct answer: B — An emergency makes it necessary to act to preserve the principal's interests, and it is impossible to obtain the principal's instructions
Explanation: Agency of necessity: genuine emergency + impossible to contact principal + acting bona fide.
Question 229
When a partner retires from a general partnership, they can protect against liability for future debts by:
Select an option first.
Correct answer: B — Giving actual notice to existing creditors and public notice (e.g., in the London Gazette) to those who dealt with the firm but are not yet creditors
Explanation: Retiring partner must give actual notice to existing creditors and constructive notice (Gazette) to others.
Question 230
An agent acting within apparent (but not actual) authority creates a contract that is:
Select an option first.
Correct answer: B — Binding on the principal in favour of a third party who relied on the apparent authority in good faith
Explanation: Apparent authority: principal bound to third party who relied on it in good faith.
Question 231
Which of the following is a factor relevant to determining whether a company is a 'quasi-partnership' for unfair prejudice?
Select an option first.
Correct answer: B — An association based on mutual confidence between shareholders, often with an understanding that all or some members will participate in management
Explanation: Quasi-partnership (Ebrahimi): mutual trust, participation in management, transfer restrictions.
Question 232
The 'Duomatic principle' in company law holds that:
Select an option first.
Correct answer: B — Where all members who have the right to attend and vote informally assent to a matter, that assent is as effective as a formal resolution
Explanation: Duomatic principle (Re Duomatic Ltd): unanimous informal consent substitutes for formal resolution.
Question 233
Under s.172 CA 2006 (duty to promote success), directors must have regard to:
Select an option first.
Correct answer: B — Long-term consequences, employees' interests, community/environmental impact, and reputation for high standards
Explanation: s.172(1)(a)-(f): long-term consequences, employees, business relationships, community, environment, and reputation.
Question 234
A 'class right' attached to shares can only be varied with:
Select an option first.
Correct answer: B — The consent of holders of that class (typically 75% in value), as provided in the articles or statute
Explanation: Variation of class rights (s.630 CA 2006): requires consent of holders of that class.
Question 235
The primary purpose of the Memorandum of Association under CA 2006 is:
Select an option first.
Correct answer: B — To confirm that the subscribers wish to form a company and agree to become members
Explanation: Under CA 2006, the Memorandum simply confirms subscribers' intention to form a company.
Question 236
'Deemed notice' in the context of Companies House means:
Select an option first.
Correct answer: B — Certain documents filed at Companies House give constructive notice to the public – third parties are treated as having notice of their contents
Explanation: Registration at Companies House gives constructive notice to the public.
Question 237
The statutory derivative action (Part 11 CA 2006) differs from the old common law form because:
Select an option first.
Correct answer: B — It provides a statutory framework where a member brings the action on behalf of the company and the court must give permission, applying specific criteria
Explanation: Part 11 CA 2006: derivative action codified; court must give permission and apply specific criteria.
Question 238
A D&O (directors and officers) indemnity under CA 2006:
Select an option first.
Correct answer: B — Is permitted for third-party liabilities (e.g., defence costs and third-party damages) but cannot cover fines or penalties imposed by regulatory or criminal authorities
Explanation: ss.232-234 CA 2006: qualifying third-party indemnity permitted; cannot cover fines/criminal penalties.
Question 239
A 'general meeting' of a company is a meeting of:
Select an option first.
Correct answer: B — The company's shareholders (members)
Explanation: A general meeting is a meeting of the company's members (shareholders). Directors attend but it is a members' meeting. C and D describe other gatherings.
Question 240
Under the Companies Act 2006, a company must give members at least how many days' notice for a general meeting (other than an AGM for a public company)?
Select an option first.
Correct answer: B — 14 days
Explanation: s.307 CA 2006: at least 14 days' notice for a general meeting of a private company or an extraordinary general meeting of a public company. A public company AGM requires 21 days.
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