Principles of Commercial Law

Which of the following two are non-possessory securities?  

• Lien and Pledge

• Pledge and Mortgage

• Mortgages and Charges

• Lien and Mortgages

Which statement is INCORRECT? 

• A limited partnership requires two or more persons to do business.

• An ordinary partnership requires two or more persons to do business.

• A limited liability partnership requires two or more persons to do business.

• None of the above

One of the following is true about the Pari Passu rule:

• Effects a pro rata scheme of distribution among company creditors

•  Is not mandatory and hence, parties can avoid it. 

• Secured creditors are not affected by the operation of the pari passu principle.

• None of the above. 

Which of the following is not an insolvency principle:

• Maximizing return to creditors

• Providing a fair and equitable ranking of creditor claims 

• Termination of directors powers

• Non-creation of a statutory trust

Which statement is the CORRECT one?

• A partner in a limited liability partnership is an agent of the firm but is not an agent of the other partners.

• Limited partnerships come with the twin benefit of separate legal personality and limited liability.

• Sole proprietorships enjoy perpetual succession.

• A company cannot be a member of a partnership.

Which statement is FALSE?

• A general partner manages the business of a private fund limited partnership.

• A limited partner may take action on the general nature of the private fund limited partnership’s business.

• A limited partner may not take action on whether a person should become or cease to be a partner in a private fund limited partnership.

•  A general partner has unlimited liability in a private fund limited partnership

Which statement is INCORRECT?

• A limited partnership requires two or more persons to do business

• An ordinary partnership requires two or more persons to do business

• A limited liability partnership requires two or more persons to do business

• None of the above

Which option is CORRECT about Partnerships under the Partnership Act 1890?

• Every partner in a firm is liable jointly with the other partners

• Every partner lacks the benefit of limited liability

• Every partner’s act may bind the firm and other partners

• All of the above

Which of the following statements is TRUE of the limited liability company?

• It is a business vehicle that was always recognised at common law.

• It is a business vehicle that is recognised as the principal unit of commercial life.

• It is a business vehicle that always enjoyed both separate legal personality and limited liability in English law.

• It is a business vehicle that is exempt from tax regulations

Following the reasoning in Salomon v Salomon & Co [1897] AC 22, a limited liability company:

• Will be deemed to be validly incorporated once there has been compliance with the statutory requirement for forming a valid company

• Will not be deemed to be an agent of its shareholders

• Will not be deemed to be a trustee or nominee of its directors’ estate

• All of the above