Company Law Quiz

What is the legal status of a company once it is registered?

• It is treated as a sole proprietorship.

• It is recognized as a 'person' separate from its members.

• It has no legal recognition.

• It can only operate under its members' names.

What happens to a company's existence if all its members die?

• The company automatically dissolves.

• The company continues to exist.

• The company must be re-registered.

• New members must be appointed.

In whose name can a company sue and be sued?

• In the name of its shareholders

• In the name of the managing director

• In its own name

• In the name of the partnership

What type of liability do shareholders have in a company limited by shares?

• Unlimited liability

• Limited liability

• Joint liability

• No liability

How are the assets of a company treated?

• They belong to the shareholders.

• They belong to the company itself.

• They are collectively owned by partners.

• They can only be used for personal expenses.

What must happen for a company to be dissolved?

• It must be decided by majority vote.

• It must follow the process set out under the Companies Act 2016.

• It can dissolve automatically after five years.

• It must have all members agree to dissolve.

Which of the following is NOT an advantage of companies over partnerships?

• Ability to sue in its own name

• Limited liability for partners

• Continuous life until legally wound up

• Requirement for annual general meetings

Which statement is true regarding Limited Liability Partnerships (LLPs)?

• Partners have unlimited liability.

• LLPs require formal audits.

• LLPs offer limited liability to partners.

• LLPs must issue shares.

What is one advantage companies have when raising capital?

• They can only borrow against fixed assets.

• They can create floating charges over current assets.

• They cannot raise capital through shares.

• They require unanimous consent from all members for loans.

Which type of business structure must submit financial statements to SSM?

• Company

• Partnership