Objectives

The process of setting up a company in the UK involves:

• Registering with Companies House

• Obtaining a business license

• Hiring employees

• Opening a business bank account

Answer explanation

What are the advantages and risks of shelf companies?

• Shelf companies offer immediate business operations but may have hidden liabilities.

• Shelf companies are always risk-free and advantageous.

• Shelf companies are illegal and should be avoided.

• Shelf companies have no advantages.

What is the legal and practical importance of board meetings?

• Board meetings ensure compliance with legal requirements and facilitate strategic decision-making.

• Board meetings are primarily social gatherings for networking.

• Board meetings are optional and have no significant impact on a company.

• Board meetings are only necessary for financial reporting.

How can an entrepreneur start their business as a company?

• By setting up a new company from scratch

• By buying an existing shelf company

• Both (a) and (b)

What is the first step in the creation of a new private or public company?

• Formation of the company by subscribing a memorandum of association

• Application to Companies House for registration

• Registration by Companies House

What is the best business structure for small-medium businesses looking for liability protection and investment?

• Private Limited Company (Ltd)

• Public Limited Company (PLC)

• Limited Liability Partnership (LLP)

• Sole Trader / Partnership

Which business structure is best for large businesses planning to trade publicly?

• Private Limited Company (Ltd)

• Public Limited Company (PLC)

• Limited Liability Partnership (LLP)

• Sole Trader / Partnership

A Limited Liability Partnership (LLP) is best for professional firms such as ________.

• lawyers, accountants, architects

• doctors, nurses, pharmacists

• engineers, technicians, mechanics

• chefs, waiters, bartenders

What is a major con of a Sole Trader / Partnership?

• A) More paperwork

• B) Strict regulations

• C) Unlimited personal liability

• D) Cannot raise capital via shares.

What is a Memorandum of Association?

• A legal document that defines the company's relationship with shareholders

• A financial statement showing the company's assets and liabilities

• A marketing plan for the company's products

• A document outlining the company's employee policies