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WorksheetsCompanies: the consequences and incorporation Part 1
Total questions: 10
Worksheet time: 10mins
With regard to limited liability, answer the following:
Is one of the main advantages of a registered company, the fact that it may enjoy limited liability?
YES
NO
With regard to limited liability, answer the following:
In the event of a registered company's limited shares being wound up, are its members always required to pay the outstanding amount of any share premium payable in respect of their shares, in addition to any outstanding part of their nominal value?
YES
NO
Mark incorporates his sole trader business, King Kilts, which manufactures high quality tartan kilts and sporrans, under the name King Kilts Ltd. He lent King Kilts Ltd $20,000 and owns 95% of its shares. He continued to insure the company's assets, including the factory, in his own name, as he had always done before incorporation. On New Year's Eve, the factory was destroyed by fire. Which of the following best describes the legal position?
Mark can claim on the insurance because King Kilts Ltd is essentially is no different from the original business
Mark can claim on the insurance because he has an insurable interest as a creditor of King Kilts Ltd
Mark can claim on the insurance because he has an insurable interest as a member of King Kilts Ltd
Mark cannot claim on the insurance because the insurance is not effected in the name of King Kilts Ltd and the company has the insurable interest
In some cases, the court lifts the corporate veil, for example, to ignore the incorporated nature of a business altogether in those cases where it appears to be nothing but a sham. Are the courts likely to lift the corporate veil in the following situations?
Where the creditors of a subsidiary company are unlikely to receive a settlement of their debts even though the holding company is financially very secure?
YES
NO
In some cases, the court lifts the corporate veil, for example, to ignore the incorporated nature of a business altogether in those cases where it appears to be nothing but a sham. Are the courts likely to lift the corporate in the following situations?
Where a company is registered in England and Wales but all its members, except one, belong to Neverland, a country with which England is at war? The company has five members with equal shareholdings.
YES
NO
Are the following statements true or false?
Where a public limited company fails to obtain a trading certificate, a member-director may be personally liable as a result. This is one example of statute lifting the corporate veil.
TRUE
FALSE
Are the following statements true or false?
A company is liable without limit for its own debts.
TRUE
FALSE
Leo and Seamus are planning to set up a public company selling electrical goods at discounted rates. They ask for your advice on the following matters:
Can it be an unlimited company?
YES
NO
Leo and Seamus are planning to set up a public company selling electrical goods at discounted rates. They ask for your advice on the following matters:
Can the company commence trading once it is incorporated, provided they obtain a trading certificate within the first 12 months following incorporation?
YES
NO
Ashley and George, the director of Pending Ltd, a fantastically successful company with a high public profile, plan to re-register their company as a public limited company. They have never had a company secretary before because Ashley has always dealt with that side of things. The company has a share capital of $50,000.
Do they need to appoint a company secretary?
YES
NO
