Corporate & Business Law (UK) Flashcards

Under the Insolvency Act 1986, a company voluntary arrangement (CVA) is:

Answer: A compromise between the company and its creditors, supervised by a licensed insolvency practitioner

A CVA is a legally binding arrangement under which the company agrees a repayment plan with creditors, supervised by an insolvency practitioner, avoiding formal insolvency proceedings.

Which of the following correctly describes a 'debenture'?

Answer: A document evidencing a loan to a company, often secured by a charge over assets

A debenture is a document (or series of documents) acknowledging a company's indebtedness; it commonly incorporates a fixed or floating charge over company assets as security.

A floating charge over a company's assets:

Answer: Floats over a class of assets, crystallising on a specified event (e.g., insolvency)

A floating charge hovers over a changing class of assets (e.g., stock, debtors) and crystallises (becomes fixed) upon a trigger event such as the appointment of a receiver or insolvency.

Which of the following is a consequence of a company being struck off the register?

Answer: The company ceases to exist as a legal entity

When a company is struck off the register at Companies House, it ceases to exist as a legal entity and its assets vest in the Crown as bona vacantia.

Privity of contract means:

Answer: Only parties to a contract can sue and be sued on it

The doctrine of privity (Dunlop v Selfridge) means only parties to a contract have rights and obligations under it. Third parties cannot generally sue or be sued on it (subject to the Contracts (Rights of Third Parties) Act 1999).

Under the Equality Act 2010, which of the following is a 'protected characteristic'?

Answer: Disability

The Equality Act 2010 lists nine protected characteristics including disability, age, sex, race, religion/belief, sexual orientation, gender reassignment, marriage/civil partnership, and pregnancy/maternity.