Business Law and Practice Flashcards
6 cards from real SQE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Business Law and Practice flashcards as text
Which form is filed at Companies House to notify a change of registered office address?
Answer: AD01
Form AD01 is used to notify Companies House of a change to a company's registered office address.
What is the key distinction between a fixed charge and a floating charge?
Answer: A fixed charge attaches to specific assets immediately; a floating charge hovers over a class of changing assets
A fixed charge attaches to identified assets at creation, while a floating charge covers a fluctuating pool of assets until crystallisation.
Under the Insolvency Act 1986, what is the order of priority for distributing assets in a company liquidation?
Answer: Fixed charge holders → expenses → preferential creditors → floating charge holders → unsecured creditors → shareholders
In a winding up, fixed charge holders are paid first from their security, then liquidation expenses, then preferential creditors, then the prescribed part/floating charge holders, then unsecured creditors, and finally shareholders.
What is 'wrongful trading' under the Insolvency Act 1986?
Answer: Continuing to trade when a director knew or ought to have known there was no reasonable prospect of avoiding insolvent liquidation
Section 214 IA 1986 makes directors personally liable if they continued trading after knowing (or ought to have known) insolvent liquidation was inevitable.
Which Companies Act 2006 duty requires directors to promote the success of the company for the benefit of its members?
Answer: Section 172
Section 172 CA 2006 imposes a duty on directors to act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole.
What is the definition of a 'small company' under the Companies Act 2006 (as at SQE syllabus date)?
Answer: Turnover ≤ £10.2m, balance sheet ≤ £5.1m, employees ≤ 50
A company qualifies as small if it meets at least two of the three criteria: turnover ≤ £10.2m, balance sheet total ≤ £5.1m, and no more than 50 employees.