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
Under the Companies Act 2006, what is the minimum number of directors required for a private limited company?
Answer: 1
Section 154(1) CA 2006 requires a private company to have at least one director, who must be a natural person.
Which document governs the internal management of a company under the Companies Act 2006?
Answer: Articles of Association
The Articles of Association constitute the company's constitution and govern its internal management and the rights of its members.
What is the legal effect of a company becoming insolvent on a floating charge?
Answer: The floating charge crystallises and attaches to the assets
Upon a crystallisation event such as insolvency, a floating charge converts to a fixed charge and attaches to the assets covered at that moment.
Under the Partnership Act 1890, what is the default rule regarding sharing of profits and losses among partners?
Answer: Equally regardless of capital contribution
Section 24 PA 1890 provides that in the absence of agreement, partners share profits and losses equally, irrespective of their capital contributions.
What type of resolution is required to change a company's articles of association?
Answer: Special resolution (75%)
Under s.21 CA 2006, a company's articles can only be amended by a special resolution passed by at least 75% of those voting.
What is the purpose of a shareholders' agreement compared to a company's articles of association?
Answer: It is a private contract providing additional rights not in the articles
A shareholders' agreement is a private contract between shareholders offering flexibility and confidentiality beyond what the public articles provide.