Question

What is 'limited liability?'

Group of answer choices

Limited liability refers to the directors' ability to limit their liability for acts of negligence, fraud etc.

Limited liability refers to the ability of a company to limit its liability.

Limited liability refers to how much the directors have to contribute in the event of the company becoming insolvent.

Limited liability refers to the ability of a member to limit his liability.

Question

In the leading case of Salomon v Salomon & Co Ltd [1897] AC 22, the court found that

Group of answer choices

The charge given by the company to MrSalomon was valid

The company was an agent for Mr Salomon

The company should pay its creditors before it pays Mr Salomon

The company was a trustee for Mr Salomon

Question

Which of the following is the best description of the significance of the decision in Salomon v Salomon & Co Ltd (1897)?

Group of answer choices

The benefits of incorporation were capable of extending to small private companies

The concept of separate legal personality cannot be used by a sole trader

The notion of limited liability should not apply to corporations owned and operated by a single person

A shareholder who is also involved in the management of the company is not entitled to the benefit of limited liability

Question

Which of the following in NOT a correct way of dissolving a general partnership, tick all of the following that you feel are correct.

Group of answer choices

by taking no part in the management of the partnership

May be by mutual agreement or operation of law

where any event makes it unlawful to carry on partnership

death or bankruptcy of any of the partners

by any partner giving notice

by abandoning the partnership

S.35 – by application to the court

by the payment of a sum of money into Court

Question

It is in the interest of both the retiring partner and the firm to publicise the fact of the retirement and so end the apparent authority.

Group of answer choices

True

False

Which of the following is not an attribute of the legal personality of a registered company?

Group of answer choices

it can contract with outside parties and with its own members

its major shareholders and directors cannot be employees of it

it is liable for its own obligations like any other person

it has perpetual succession

Question

What consequences flow from a company being recognised as having a separate legal personality.? (Tick all that apply)

Group of answer choices

The company cannot commit a crime

The company can own property

The company can sue and be sued

The company has perpetual succession

The company cannot make its own contracts

The members of the company have limited liability

Question

Which of the following is not an attribute of the legal personality of a registered company?

Group of answer choices

it can contract with outside parties and with its own members

its major shareholders and directors cannot be employees of it

it is liable for its own obligations like any other person

it has perpetual succession

Question

What consequences flow from a company being recognised as having a separate legal personality.? (Tick all that apply)

Group of answer choices

The company cannot commit a crime

The company can own property

The company can sue and be sued

The company has perpetual succession

The company cannot make its own contracts

The members of the company have limited liability

Which of the following is an advantage of the corporate form?

Group of answer choices

Perpetual succession

Public law obligations

Publicity

Profit sharing

Answer 1

1. Limited liability refers to the ability of a member to limit his liability.

2. The company should pay its creditors before it pays Mr Salomon

3. A shareholder who is also involved in the management of the company is not entitled to the benefit of limited liability

4. by taking no part in the management of the partnership

May be by mutual agreement or operation of law

where any event makes it unlawful to carry on partnership

death or bankruptcy of any of the partners

by any partner giving notice

by abandoning the partnership

S.35 – by application to the court

by the payment of a sum of money into Court

5. TRUE

6. its major shareholders and directors cannot be employees of it

7. The company cannot commit a crime

The company can own property

The company can sue and be sued

The company has perpetual succession

The company cannot make its own contracts

The members of the company have limited liability

8. it can contract with outside parties and with its own members

  its major shareholders and directors cannot be employees of it

9. Perpetual succession

Public law obligations

Publicity

Profit sharing