Question

QUESTION 14

1. Which of the following statements is the most accurate description of limited liability?

   	A.	In a company limited by shares, shareholder who holds a share in the company is not liable beyond any amount outstanding on partly paid shares.
   	B.	In a company limited by shares, a company has limited liability for their debts.
   	C.	A company is a separate legal entity from its directors, so directors are always shielded from the company's losses.
   	D.	A and B above.
   	E.	None of the above.

1 points   

QUESTION 15

1. Which of the following is the best description of the significance of the decision in Salomon v Salomon & Co Ltd?

   	A.	The notion of limited liability should not apply to corporations owned and operated by a single person.
   	B.	The concept of separate legal personality cannot be used by a sole trader to avoid liability to creditors.
   	C.	A shareholder who is also involved in the management of the company is not entitled to the benefit of limited liability
   	D.	The doctrine of separate legal personality continues to operate, even where a company is effectively controlled by a single shareholder.
   	E.	None of the above

1 points   

QUESTION 16

1. Annual general meetings agenda is governed by s. 250R. This provision requires:

   		That an annual general meeting is to be held to consider the company s annual financial report.
   		That an annual general meeting is to be held to elect directors.
   		That an annual general meeting is to be held to appoint the auditor.
   		All of the above.
   		None of the above.

1 points   

QUESTION 17

1. In which of the following circumstances is a company most likely to choose to rely on the replaceable rules?

   	A.	Where it is going to list on ASX.
   	B.	Where the company was incorporated prior to 1 July 1998.
   	C.	Where a proprietary company is registered that may wish to convert to a public company in the future.
   	D.	Where the company proposes to issue partly paid shares.
   	E.	None of the above.

Answer 1

14. (d) A and B above.

Both these conditions hold true for the limited liability. Shareholders are just liable for the their limited debts and the amount remaining unpaid on their party pid up shares.

15. (d) the doctrine of separate legal personality continues to operate , even where a company is effectively controlled by a sngle shareholder

The ruling of Salmon vs salmon & Co. ltd stated that the compny has a separate legal entity and the rights and obligations of a company are totally different to the shareholders rights and obligations.

16. All of the above

The Agenda of the annual meeting governed by s. 250R includes all the above agenda to be taken up in the Annual General meting.

17. (d) where the comapny proposes to issue partly paid shares.

Replacable rules are not applicable in the other three situations. It does not apply to a sole proprietor and to company incorporated before july 1, 1998. Also the listing reuirements of ASX does not require the replaceable rules.