This is a full set of the revision notes I made when I was preparing for the first sitting of SQE1 in November 2021. I passed both FLK1 and FLK2 with a score of 81 and 84 respectively. The notes covers all the topics tested in SQE1, i.e.:
Business Law and Practice
Dispute Resolution
Contract...
Table of Contents
Business Law and Practice.......................................................................................................2
Dispute Resolution................................................................................................................12
Contract Law.........................................................................................................................14
Tort Law................................................................................................................................21
The Legal System...................................................................................................................28
Human Rights........................................................................................................................31
Solicitors Accounts.................................................................................................................33
Land Law...............................................................................................................................34
Property Practice...................................................................................................................41
Wills / Administration of Estates...........................................................................................48
Criminal Law and Practice.....................................................................................................52
1
This is a full set of the revision notes I made when I was preparing for the first sitting of SQE1 in November 2021.
The notes were originally made just for my own reference. While I passed the SQE in quintile 1, there is no
guarantee that every detail of this set of notes is accurate. You should read these notes as a guidance for your
revision. Always refer back to your textbooks for the most accurate and up-to-date position of the law. As I am
working a full-time job, I spent little time polishing the notes before putting them on eBay, so please forgive any
typos.
D: Director
WR: written resolution
GM: general meeting
OR: ordinary resolution
SR: special resolution
Co: Company
Bus: business
General
PLC: Public limited company
Company Secretary - Ltd may have. PLC must have.
⁃ Have ostensible authority
Statutory derivative action
⁃ 1. Prima facie case (only on applicant’s evidence)
⁃ 2. Person with duty to promote success of company - would he seek to continue?
Unfair prejudice petition / Just and equitable winding up (JEWU)
Principle of reflective loss
⁃ Shareholder cannot sue a wrongdoer to recover losses reflecting loss sustained
by company
AGM
⁃ Private Co: no longer needed, but removal of Ds/ auditors before end of term
—> need resolution at meeting
⁃ Need 28 days’ notice of motion before meeting
⁃ Cannot be done by written resolutions (WR)
⁃ D has right to be heard
⁃ 5% members can requisition a GM
⁃ Must call GM in 21 days; hold within 28 days of notice convening meeting
14 clear days’ notice for GM
21 clear days’ for AGM
⁃ Can shorten notice with 90% members for LTD / 95% for PLC
⁃ For AGM of PLC —> need 100% to abridge notice period
Exemption of D liability / indemnity (unless insurance) - void in articles
Appointment of D
⁃ PLC - appointment of 2 or + persons as Ds by single resolution at GM is void,
unless unanimous agreement
Company Loan to D
⁃ Need OR
⁃ If loan to D of HoldCo - need ORs from both parent and sub
⁃ Exceptions:
⁃ Less than 50k,
⁃ Loan for duties related to company
—
D duty to promote success includes:
⁃ Employees
⁃ Community and environment
⁃ Quality
⁃ Relationship with suppliers
Declaration of interest
⁃ General - if D is member of another company (transaction with company A)
⁃ Specific and each time - if D is also D of another co
—> if conflict - need approval of rest of board, not just sit out
Ds forbidden to receive benefits, unless so minor not to sway
Substantial NON-CASH ASSET transaction —> need OR
⁃ If more than 100k
⁃ Or more than 10% NAV if asset is over 5k
⁃ If Co contracts with D of parent co - need OR
⁃ Also applies to family / trust / Ps
Loan transactions:
⁃ Not required OR if:
⁃ Emet expenditure of business / perform duties - if Not exceed 50k
⁃ Small loans. / credit not exceeding 10k
⁃ Proceedings re work
Ds service contract
⁃ Co needs to keep copy for 1 year after expiration
⁃ Members can inspect and get copy
⁃ No duty to inspect AOA when transacting with co - no constructive notice
⁃ Not apply if counter party is a D of the company, or a company 20% controlled by
a D.
—> irregular contract
—> D is personally liable to account for gain & indemnify co of loss
Wrongful trading
⁃ No reasonable prospects of avoiding insolvency
⁃ Every step to minimise loss to creditors
D’s WR has to be unanimous; SH’s doesn’t have to be
⁃ Partners (Ps) – each agent of firm and agent of co-partners, can bind if “act for
usual way of business of the kind carried by the firm”
Not bind if not “usual” business – or (i) no actual authority and (ii) if CP knows no
authority / does not believe he is a P
A partner pledging Credit of firm (not relevant to business - not bind firm unless
specifically authorised; personally liable
⁃ Apparent authority:
1. Need to be connected with bus
2. Outsider knows / believe dealing with a P
NOT apply when: deed / guarantee / accepting debt at discount / land / arbitrate
⁃ Partnership at will – terminates on death
⁃ Fiduciary duties to each other – utmost good faith and disclosure
S. 29 – profit from transactions re P = account
Applies upon death until affairs wound up
⁃ Assignee of share of Pship
Only right to share provide, not management. Must accept account
⁃ Not to compete
If not in same business and not restricted under agreement – no need to account profits
from side hustle
⁃ Implied financial terms
Share equal profits; if unequal contribution to capital withdraw unequally
No interest on capital ; only 5% on loans ; no remuneration
Every P can take part in management but can be varied
All must consent to intro of new P
Ordinary matters – majority vote regardless of capital contribution; following consultation
+ good faith
Fundamental change – unanimity
Power to inspect books at place of business
⁃ Each partner jointly liable for all
If insufficient partnership property – can go after each, after personal debt paid in full
⁃ Tort – binds partnership if in scope of usual activities
⁃ Variation of P terms – consent of all, implied or express
⁃ Incoming P – not liable for earlier liabilities
⁃ Retiring partner
Give notice in Gazette
Liable for post-retirement if hold out as P or didn’t give proper notice – so usually sign
deed of retirement – indemnify post-R liabilities
⁃ Expulsion – majority cannot expel unless express
⁃ Dissolution
Any P can dissolve by notice; unless retrained under express terms
Auto dissolve on death / bankruptcy of ONE P – usually partnership agreement (PA)
says share will go to remainder upon payment
By Court
Another P conducts – prejudicial to bus (not moral conduct unless affect bus)
Persistent breach of P agreement
Delay termination will increase loss
Just and equitable – deadlock,
After dissolution, Ps still have continuing authority to bind Ps for winding up
should give notice at London Gazette
LLPs
⁃ Not a taxable person
⁃ Minority protection in CA2006 applies
⁃ LLP itself liable for debts in running of business – but personal liability if negligent
(together with LLP)
⁃ Not for charity
⁃ If LLP reduce to 1 person, and continues to trade, after 6 months – that person
becomes personally liable if he knew just he is left
⁃ LLPs must respond to request for LLP particulars in 5 working days
⁃ Accounting records – keep 3 years at reg office / fitting place – open to
inspection by LLP members
⁃ Insolvency – court can order repayment of withdrawals 2 years before winding
up, if the withdrawal increased risk of insolvency
⁃ Designated members – need at least 2; if no / less than 2 – all become DMs –
stat responsibilities – can case to be with other members consent
⁃ Members are agent of LLP, not to co-members
⁃ Cessation – member gives notice to other members + notice filed with Registrar
⁃ Salaried member rules apply if
Fixed salary / variable but not ref to P&L
No significant control
Contribution to LLP less than 25% disguised salary in the tax year
⁃ Fiduciary duty by members to LLP (when and insofar as acting as agent); not
between members
If corporate member – FD to LLP overrides FD to appointor (eg company asked Rep A
to vote against; Rep A thinks best interest is to vote for. Need to vote for LLP)
CVA - (i) simple majority of SH; and (ii) 75% in value of unsecured creds or more
Scheme - (i) a majority in number, (ii) representing 75% value or more
Restructuring plan - just by value 75%
1. Dissenting class would not be any worse off than in relevant alternative (RA)
2. 75% of creds / members with genuine economic interest in RA, still voted in
favour
Compulsory liquidation
⁃ Sb with locus - a creditor petition to court / company itself by SR (rare)
⁃ Petitioner needs to Gazette for 14 days
⁃ Hearing in 14 days
⁃ —> OR until creditors appoint a private liquidator
⁃ Power of Ds cease; employees dismissed
MVL
⁃ SR of members + solvency declaration - sent to CH 15 days
⁃ Gazette within 14 days
CVL
⁃ Unable to pay debts
⁃ + SR of members - within 14 days Creditors meeting; 7 days notice; one D to
chair
⁃ Gazette + 2 newspapers 14 days
⁃ 15 days CH
Wrongful trading
⁃ If D knew / ought to have known no reasonable prospects
⁃ “Every step” Defence: knew no reas prospect; but took every step to minimise
loss for creditors
Transaction at Undervalue
⁃ 2 years
Preference
Can set aside a preference (putting a cred in better position than if he’ll be in if in
insolvent liquidation) if
⁃ 6 months
⁃ If connected - 2 years
Petition
⁃ On petition – debtor cannot dispose of assets otherwise void
OR takes over on bankruptcy order
⁃ Can request statement of affairs within 21 days
Family home
⁃ Trustee in bankruptcy can use it or lose it – 3 years
Transaction at undervalue (gift)
⁃ 5 years if at that time already insolvent / because of that insolvent
⁃ 2 year – regardless of solvency
Preference – need to show intention to prefer
⁃ 6 months if unconnected
⁃ 2 years if connected
Defraud creditors
⁃ Apply limitation act
⁃ 6 years if money
⁃ 12 years if other assets
Discharge
⁃ On 1st anniversary of commencement of bankruptcy unless court suspends
⁃ Asset realisation and distribution doesn’t cease
⁃ Bankruptcy restrictions order – from 2 – 15 years – if behavious is reckless
Debt Relief Order
⁃ Debts of 20k
⁃ Assets of 1k
⁃ Disposable income of 50£
Accounts
⁃ Annual accounts and reports
⁃ Approved by board, signed on BS
⁃ Send copies to SH no later than filing at CH; 8 months from end of accounting
period
10
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