BLAW211 STUDY TEST QUESTIONS WITH COMPLETE SOLUTIONS
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Course
BLAW211
Institution
BLAW211
BLAW211 STUDY TEST QUESTIONS WITH COMPLETE SOLUTIONS
legal partnership - Answer-- existence of an agreement
- existence of a business
- sharing profits ETC...
capacity of a company - Answer-A company has the full capacity to carry on or undertake any business or activity, do any act, or ente...
BLAW211 STUDY TEST QUESTIONS
WITH COMPLETE SOLUTIONS
legal partnership - Answer-- existence of an agreement
- existence of a business
- sharing profits
ETC...
capacity of a company - Answer-A company has the full capacity to carry on or
undertake any business or activity, do any act, or enter into any transaction and full
rights, powers and privileges
company power: Express powers - Answer-express powers are all powers expressly
given by statue including to sue and be sued in the corporate name, to purchase etc.
Company power: implied powers - Answer-implied powers and powers that extend
beyond original powers granted to a company through statute and its article of
incorporation eg: power to declare war
General Partnership - Answer-partnership in which partners share equally in both
responsibility and liability
limited partnership - Answer-form of partnership where one or more partners are not
active in the daily running of the business, and whose liability for the partnership's debt
is restricted to the amount invested in the business
partnership agreement - Answer-a written agreement among all owners
consequences of a partnership - Answer-- the liability of the partners for the debts of the
business is unlimited
- each partner is jointly and severally liable for the partnership debt (their share and all
debts)
- risk of disagreements among partners and management
- if partners join or leave you will have to value all the partnership assets and this can be
costly
- future selling complications
consequences of a company - Answer-- high administrative costs
- reporting requirements can be complex
- if directors fail to meet their legal obligations, they may be held personally liable for the
company's debt
- profit distributed to shareholders are taxable
, directors responsibilities - Answer-- determining companys strategic objectives and
policy
- monitoring progress towards achieving the objectives and policy
- appointing senior management
- accounting for the companies activities to relevant parties (eg: shareholders)
directors duties - Answer-- determining and implementing policies and making decisions
- preparing an filling statutory documents with the companies office or other agencies
- calling meetings, including an annual meeting of shareholders
maintaining and keeping records
- company constitution may set additional duties & responsibilities
obligations as a director - Answer-as a director you must act honest, in the best interest
of the company, and with reasonable care at all times
- act in good faith and in the best interest
- not allowing, agreeing or causing the business to be carried out in a way likely to
create a substantial. risk of serious loss to the company's creditors
- ensuring the company can pay all its debts and has more assets than liabilities
- complying with the companies act
Risks that directors face - Answer-all company directors should ensure they are aware
of potential personal liabilities, act accordingly and consider ways in which to protect
themselves legally
- health and safety
- bribery act
- insolvency
- wrongful trading
there are many more that can result in directors facing massive fines or even fail time. in
order to avoid directors must stay up to date with the law and act with honesty, integrity
and reasonableness at all times. this can constitute a defence
minority shareholders rights under companies act 1993 - Answer-under the companies
act 1993, every minority shareholder in a company has the right to seek relief from the
court if it feels its rights have been unfairly prejudiced or if they believe the officers of
the court have been conducting the affairs of the company in a manner that is unfairly
discriminatory or prejudicial to their interest
how minority shareholders sell or leave - Answer-company's shareholder agreement will
set out rules and processes for what happens when shareholders leave or sell but two
main rights
- drag along
- tag along
Drag-Along Rights - Answer-drag along rights enable a majority shareholders for force a
minority shareholder to join the sale of shares as well.
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