Question 1

The most common reason for business failure is:

Accepted Answer

A) the global recession. 
B) financial mismanagement. 
C) government over-regulation. 
D) inflation. 
A) the global recession. 
B) financial mismanagement. 
C) government over-regulation. 
D) inflation.

Question 2

A voluntary winding up of a company officially commences when:

Accepted Answer

A) the company becomes insolvent. 
B) the shareholders pass a special resolution to the effect that the company should be wound up. 
C) the shareholders appoint a liquidator to wind up the company. 
D) the shareholders appoint a receiver to wind up the company. 
A) the company becomes insolvent. 
B) the shareholders pass a special resolution to the effect that the company should be wound up. 
C) the shareholders appoint a liquidator to wind up the company. 
D) the shareholders appoint a receiver to wind up the company.

Question 3

Which of the following is not one of the rights and obligations of the trustee in bankruptcy?

Accepted Answer

A) To become the legal owner of all of the bankrupt's assets. 
B) To take ownership of any of the bankrupt's property that is acquired by the bankrupt after the commencement of the bankruptcy. 
C) To take control of all of the bankrupt's money and superannuation already paid to her. 
D) To become the legal owner of any property disposed of by the bankrupt to family members in the 4 years prior to bankruptcy. 
A) To become the legal owner of all of the bankrupt's assets. 
B) To take ownership of any of the bankrupt's property that is acquired by the bankrupt after the commencement of the bankruptcy. 
C) To take control of all of the bankrupt's money and superannuation already paid to her. 
D) To become the legal owner of any property disposed of by the bankrupt to family members in the 4 years prior to bankruptcy.

Question 4

The bankruptcy process is initiated by means of:

Accepted Answer

A) an insolvent person's petition. 
B) a secured creditor's petition. 
C) a creditor or a debtor's petition. 
D) the official receiver or trustee's petition. 
A) an insolvent person's petition. 
B) a secured creditor's petition. 
C) a creditor or a debtor's petition. 
D) the official receiver or trustee's petition.

Question 5

An administrator investigates the company's circumstances and advises the:

Accepted Answer

A) directors. 
B) shareholders. 
C) creditors. 
D) debtors. 
A) directors. 
B) shareholders. 
C) creditors. 
D) debtors.

Question 6

If the partners in a limited duration partnership continue to conduct business together after the expiry of the duration, the partnership will:

Accepted Answer

A) automatically dissolve. 
B) be a 'partnership at will'. 
C) have perpetual succession. 
D) be wound up by a court. 
A) automatically dissolve. 
B) be a 'partnership at will'. 
C) have perpetual succession. 
D) be wound up by a court.

Question 7

The process of liquidating a company involuntarily is usually initiated by:

Accepted Answer

A) a creditor. 
B) a debtor. 
C) a shareholder. 
D) a director. 
A) a creditor. 
B) a debtor. 
C) a shareholder. 
D) a director.

Question 8

A receiver:

Accepted Answer

A) oversees the winding up of a company. 
B) manages the debtor's assets or business with a view to ensuring repayment of the debt. 
C) distributes the estate of a bankrupt individual. 
D) is the same thing as a liquidator. 
A) oversees the winding up of a company. 
B) manages the debtor's assets or business with a view to ensuring repayment of the debt. 
C) distributes the estate of a bankrupt individual. 
D) is the same thing as a liquidator.

Question 9

An alternative to liquidation is:

Accepted Answer

A) a Part X arrangement. 
B) voluntary administration. 
C) a Part IX arrangement. 
D) bankruptcy. 
A) a Part X arrangement. 
B) voluntary administration. 
C) a Part IX arrangement. 
D) bankruptcy.

Question 10

Which of the following documents need not be filed with the Official Receiver at Insolvency and Trustee Service Australia (ITSA) in order for a person to become bankrupt voluntarily?

Accepted Answer

A) A personal insolvency agreement. 
B) A debtor's petition. 
C) A statement of affairs. 
D) A formal acknowledgement that the debtor has read the prescribed information. 
A) A personal insolvency agreement. 
B) A debtor's petition. 
C) A statement of affairs. 
D) A formal acknowledgement that the debtor has read the prescribed information.

Question 11

A document prepared by a creditor that sets out the amount owed by the debtor and is lodged with the trustee in bankruptcy is called a:

Accepted Answer

A) bankruptcy notice. 
B) proof of debt. 
C) creditor's petition. 
D) debtor's petition. 
A) bankruptcy notice. 
B) proof of debt. 
C) creditor's petition. 
D) debtor's petition.

Question 12

Which of the following statements is not true of 'voluntary administration' under the Corporations Act 2001?

Accepted Answer

A) It refers to a voluntary winding up by a company's shareholders. 
B) It provides the company a temporary 'safety zone' away from creditors. 
C) It commences when an administrator is appointed. 
D) It is an alternative to liquidation. 
A) It refers to a voluntary winding up by a company's shareholders. 
B) It provides the company a temporary 'safety zone' away from creditors. 
C) It commences when an administrator is appointed. 
D) It is an alternative to liquidation.

Question 13

The potential legal consequences for a company experiencing serious financial difficulty do not include:

Accepted Answer

A) receivership. 
B) liquidation. 
C) voluntary administration. 
D) bankruptcy. 
A) receivership. 
B) liquidation. 
C) voluntary administration. 
D) bankruptcy.

Question 14

A 'void charge' is a charge granted by the company that is:

Accepted Answer

A) not enforceable against a liquidator. 
B) voidable. 
C) reversible. 
D) uncommercial or unfair. 
A) not enforceable against a liquidator. 
B) voidable. 
C) reversible. 
D) uncommercial or unfair.

Question 15

Bankruptcy proceedings are heard by:

Accepted Answer

A) the District Court. 
B) the Federal Court. 
C) the Supreme Court. 
D) the High Court. 
A) the District Court. 
B) the Federal Court. 
C) the Supreme Court. 
D) the High Court.

Question 16

Which of the following categories of persons is not generally entitled to appoint a receiver?

Accepted Answer

A) An unsecured creditor 
B) The holder of a floating charge over all of the business assets 
C) A mortgagee 
D) A secured creditor 
A) An unsecured creditor 
B) The holder of a floating charge over all of the business assets 
C) A mortgagee 
D) A secured creditor

Question 17

Which of the following acts on the part of a bankrupt person is not a bankruptcy offence?

Accepted Answer

A) Giving an unfair preference 2 years prior to becoming bankrupt. 
B) Borrowing more than a prescribed amount of money without disclosing their status as an undischarged bankrupt. 
C) Becoming a director of a company without court permission. 
D) Gambling money in the 2 years prior to becoming bankrupt. 
A) Giving an unfair preference 2 years prior to becoming bankrupt. 
B) Borrowing more than a prescribed amount of money without disclosing their status as an undischarged bankrupt. 
C) Becoming a director of a company without court permission. 
D) Gambling money in the 2 years prior to becoming bankrupt.

Question 18

A 'debtor's petition' is:

Accepted Answer

A) an application by an insolvent person to make themselves bankrupt voluntarily. 
B) an application by one or more creditors for an order that the debtor be made bankrupt involuntarily. 
C) an application by an insolvent person to oppose an application for bankruptcy. 
D) an application by a secured creditor that a debtor's company goes into receivership. 
A) an application by an insolvent person to make themselves bankrupt voluntarily. 
B) an application by one or more creditors for an order that the debtor be made bankrupt involuntarily. 
C) an application by an insolvent person to oppose an application for bankruptcy. 
D) an application by a secured creditor that a debtor's company goes into receivership.

Question 19

Lodging a declaration of intention to present a debtors petition is not a good option for a debtor who wants to:

Accepted Answer

A) take some time to negotiate with creditors. 
B) have a short cooling off period to consider her options. 
C) stop creditors from taking action to recover a debt for 7 days. 
D) prevent a creditor from proving at a later stage that it is appropriate for the debtor to be made bankrupt. 
A) take some time to negotiate with creditors. 
B) have a short cooling off period to consider her options. 
C) stop creditors from taking action to recover a debt for 7 days. 
D) prevent a creditor from proving at a later stage that it is appropriate for the debtor to be made bankrupt.

The most common reason for business failure is:

A voluntary winding up of a company officially commences when:

Which of the following is not one of the rights and obligations of the trustee in bankruptcy?

The bankruptcy process is initiated by means of:

An administrator investigates the company's circumstances and advises the:

If the partners in a limited duration partnership continue to conduct business together after the expiry of the duration, the partnership will:

The process of liquidating a company involuntarily is usually initiated by:

A receiver:

An alternative to liquidation is:

Which of the following documents need not be filed with the Official Receiver at Insolvency and Trustee Service Australia (ITSA) in order for a person to become bankrupt voluntarily?

A document prepared by a creditor that sets out the amount owed by the debtor and is lodged with the trustee in bankruptcy is called a:

Which of the following statements is not true of 'voluntary administration' under the Corporations Act 2001?

The potential legal consequences for a company experiencing serious financial difficulty do not include:

A 'void charge' is a charge granted by the company that is:

Bankruptcy proceedings are heard by:

Which of the following categories of persons is not generally entitled to appoint a receiver?

Which of the following acts on the part of a bankrupt person is not a bankruptcy offence?

A 'debtor's petition' is:

Lodging a declaration of intention to present a debtors petition is not a good option for a debtor who wants to:

Business and the Law

The Australian Legal System

Politicians and Judges

How to Find, Understand and Use the Law

Deliberately Causing Harm

Carelessly Causing Harm

Contract Law: Formation of the Contract

Contract Law: Terms of the Contract

Contract Law: Enforcement of the Contract

Contract Law: Working With Agents

Dealing With Consumers

Dealing With Competitors

Protecting Ip

Managing a Business: Start-Up

Managing a Business: Business Ownership

Managing a Business: Companies and Corporate Governance

Managing a Business: Making Payments and Recovering Debts

Managing a Business: Insurance and Taxes

Managing a Business: Employing Workers

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Exam 20: Managing a Business: Closing Down

The most common reason for business failure is:

A voluntary winding up of a company officially commences when:

Which of the following is not one of the rights and obligations of the trustee in bankruptcy?

The bankruptcy process is initiated by means of:

An administrator investigates the company's circumstances and advises the:

If the partners in a limited duration partnership continue to conduct business together after the expiry of the duration, the partnership will:

The process of liquidating a company involuntarily is usually initiated by:

A receiver:

An alternative to liquidation is:

Which of the following documents need not be filed with the Official Receiver at Insolvency and Trustee Service Australia (ITSA) in order for a person to become bankrupt voluntarily?

A document prepared by a creditor that sets out the amount owed by the debtor and is lodged with the trustee in bankruptcy is called a:

Which of the following statements is not true of 'voluntary administration' under the Corporations Act 2001?

The potential legal consequences for a company experiencing serious financial difficulty do not include:

A 'void charge' is a charge granted by the company that is:

Bankruptcy proceedings are heard by:

Which of the following categories of persons is not generally entitled to appoint a receiver?

Which of the following acts on the part of a bankrupt person is not a bankruptcy offence?

A 'debtor's petition' is:

Lodging a declaration of intention to present a debtors petition is not a good option for a debtor who wants to:

Business and the Law

The Australian Legal System

Politicians and Judges

How to Find, Understand and Use the Law

Deliberately Causing Harm

Carelessly Causing Harm

Contract Law: Formation of the Contract

Contract Law: Terms of the Contract

Contract Law: Enforcement of the Contract

Contract Law: Working With Agents

Dealing With Consumers

Dealing With Competitors

Protecting Ip

Managing a Business: Start-Up

Managing a Business: Business Ownership

Managing a Business: Companies and Corporate Governance

Managing a Business: Making Payments and Recovering Debts

Managing a Business: Insurance and Taxes

Managing a Business: Employing Workers

Filters