Deck 3: Mens Rea

Question 1

Which of the following is not a consequence of incorporation?

A) the company can own property
B) the company can be party to a contract
C) the company can commit a crime
D) the company has a lifespan of 70 years

Answer 1

D

Question 2

A company differs from an individual in that

A) it has owners
B) it can be a signatory to contracts
C) it can purchase property
D) it can be the victim of a tort

Answer 2

A

Question 3

A limited company differs from an unlimited one in that

A) it can own property
B) it has owners
C) it can be a signatory to contracts
D) the owners do not need to contribute funds beyond their original share purchase

Answer 3

D

Question 4

Which of the following is not a justification of limited liability?

A) encourages investment by members of the company
B) encourages investment by creditors
C) facilitates the transferability of shares
D) offers clarity as to the assets of the company

Question 5

Under which circumstances will a parent company become liable for the acts of a subsidiary?

A) when it directly controls the actions of the subsidiary
B) when it indirectly controls the actions of the subsidiary
C) when it owns a majority stake in the subsidiary
D) when it owns a minority stake in the subsidiary

Question 6

What is the statutory lifespan of a limited company?

A) unlimited
B) limited to 50 years
C) limited to 70 years
D) limited to the life of its directors

Question 7

Can a shareholder buy insurance on company assets?

A) yes
B) no
C) yes, if he is a sole shareholder
D) yes, if he is a majority shareholder

Question 8

A creditor worried about the solvency of a company can take which of the following actions?

A) review company information on Companies House
B) obtain a credit reference for the company
C) obtain a personal guarantee from company directors
D) all of the above