Business and Company Law MCQs

Â£100 reward for the return of Fluffy my pet cat is what type of of contract?

unilateral
bilateral

Which of these is not a type of misrepresentation?

Innocent
Harmless
Negligent
Fraudulent

The law recognises only natural persons.

True
False

Fisher v Bell concerned what item in a shop window?

Silver Spoon
Puppy
Bird
Flick knife

The case Greenclose Ltd v National Westminster Bank Plc [2014] concerned which method of 'near instantaneous' communication?

Telex
Fax
Letter
Email

S 176 of the Companies Act 2006 provides for the :

Duty to exercise independent judgement
Duty to exercise reasonable care, skill and diligence
Duty not to accept benefits from third parties
Duty to declare interest in proposed transaction or arrangement

Who is the offeree?

person to whom an offer has been made
A person who makes an offer to another
A person who makes a proposal to another
The claimant

An offer must be:

Clear and not certain
Not clear and certain
Clear and certain

Which of these is a type of trading structure?

Sole Partnership
Sole Company
Sole Trader
Sole Corporation

which one does Contract law involve?

Legally binding agreements
Imposition of standards of behaviour
Restitution
Lost benefits

Regarding company law, model articles of association apply in the absence of bespoke articles being provided on registration:

true
false

Does a company must have articles of association?

Yes
No

Which of the following would be a disadvantage of setting up your business as a limited company?

Perpetual succession
Formal process to set up
Separate legal personality
Limited liability

Which of the following is the definition of misrepresentation?

A false statement of fact or opinion which induced the other party to enter into a binding agreement (contract).
A false statement of fact made before a contract is made.
A false statement of fact which induced the other party to enter into a binding agreement (contract).

An LLP must be incorporated.

True
False

When a contract has been agreed on the basis of a fraudulent misrepresentation, which of the following remedies is/are available?

Both damages and rescission
Damages only
An injunction only
Rescission only

Which of these is not a rule regarding consideration?

Past consideration is no consideration
Past consideration is good consideration if the parties agree
Consideration must move from the promisee
Consideration must be sufficient but need not be adequate

Which of the following best describes directors duties in general terms?

Fiduciary only
Based on mutual trust only
Statutory only
Fiduciary duties based on mutual trust and obligation

The rule in Adams v Lindsel [1818] EWHC KB J59 states that there is a legally binding contract when:

The offeror receives the letter of acceptance
The offeror rejects the letter of acceptance
The offeree expressly contracts the offeror to confirm acceptance
None of the above are correct!

The rule in Felthouse v Bindley [1862]6 LT 157 states that merely remaining silent cannot amount to an

Offer
Counter Offer
Acceptance
Unilateral Contract

What does LLP stand for?

Limited Liability Partnership
Liability Limited Partnership
Lifetime Limited Partnership

LLP's are designed for:

Professional firms, such as accountants and lawyers
Sole traders, such as small business owners
Limited partnerships, such as property developers
Charities

Prior to the Companies Act 2006 how were directors duties created?

In the Companies Act 1809
There weren't any
Members of a company made them up
Common law

Thomas v Thomas (1842) 2 QB 851 there was a legally enforceable contract because:

Consideration must be adequate but need not be sufficient
Consideration must be sufficient but need not be adequate
Consideration must be adequate and sufficient
Consideration must not be adequate and sufficient

Stilk v Myrick (1809) is authority for which legal principle?

Consideration - Performance under and existing contract is not generally good consideration
Consideration - Past consideration is not consideration
Intention - there is a rebuttable presumption that where a disagreement concerns a social arrangement there is no intention to be bound

S 172 of the Companies Act 2006 provides for the;

Duty to exercise independent judgment
Duty to promote the success of the company
Duty to exercise reasonable care, skill and diligence

Misrepresentation is not a vitiating factor.

True
False

Entores v Miles Far East Corp [1955] is authority for which point of law?

Silence is not acceptance
A negligent misrepresentation is unlawful
Acceptance is valid when communicated, i.e. when and where received
Acceptance is valid when communicated i.e when and where it is sent

An offer cannot be revoked or withdrawn until the response of the offeree is communicated?

True
False

Limited Liability Partnerships are governed by the:

Limited Liability Act 1990
Limited Liability Act 2000
Limited Liability Act 2010
Limited Liability Act 2020

Partnerships are governed by the:

Partnership Act 1890
Partnership Act 1990
Partnership Act 1690
Partnership Act 2009

Limited Partnerships are governed by the:

Limited Partnership Act 1807
Limited Partnership Act 1907
Limited Partnership Act 2007
Limited Partnership Act 2017

Which of the following statements is correct?

Consideration must be sufficient but need not be adequate.
Consideration must be adequate but need not be sufficient.
Consideration must be neither sufficient nor adequate.
Consideration can be either sufficient or adequate.

What does laissez-faire mean?

The parties cannot enter into a contract
Breach of contract
The policy of leaving things to take their own course, without interfering
Privity of contract

Which judge in Balfour v Balfour [1919] stated that 'the common law does not regulate the form of agreements between spouses?

Lord Denning
Lord Lush
Lord Bingham
Lord Atkins

Acceptance does not usually take effect until it is communicated to the:

Offeror
Offeree
Jury
Judge

In Stevenson v McLean (1880) 5 QBD 346, a telegraph from the defendant to the seller asking to pay in installments indicated that there was:

A revocation
A request for further information
A cross offer
A counter offer

The veil of incorporation is the legal assumption that;

the acts of a corporation are not the actions of its members
the acts of a corporation are the actions of its members
a company is correctly incorporated
a company is public

A private company;

Can sell its shares to the public
Cannot sell its shares to the public
Must have a trading certificate
Does not need a Director or Company secretary

Carlill v Carbolic Smokeball Co (1893) is authority for...

An offer can only be made to one person?
An offer can be made to the world?
Advertisements can only be invitations to treat?
Advertisements are always offers?

S 175 of the Companies Act 2006 provides for the;

Duty to declare interest in proposed transaction or arrangement
Duty to avoid conflicts of interest
Duty to exercise independent judgement
Duty to exercise reasonable care, skill and diligence

S 171 of the Companies Act 2006 provides for the;

Duty not to accept benefits from third parties
Duty to declare interest in proposed transaction or arrangement
Duty to exercise independent judgment
Duty to act within powers

Which one of the following is NOT a general duty?

To act to promote the success of the company for the benefit of its members.
To exercise reasonable care, skill and diligence.
To avoid conflicts of interest.
To obtain shareholder approval for substantial property transactions

Salomon v Salomon & Co Ltd (1897) is precedent for which legal principle?

Consideration must not be past
Silence is not acceptance
A limited company is a separate legal person from its members
Misrepresentation results in a voidable contract

Which one of the following statements is correct?

Consideration must be of some economic value
Consideration must not be of economic value
Consideration must be past
Consideration can be a promise to sue the other party

Which Act of Parliament concerns misrepresentation?

Misrepresentation Act 2002
Misrepresentation Act 2021
Misrepresentation Act 1967
Misrepresentation Act 1987

Which of the following are vital functions of the Registrar of Companies.?

the incorporation and dissolving of limited companies
Collecting and storing information that companies are legally obliged to provide
Ensuring that the relevant information is available to the public
All of the above

What is the correct terminology for the person who makes an offer?

Claimant
Offeror
Offeree
All of the above

Consideration must not be:

Present
Future
Past
Worth too much

The effect of misrepresentation is to make the contract:

Void
Voidable
Estopped
None of the above

The case Bisset v Wilkinson (1927)

A false statement of fact made about a petrol station
A false statement of fact made about a farm
A false statement of fact made about the Spice Girls
A false statement of fact made about a house sale

Which of the following contracts must be made in writing?

Mobile Phone
Sale of Land
Sale of Cars
All of the above

S 174 of the Companies Act 2006 provides for the;

Duty to exercise reasonable care, skill and diligence
Duty to declare interest in proposed transaction or arrangement
Duty not to accept benefits from third parties
Duty to exercise independent judgment

If a party makes a false statement of fact which is uninformed opinion this will not amount to misrepresentation, as per Bisset (1927)

True
False

S 177 of the Companies Act 2006 provides for the;

Duty not to accept benefits from third parties
Duty to exercise reasonable care, skill and diligence
Duty to declare interest in proposed transaction or arrangement
Duty to exercise independent judgement

To form a company you must submit key documents and a fee to the:

Minister of Companies
Treasurer of Companies
Commissioner of Companies
Registrar of Companies

S 17 of the Companies Act 2006 provides for a companies;

directors duties
constitution
liquidation
winding up

In order to form a legal binding contract you must have?

Offer, acceptance, consideration and intention to create legal relations
A written offer, consideration, acceptance and intention to create legal relations
Consideration, a written offer, written acceptance and intention to create legal relations.
Equitable conduct

The rule in Dickinson v Dodds (1876) 2 Ch D 463 states that a revocation of an offer can be made:

Only by the offeree himself
a stranger who eavesdrops on a conversation
A reliable third party
Only by the offeror himself

Acceptance by post is an exception to the general rule.

True
False

Which of the following are key characteristics on a Limited Liability Partnership?

It is an artificial legal entity
There must be at least two members
Members liability is limited to capital contribution
All of the above

Generally speaking contracts can be formed in which of the following ways?

Orally
Writing
Conduct
All of the above

A public limited company can be limited by;

Shares and capital
Capital and guarantee
Warranty
Shares or guarantee

What is a company?

A business that is incorporated
A business that does not have to be incorporated
A business that was a sole trader
A business that wants to become a sole trader

Limited Liability Partnerships are a hybrid between general partnerships and a limited company.

True
false

The case With v O' Flanagan (1936) concerned:

A false statement made about a the Spice Girls
A false statement made about an Iron Works
A false statement made about a petrol station
A false statement made about a the income of a medical practice

The law recognises natural and artificial legal persons

True
False

With regard to Limited Partnerships, which of the following statements is correct?

At least one partner must have unlimited liability
At least two partners must have unlimited liability
None of the partners need to have unlimited liability
All partners must have unlimited liability

What did the case Balfour v Balfour involve?

A mother and child
A husband and wife
A cat and dog
A brother and sister

Acceptance must be the mirror image of the offer.

True
False

Smith v Hughes involves?

Misrepresentation and Mistake
Murder
Assault
Invalid Consideration

A public company;

Can sell its shares to the public
Does not need PLC or Public Limited Company at the end of it's name
Does not need a trading certificate
Can be unincorporated

Two advantages of a private company are that it does not need a trading certificate or a minimum amount of capital.

True
False

In Balfour v Balfour [1999] 2 KB 571 the court stated that there was no legally binding contract between husband and wife because:

At the time, there was an intention to create legal relations
At the time, there was no intention to create legal relations
At the time, they were divorced
At the time, there was a promise to create legal relations

In Pharmaceutical Society of Great Britain v Boots Cash Chemist (Southern) Ltd [1953] EWCA Civ, the offer was made by the customer when:

The customer picked up medicine from the shelf
The customer placed the medicine in the shopping basket
The customer placed the medicine but later changed mind to buy it
The customer took the medicine to the cashier indicating that the customer wished to buy it

Which one of these statements best defines the characteristics of a sole trader?

A person who runs a business as an individual and is not personally responsible for any losses.
A person who runs a business as an individual and is personally responsible for any losses.
A person who runs a business as an individual, is personally responsible for any losses and must work alone.
A person who runs a business as an individual, is personally responsible for any losses but has limited liability.

In the absence of any contrary information partners in a general partnership:

Share equally in profits and losses
Share equally in profits
Share equally in losses
Must choose one partner to take less profit and in return that partner can take on less loss

What case is authority for the principle that the display of goods in a shop window are invitations to treat?

Stilk v Myrick (1809)
Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953)
Fisher v Bell (1960)
Hyde v Wrench (1840)

What can an LLP do?

Hold property in its own right
Enter into contracts in its own name
Sue and be sued in its own name
All of the above

S 173 of the Companies Act 2006 provides for the;

Duty to declare interest in proposed transaction or arrangement
Duty to exercise independent judgment
Duty to avoid conflicts of interest
Duty not to accept benefits from third parties

Who is the promisor?

The person who accepts the promise
The person who makes the promise
The claimant
The defendant

Which of these statutes is most applicable to company law?

The Companies Act 2000
The Companies Act 2006
The Consumer Rights Act 2015
The Consumer Rights Act 2021

The case Spice Girls Ltd v Aprilla World Service BV (2002) concerned:

A false statement made by conduct
A false statement made orally
A true statement made in writing
None of the above

The postal rule is an exception to the general rule that acceptance must be communicated.

True
false

Which statement best describes the proper purpose rule that relates to directors duties

A director of a company must exercise their powers with restraint
A director of a company must only exercise powers for the purposes for which they are conferred.
A director of a company must only exercise powers how a reasonable person would exercise them
A director of a company must not exercise powers for the purposes for which they are conferred.

If you are a sole trader you must not take on any employees

True
False

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Business and Company Law MCQs