Question 1

Who is considered to be a sole trader?&#10;A) any individual in business on their own account&#10;B) the sole shareholder in a company&#10;C) the person tasked with managing the company&#10;D) anyone outside a partnership

Accepted Answer

A sole trader is any individual who runs a business on their own account, without the involvement of partners or shareholders.

Question 2

Which of the following is not a type of European business organisation?&#10;A) European Private Limited Liability Company (SPE)&#10;B) European Public Limited Liability Company (SE)&#10;C) European Economic Interest Group (EEIG)&#10;D) European Limited Partnership (ELP)

Accepted Answer

European Limited Partnership (ELP) is not a type of European business organisation. The other options, European Private Limited Liability Company (SPE), European Public Limited Liability Company (SE), and European Economic Interest Group (EEIG) are all recognized forms of business organizations in Europe.

Question 3

Community interest companies are subject to&#10;A) a community interest test&#10;B) an affordability test&#10;C) an environmental sustainability test&#10;D) an incorporation test

Accepted Answer

Community interest companies (CICs) are subject to a community interest test, which ensures that their activities benefit the community or a specific group of people, and that any profits made are reinvested back into the community or the company's stated objectives.

Question 4

Which of the following is not a characteristic of an unincorporated association?&#10;A) it is a legal entity&#10;B) it has identifiable membership&#10;C) it has a constitution&#10;D) it has an existence distinct from it members

Accepted Answer

An unincorporated association is not a legal entity, meaning it cannot sue or be sued in its own name. Instead, the members of the association would need to bring any legal action in their own individual capacities. The other characteristics listed (identifiable membership, constitution, existence distinct from its members) are typically associated with unincorporated associations.

Question 5

Which of the following is not a characteristic of registered companies?&#10;A) separate legal personality&#10;B) limited liability&#10;C) transferable shares&#10;D) recourse to shareholder assets on winding up

Accepted Answer

Registered companies have limited liability, separate legal personality, and transferable shares. Shareholder assets are not typically used to settle company debts on winding up, so recourse to shareholder assets is not a characteristic of registered companies.

Question 6

Which of the following types of business can be listed on the stock market?&#10;A) community interest company&#10;B) public limited company&#10;C) private company limited by shares&#10;D) limited partnership

Accepted Answer

The answer of Which of the following types of business...

Question 7

A company whose members undertake to contribute a specified amount on a winding up is a&#10;A) company limited by shares&#10;B) company limited by guarantee&#10;C) unincorporated company&#10;D) public limited company

Accepted Answer

A company limited by guarantee is a type of company where the members undertake to contribute a specified amount towards the company's debts in case of winding up, instead of owning shares in the company. This structure is often used for non-profit and charitable organizations.

Question 8

George and John run a shop together. The do not wish a formal separation between their private and business interests. The most suitable legal vehicle for them would be&#10;A) a private limited company&#10;B) a public limited company&#10;C) a limited partnership&#10;D) a partnership

Accepted Answer

George and John want to maintain a close relationship between their private and business interests, which is best achieved through a partnership. A partnership is a type of business structure where two or more individuals share ownership and management responsibilities. Partnerships have less formalities and legal requirements compared to companies, making it easier for George and John to operate their business. Additionally, partnerships offer tax benefits and the flexibility to distribute profits as per the partners' agreement. A private limited company and a public limited company involve more formalities and legal requirements and may not meet George and John's needs. A limited partnership involves having one or more general partners and at least one limited partner, which may not align with George and John's vision of a partnership where they share equal responsibilities and interests.

Question 9

The effect of a partnership is that&#10;A) all partners share in profits, but not debts&#10;B) profits and debts are borne by the partnership, not individuals&#10;C) all partners are equally liable for the debts of the business&#10;D) all liabilities are considered the same as those of a company

Accepted Answer

In a partnership, all partners have unlimited liability, meaning they are all equally responsible for any debts or liabilities incurred by the business. This means that if the partnership is unable to pay its debts, creditors can go after the personal assets of the partners to satisfy those debts. Therefore, while all partners share in the profits of the partnership, they also share in the risks and liabilities.

Question 10

What is the proposal for a European Foundation (FE) about?&#10;A) It is to be an organisation focused on promoting the public benefit&#10;B) it is to be an umbrella organisation for charities&#10;C) it is a European charity&#10;D) it is a pro-European think-tank

Accepted Answer

The proposal for a European Foundation (FE) is about creating an organization focused on promoting the public benefit by providing funding and support for initiatives that address social, cultural, and environmental issues in Europe. It is not specifically an umbrella organization for charities or a pro-European think-tank, although it may work with these types of organizations as part of its mission.

Deck 2: Actus Reus