Question 1

What is meant by winding up?&#10;A) the sale of the companies assets to satisfy liabilities&#10;B) the purchase of assets to increase liabilities&#10;C) the delay in satisfying debts&#10;D) the purchase of company timepieces

Accepted Answer

Winding up refers to the process of selling off a company's assets in order to pay off its liabilities and ultimately liquidate the company.

Question 2

Which of the following cases is not a leading case on charges?&#10;A) Siebe Gorman v Barclays&#10;B) O'Neil v Phillips&#10;C) Re New Bullas Trading&#10;D) Agnew v Commissioner of Inland Revenue

Accepted Answer

O'Neil v Phillips is not a leading case on charges; it is primarily concerned with the principles of unfair prejudice in company law.

Question 3

A person appointed under an instrument secured over the assets of the company to manage and realise the assets for the benefit of the charge holder is called a&#10;A) receivable&#10;B) receiver&#10;C) liquidator&#10;D) administrator

Accepted Answer

A receiver is a person appointed under an instrument secured over the assets of the company to manage and realize the assets for the benefit of the charge holder. Receivers are typically appointed by secured creditors or lenders in order to protect their interests in the event of default or insolvency. Receivers have the power to manage and sell the assets of the company in order to repay the debt owed to the charge holder.

Question 4

Which of the following is not a charge?&#10;A) a loan&#10;B) a fixed charge&#10;C) a floating charge&#10;D) a mortgage

Accepted Answer

A loan is not a charge. A charge is a form of security interest created over an asset or property, while a loan is a sum of money borrowed from a lender that is expected to be paid back with interest.

Question 5

What is a charge?&#10;A) a type of electrical current&#10;B) a company asset&#10;C) a loan security&#10;D) a type of creditor

Accepted Answer

A charge is a type of security that a lender can take over a borrower's assets to protect itself in case the borrower defaults on a loan. It is not related to electrical current, company assets, or creditors.

Question 6

Who is considered a secure creditor?&#10;A) a creditor with a proprietary interest over company assets&#10;B) a creditor with a contractual interest over company assets&#10;C) a creditor of a well run company&#10;D) a wealth creditor

Accepted Answer

A secure creditor is one who has a proprietary or security interest over company assets. This means that they have a legal claim over a specific asset, such as a property or equipment, and can seek repayment of their debt by seizing and selling that asset if the borrower defaults on their loan. A contractual creditor, on the other hand, only has a claim to the borrower's general assets and does not have the same level of security. Being a well-run company or a wealth creditor does not necessarily make a creditor secure.

Question 7

What is a winding up order?&#10;A) an order to consider liquidation&#10;B) a shareholders' decision to liquidate the company&#10;C) a director's decision to liquidate the company&#10;D) a court order to liquidate the company

Accepted Answer

A winding up order is a court order to liquidate a company. It is generally obtained by a creditor who is owed a significant amount of money by the company and has exhausted all other options for recovering the debt. Once the winding up order is granted, a liquidator is appointed to sell the assets of the company and distribute the proceeds to creditors in a specific order of priority. The company is then dissolved and ceases to exist.

Question 8

Which of the following is not a type of winding up?&#10;A) spontaneous winding up&#10;B) voluntary winding up&#10;C) compulsory winding up&#10;D) insolvent winding up

Accepted Answer

Spontaneous winding up is not a recognized type of winding up. The three recognized types of winding up are voluntary winding up, compulsory winding up, and insolvent winding up.

Question 9

What is meant by liquidation?&#10;A) the delay in satisfying debts&#10;B) the purchase of assets to increase liabilities&#10;C) the same as winding up&#10;D) the purchase of liquid assets

Accepted Answer

Liquidation is the process of selling off all the assets of a company and using the proceeds to satisfy its debts. This is often done when a company is unable to pay its debts and is forced to cease operations, which is known as "winding up." Therefore, option C is the most appropriate description of liquidation.

Question 10

What is meant by crystallisation?&#10;A) when a fixed charge becomes a floating charge&#10;B) when the company assets are frozen&#10;C) when the company assets are sold&#10;D) when a floating charge becomes a fixed charge

Accepted Answer

Crystallisation refers to the process where a floating charge becomes a fixed charge, giving security to the lender over specific assets of the company.

Deck 16: Criminal Damage