Chapter 3 Self-test questions

. Which of the following is not a method of incorporation?

Incorporation by delegated authority

Incorporation by royal charter

Incorporation by Act of Parliament

Incorporation by court order

Incorporation by registration

. Which of the following statements regarding unregistered companies are correct?

A company incorporated by royal charter will be an unregistered company.

The Companies Act 2006 cannot apply to unregistered companies.

A company incorporated by Act of Parliament will be an unregistered company.

Unregistered companies do not have shareholders.

Unregistered companies do not have corporate personality.

A company incorporated by delegated authority will be an unregistered company.

An unregistered company is one not incorporated by registration.

Unregistered companies must have a share capital.

. Which of the following is not required to incorporate a company by registration?

The memorandum of association

The objects clause

The articles of association

The application for registration
f. The statement of compliance

. Which of the following statements regarding a company's name is not true?

A company's name needs to be approved prior to its incorporation.

A company's name cannot be longer than 160 characters.

A company can change its name by passing an ordinary resolution.

A company that does not display its registered name on its website commits an offence.

A company cannot choose a same name as another company.

The use of certain words in a company's name requires the approval of the relevant Secretary of State.

A name cannot be registered if it is offensive in the opinion of the registrar of Companies House.

. Regarding the submission of the registration documents, which of the following statements are correct?

The registrar's decision to register a company is subject to judicial review.

The registration documents must be submitted electronically.

Only public companies are issued with a certificate of incorporation.

A public company can commence business once it has been issued with a certificate of incorporation.

The registrar can refuse to register a company that is being formed for an unlawful purpose.

Once a company is validly registered, its corporate personality comes into existence.

All registered companies are granted a registration number.

The registration fee for electronic submission is less than for documents submitted in hard copy.

. What does s 51 of the Companies Act 2006 state?

Where a promoter enters into a pre-incorporation contract on behalf of an unformed company, then that contract will be void and unenforceable.

Where a promoter enters into a pre-incorporation contract on behalf of an unformed company, then, once the company is incorporated, a contract will exist between the company and the third party.

Where a promoter enters into a pre-incorporation contract on behalf of an unformed company, a contract will exist between the promoter and the third party.

Where a promoter enters into a pre-incorporation contract on behalf of an unformed company, the third party can enforce the contract against the company or the promoter.

. Identify which of the following statements are true.

A public company must have a share capital.

Public and private companies must appoint a company secretary.

A public company cannot be classified as a small company.

A public company must be limited.

A private company can only trade once it has been issued with a trading certificate.

A private company must have a share capital.

A public company must have at least two members.

A public company must offer its shares to the public at large.

A public company must have a minimum share capital of at least £50,000.

Public companies can dispense with the requirement to hold an AGM

. What is a listed company?

A company that has a class of its securities listed on the UK's official list.

A company that trades its shares on the Main Market of the London Stock Exchange.

A company that trades its shares on AIM.

A company that has its shares listed on a stock exchange in an EEA Member State.

A company that has its shares listed on the New York Stock Exchange or NASDAQ.

. In a company limited by shares, what is the members' liability limited to upon liquidation?

The members' liability is limited to the amount that is unpaid on their shares.

The member' liability is limited to the amount stated in the statement of guarantee.

The members' liability is limited to the amount stated in the articles.

The members' liability is limited to the amount that their shares are worth.

. Which one of the following is not a parent company?

A company whose shares are held entirely by another company

A company that holds the majority of the voting rights in another company

A company that is a member of another company and has the right to remove a majority of that company's directors

A company that has the right to exercise a dominant influence over another

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