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Alan, Ben, Chris and Debbie are the only shareholders in ABCD Ltd, each holding 100 ordinary £1 shares. Alan, who is the company's sole director, has recently learned that Ben, Chris and Debbie are intending to remove him as a director by passing an ordinary resolution. In consequence Alan sold his computer to the company in return for 1,000 ordinary £1 shares. The company was in need of a computer, which was of equal value to the 1,000 ordinary £1 shares.

Which of the following is correct?

  1. The share issue is valid and Alan may use his 1,100 votes to defeat the resolution proposed by Ben, Chris and Debbie.
  2. The share issue is invalid as it has had the effect of manipulating the voting structure within the company.
  3. The share issue is invalid as the shares should have been offered to all the existing members first.
  4. The share issue is valid as long as Alan has the necessary authority to issue shares.

Answer(s): B



Which of the following is incorrect in relation to a reduction of capital by a private company?

  1. The company must pass a special resolution to authorize the reduction of capital.
  2. The reduction may affect the company's creditors.
  3. It is necessary for the company's Articles of Association to authorize a reduction of capital.
  4. The directors must make a solvency statement.

Answer(s): C



Paul is asked to work for a company that runs online casinos, but he has a deep seated conviction that gambling in any form is immoral. This dilemma is an example of a tension between:

  1. Societal and professional values
  2. Personal and corporate values
  3. Corporate and professional values
  4. None of the above

Answer(s): B



Paul has been held personally liable to contribute to the assets of P Ltd as a result of his "fraudulent trading" under Section 213 of the Insolvency Act 1986. The court is about to disqualify Paul from acting as a director. What is the maximum period for which he may be disqualified?

  1. No maximum.
  2. 5 years.
  3. 10 years.
  4. 15 years.

Answer(s): D






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