A Short Business Law Test Quiz Part- II

15 Questions | By Jacksonmatthews | Updated: Mar 22, 2022 | Attempts: 159

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Questions and Answers

1.

A contract is a form of agreement which is legally binding.
- A.
  
  True
- B.
  
  False
2.

An agreement for example to purchase goods from a shop is a contract, and some important features of this relationship can be identified:- (Select Three)
- A.
  
  The buyer and seller will agree what is to be purchased and the price to be paid.
- B.
  
  Employment is not a binding requirement.
- C.
  
  Both of them will exchange something, this is termed consideration.
- D.
  
  Both parties will intend that the transaction is legally binding.
3.

The contract of employment is the relationship which exists between the worker and employee.
- A.
  
  True
- B.
  
  False
4.

A sole trader is a one-person firm, that is the firm has only one owner. This person will receive all the ______ of the firm and be responsible for its losses, and that it may have employees.
- A.
  
  Profits
- B.
  
  Merchandise
5.

Partnerships is the relationship which subsists with persons carrying on a business in common with a view to profit’. The maximum number of people who can form a partnership is 12.
- A.
  
  True
- B.
  
  False
6.

The court may under the following conditions terminate a partnership agreement:- (Select Five)
- A.
  
  Incapacity which prevents a partner acting as such, for example mental illness
- B.
  
  Conduct by a partner which adversely affects the firm, for example a criminal conviction for dishonesty.
- C.
  
  Collapse of trust between the partners or breach of the partnership agreement.
- D.
  
  That the business can no longer be carried on at a profit.
- E.
  
  That it is ‘just and equitable’ to dissolve the partnership.
- F.
  
  If a partner becomes insolvent
7.

Companies are made up of individual members and have rights to vote at its annual general meeting and receive a copy of its accounts.
- A.
  
  True
- B.
  
  False
8.

Limited liability companies fall into two categories:- (Select Two)
- A.
  
  Partnerships
- B.
  
  Public limited companies (plcs)
- C.
  
  Private companies (Ltd).
9.

The formation process of forming a company requires that the promoters of the company send to the Registrar of Companies a number of documents:- (Select Seven)
- A.
  
  Memorandum of Association
- B.
  
  Articles of AssociationOption
- C.
  
  Statement of the personal details of the directors and their signed consents to act as directors.
- D.
  
  Lease agreement
- E.
  
  Address of the registered office
- F.
  
  Statement of the capital of the company
- G.
  
  Declaration of compliance which states that all the formalities of the Companies Act 1985 have been complied with
- H.
  
  Registration fee.
10.

Capital is a liability since it does not belong to the company, and money raised as capital is used to purchase assets and so you can see that liabilities and assets will be equal.
- A.
  
  True
- B.
  
  False
11.

A mortgage is a type of charge and companies can give charges over their property in the same way, and if the charge is over a specific asset, this is usually termed a fixed charge. The grant of a fixed charge stops the borrower from disposing of the property without the consent of the lender
- A.
  
  True
- B.
  
  False
12.

Directors have wide powers of management, and if abused these could result in them furthering their own interests instead of those of the company. To ensure that this does not happen their _______ are balanced by legal duties.
- A.
  
  Rights
- B.
  
  Powers
- C.
  
  Interests