ACCA FINAL ASSESSMENT

Corporate and Business Law June 2011

Time allowed Reading and planning: 15 minutes Writing: 3 hours

All TEN questions are compulsory and MUST be attempted.

Do NOT open this paper until instructed by the supervisor. During reading and planning time only the question paper may be annotated. You must NOT write in your answer booklet until instructed by the supervisor. This question paper must not be removed from the examination hall.

Kaplan Publishing/Kaplan Financial

Paper F4 (ENG)

PAPER F4 (ENG): CORPORATE AND BUSINESS LAW © Kaplan Financial Limited. indirect. recording. 2 KA PLAN PUB LISHIN G . whether direct. 2010 The text in this material and any others made available by any Kaplan Group company does not amount to advice on a particular matter and should not be taken as such. All rights reserved. electronic or mechanical. Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability to any person in respect of any losses or other claims. including photocopying. without prior permission from Kaplan Publishing. or by any information storage and retrieval system. consequential or otherwise arising in relation to the use of such materials. incidental. No part of this examination may be reproduced or transmitted in any form or by any means. No reliance should be placed on the content as the basis for any investment or other decision or in connection with any advice given to third parties. Please consult your appropriate professional adviser as necessary.

paid up capital. (3 marks) (3 marks) (Total: 10 marks) (4 marks) QUESTION 4 (a) (b) Distinguish between executory. and the circumstances when a precedent will not be binding. (5 marks) (5 marks) (Total: 10 marks) QUESTION 2 Explain the remedies available for breach of contract. (6 marks) (Total: 10 marks) K APLAN P UBLI S H I N G 3 . (4 marks) Explain the meaning of ‘a principles–based approach’ to corporate governance and the advantages and disadvantages of such an approach as opposed to a rules-based approach. (5 marks) (Total: 10 marks) QUESTION 5 (a) (b) Explain the meaning of corporate governance and what it covers in relation to companies. (5 marks) Explain the principle that performance of an existing duty is not sufficient to amount to consideration.F INA L A SSESSME N T QUES TIONS ALL TEN questions are compulsory and MUST be attempted QUESTION 1 Explain briefly: (a) (b) the doctrine of judicial precedent. (10 marks) QUESTION 3 (a) (b) What is a company’s share capital? Explain the meaning of the following: (i) (ii) issued capital. executed and past consideration.

a pre-incorporation contract. the day of publication of the journal.P AP E R F 4 ( EN G ): COR PORA TE AND BUSINESS LAW QUESTION 6 (a) (b) Describe the circumstances in which a partnership may be dissolved. By 8 am on Thursday morning he has changed his mind and he sends a fax to Info Ltd cancelling his order and requesting the return of his cheque. (3 marks) (Total: 10 marks) QUESTION 7 (a) Explain what is meant by the following in company law: (i) (ii) (b) a promoter.000 each! Will be sold to the first 20 customers to send an order and cheque for the full amount. Required: Advise Info Ltd whether it has contractual rights against Alan.’ Alan. Info Ltd subsequently cashes Alan's cheque. and refuses to return the money. reads the advertisement on Wednesday. (7 marks) Briefly summarise the differences between a partnership governed by the Partnership Act 1890 and a Limited Liability Partnership (LLP). It advertised in a specialist accounting journal as follows: ’Clearance sale: Limited number of Super 6686 Computers for only £1. (3 marks) (3 marks) (4 marks) (Total: 10 marks) What is the liability of a promoter on a pre-incorporation contract? QUESTION 8 Info Ltd is a small company that specialises in selling computer hardware and software to accountancy firms. (10 marks) 4 KA PLAN PUB LISHIN G . an accountant. He immediately posts an order including his cheque to Info Ltd. His posted letter arrives one hour later. claiming that it has a binding contract with him.

In March. Timothy seemed very anxious and was very concerned that he had absolutely no money left to cover the outstanding balance. Two days later Timothy returned to Samson's office with £50. (10 marks) QUESTION 10 Samson is a partner in a firm of solicitors and is representing his client Timothy in the purchase of an apartment for £250. 'this should settle it'. Required: Explain the nature of the duties that a director owes to his company and whether Raymond is liable to account to Atkinson for the profit made. the board of directors of Atkinson decides that the company will enter into the beer market. On a recent visit to see Samson. a company that manufactures drinks cans and bottles aimed at the beer market.000.000 in his savings account and does not own any other assets such as shares. Timothy is financing this purchase with a £180.000 in cash and told Samson. Raymond’s new company is making a roaring trade selling quality beer which remains fresh and cooler far longer than its competitors.000 mortgage loan from a building society and the remaining sum from his own savings. (10 marks) KAPLAN PUBLISHING 5 .FINAL ASSESSMENT QUESTIONS QUESTION 9 Raymond is a director of Atkinson Ltd. During a round of golf. In April. Required: Advise Samson what he must and must not do to avoid liability for Money Laundering under the Proceeds of Crime Act 2002. he only has a total of £20. Raymond resigns as director and assumes the position of director of a rival company. a soft drink company. Charles informs Raymond that he has patented an ingenious design for a beer can which can keep beer at the correct temperature. However. Samson is concerned about how quickly Timothy has been able to obtain the money to cover the transaction and he is uncertain about how to proceed. and one of his first actions as director is to adopt the Carbon Cans license as proposed by Charles. Raymond paid a visit to Charles who is the chief executive of ‘Carbon Cans Ltd’. In January. Charles asks Raymond whether his company would be interested in licensing the product.

P AP E R F 4 ( EN G ): COR PORA TE AND BUSINESS LAW 6 KA PLAN PUB LISHIN G .

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