subject: company law

multipul choices

21)

A listed company is: _.

a

a small proprietary company

b

a large proprietary company

c

an unlisted large company

d

a public company

22)

Why does a company require people to act on its behalf?

a.

The Corporations Act requires a company to have at least one member

b.

While the company is a separate legal entity and members generally enjoy limited liability, it is possible in certain circumstances to lift the corporate veil.

c.

An unlimited company is a company whose members have no limit placed on their liability to the company.

d.

A company is an artificial legal construct and relies on persons to make decisions and take action on those decisions.

23)

When may directors validly refuse to hold a meeting requested by shareholders?

a.

To save the company the expenses of holding the meeting.

b.

If the directors do not want to hold the meeting.

c.

If the company secretary is out of the country.

d.

If the meeting has been requested for improper purpose.

24)

What is the name of the commonwealth agency which regulates companies and enforces the Corporations Act 2001 (Cth) as corporate watch-dog?

a.

The Australian Corporations and Consumer Commission

b.

The Australian Corporate Affairs Commissioner

c.

The Australian Shares and Investment Authority

d.

The Australian Securities and Investments Commission

25)

A company with the word "proprietary" or the abbreviation "Pty." in its name is a...

a.

company with:

at least one director and company secretary,

1 to 50 non-employee shareholders, and

has limited liability: ss113, 148 & 149.

b.

company with:

at least one director,

1 to 50 total shareholders, and

must have limited liability: ss113, 148 & 149.

c.

company with:

at least three directors and one company secretary,

1 to 50 non-employee shareholders, and

may or may not have limited liability: ss113, 148 & 149.

d.

company with:

at least one director,

1 to 50 non-employee shareholders, and

may or may not have limited liability: ss113, 148 & 149.

26)

Rhubard Pty Ltd has its own constitution with the following clause:

The company's business is limited to the development of residential properties only.

Recently, the directors of Rhubarb have entered into a contract to develop commercial properties. Is this contract valid?

a.

Yes, according to s125(2), it is valid even if it is against the objects clause.

b.

No, as directors do not have the authority to do so according to s140.

c.

No, the directors are personally responsible for the contract.

d.

Yes, because it is valid even if it is in breach of the constitution according to s125(1).

27)

The duty of care, skill and diligence is -

a.

defined by ASIC

b.

both statutory and fiduciary

c.

only a fiduciary duty

d.

only a statutory duty

28)

Meng has a successful business of designing web pages which he personally operates by himself from home. Mengs friend Short wants to start a business, being an internet web-based computer hardware supplier. If Meng and Short formed a partnership, how many more partners could they introduce in order to raise capital for the business?

a.

20

b.

1000

c.

400

d.

18

29)

The Corporations Act 2001 (Cth) changed the old common law rule that outsiders were deemed to be aware of all the information that ASIC keeps on its registers...

a.

True: it was the Doctrine of Constructive Notice, repealed by s130

b.

False: it was the Doctrine of Corporate Notice, amended but maintained by s129

c.

True: it was the Doctrine of Predictive Notice, repealed by s128

d.

False: it was The Doctrine of Assumptive Notice, now called the Diligence Rule found in: s180

30)

The internal management of a company formed after 1 July 1998 is governed by -

a.

The Corporations Act.

b.

Its articles of association.

c.

Such rules as are agreed to by the directors.

d.

The replaceable rules set out in the Corporations Act.

31)

Which of the following is incorrect?

a

Public companies must list on a stock exchange.

b

Large proprietary companies are required to prepare annual financial reports.

c

Proprietary companies must not engage in any activity that would require disclosure to investors under Chapter 6D except for the two exceptions listed in section 113(3) of the Corporations Act 2001 (Cth).

d

Both public and proprietary companies must have at least one member.

32)

The maximum number of shareholders a proprietary company can have is:

a.

There is no maximum.

b.

50 non-employee shareholders.

c.

50 non-officer shareholders.

d.

50 with at least two who are Australian residents.

33)

A listed company is: __________

a.

a small proprietary company

b.

a large proprietary company

c.

an unlisted large company

d.

a public company

34)

Members in a company have a number of statutory rights. Which of the following is not a right of members in the Corporations Act (Cth) 2001?

a.

The right to inspect the register of members

b.

The right to overrule bad management decisions made by directors

c.

The right to apply to inspect the companys books

d.

The right to seek a correction of the share register

35)

According to the decision in Salomon v Salomon & Co [1897] AC 22 -

a.

Once registered in accordance with the requirements of the law, a company is a separate entity from its shareholders.

b.

Where all shares in a company are held by one shareholder, the business belongs to that shareholder not the company.

c.

Persons wishing to form a company must be independent of each other.

d.

It is not possible for one person to form a company.

36)

Once registered, a company ______________.

a.

always provides unlimited liability

b.

always provides limited liability

c.

is a separate legal entity

d.

can never be sued

37)

Which of the following is incorrect?

a.

Public companies must list on a stock exchange.

b.

Large proprietary companies are required to prepare annual financial reports.

c.

Proprietary companies must not engage in any activity that would require disclosure to investors under Chapter 6D except for the two exceptions listed in section 113(3) of the Corporations Act 2001 (Cth).

d.

Both public and proprietary companies must have at least one member.

38)

Why does a company require people to act on its behalf?

a

The Corporations Act requires a company to have at least one member

b

While the company is a separate legal entity and members generally enjoy limited liability, it is possible in certain circumstances to lift the corporate veil.

c

An unlimited company is a company whose members have no limit placed on their liability to the company.

d

A company is an artificial legal construct and relies on persons to make decisions and take action on those decisions.

39)

A special resolution requires

a

at least 100% of members votes

b

at least 75% of members votes

c

at least 25% of members votes

d

at least 50% of members votes

40)

Who, among the following, may not call an ordinary meeting of a company?

a.

The board of directors.

b.

The Australian Stock Exchange.

c.

A single director.

d.

Members holding at least 5% of the voting shares of a company.