These are ACCA F4 Global (CL/LW) Corporate and Business Law MCQs for Part-D of the Syllabus “Formation and constitution of business organisations”.

These multiple-choice questions (MCQs) are designed to help ACCA F4 Global students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

Students should not attempt these MCQs until they have studied the entire chapter.
All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F4 Global (CL/LW) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:	ACCA – Association of Chartered Certified Accountants
Fundamental Level:	Applied Skills
Subject:	Corporate and Business Law
Paper:	F4 Global – CL/LW
Chapter:	Corporations and legal personality
Chapter Number:	11 of the Practice and Exam Kit
Syllabus Area:	D – “Formation and constitution of business organisations”
Questions Type:	CBE MCQs
Exam Section:	Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part D of the Syllabus; “Formation and constitution of business organisations” of ACCA F4 Global (CL/LW) Corporate and Business Law Module.

Time

These MCQs are not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate.

Result

Students will get their F4 Global CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “( select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

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F4 (GLO) - Chapter 11 - Part D - MCQs

Course: ACCA - Association of Chartered Certified Accountants
Subject: F4 (LW/CL) (GLOBAL) - Corporate And Business Law
Syllabus Area: D - Formation and constitution of business organizations
Chapter in Kit: 11 - Corporations and legal personality
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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1 / 15

Which of the following is a benefit of running a business as a sole trader?

The business is highly dependant on the owner

No formal procedures to set up the business

An absence of economies of scale

2 / 15

Which of the following statements regarding sole traders is correct?

All of a sole trader's profits accrue to the owner

The business is legally distinct from the owner

Sole traders do not need to register for VAT

3 / 15

In a company limited by shares, what is the limit of a member's liability?

The amount they guaranteed to pay in the event of the company being liquidated

Nothing, the company is liable for its own debts

The amount of share capital they have purchased, including any amounts outstanding on the shares that they own

4 / 15

Which type of company does NOT have share capital?

A company limited by guarantee

A public company

An unlimited liability company

5 / 15

How much is the minimum issued share capital of a public company?

£25,000

£50,000

£12,500

6 / 15

Which of the following is an effect of a company's separate legal personality?

The company is liable for its own debts

Members have no liability in the event of the company being insolvent

Members and directors of a company are protected from the force of the law

7 / 15

In which of the following situations will the courts lift the veil of incorporation?

Where a director commits fraudulent trading

Where a member of a solvent company fails to pay the company what is outstanding on their share capital

Where an employee commits a tort in the course of their employment

8 / 15

Which of the following indicates that a business is being run as a sole trader?

The business is run by one person who is not legally distinct from the business

Share capital of the business is not sold on a recognised stock exchange

The business does not employ any employees

It does not file accounts with the Registrar of Companies

9 / 15

A group of friends wish to set up a business. They wish to limit their liability for the business' debts to an amount that they agree to when the business is formed.

Which of the following businesses is most suitable to the needs of the group?

A company limited by shares

A partnership

A corporation sole

An unlimited company

10 / 15

Which TWO of the following are true regarding public companies?

A public company must have a minimum of two members
A public company must have a minimum of two directors
A public company cannot be an unlimited liability company
A public company must have 'ltd' at the end of its name

3 and 4

1 and 2

2 and 4

2 and 3

11 / 15

Which of the following is NOT a criteria that a company must meet if it is to qualify for the small companies' regime?

Net profit of no more than £1m

Balance sheet total of not more than £5.1m

An average of 50 or fewer employees

Turnover of not more than £10.2m

12 / 15

Which term is used to describe the type of company that has its shares traded on a public stock exchange?

Public company

Listed company

Unlimited company

Private company

13 / 15

Which of the following statements regarding parent companies is NOT correct?

A company is a parent company if it holds the majority of the voting rights in another company

A company is a parent company if it has the right to exercise dominant influence over another company

A company is a parent company of any subsidiaries that its subsidiary company controls

A company is a parent company if it holds debentures in another company

14 / 15

Which of the following statements in regards to a company's legal personality is correct?

Separate legal personality does not apply to unlimited liability companies

Separate legal personality can be ignored in certain circumstances

Separate legal personality exempts members from liability if the company is liquidated

Separate legal personality only applies to private limited companies

15 / 15

In which TWO of the following circumstances may the veil of incorporation be lifted?

To allow directors of insolvent companies to be found liable for the debts of the company
To treat a group company as a single economic entity
To allow an auditor access to company records
To allow a private company to re-register as a public company

3 and 4

1 and 3

2 and 3

1 and 2