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BLP Exam Questions and Answers: Company Law and Employment Law, Exams of Business and Labour Law

A comprehensive set of questions and answers covering key topics in company law and employment law, including director's duties, shareholder remedies, unfair dismissal, and acquisition agreements. It is a valuable resource for students preparing for blp exams, offering insights into common exam questions and providing verified solutions.

Typology: Exams

2024/2025

Available from 04/07/2025

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BLP
BLP EXAM
BLP EXAM QUESTIONS WITH CORRECT
VERIFIED SOLUTIONS 100% GUARANTEED
PASS (2025/2026)
Ways to indemnify directors - ANS 1. insurance
2. QTPIP s234 (copy at registered office, disclose in directors' report)
s205 - SH approval not required
3. pension scheme indemnity
s304/305 - ANS Board can delay matters (not clear days!)
notice: 21 days
meeting: 28 days from day 22 if cooperative board
total 50 days
non-cooperative board
Day 23 - SH to step in and call GM (14 clear days)
Day 38 for GM
Derivative action - ANS s260 - SH can bring claim on behalf of company
against director if director breaches duty
- remedy granted for benefit of company
s994 - ANS petition to apply to court for an order where member has been
unfairly prejudiced by the company's conduct/acts/omissions
- remedy granted for benefit of members
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Download BLP Exam Questions and Answers: Company Law and Employment Law and more Exams Business and Labour Law in PDF only on Docsity!

BLP

BLP EXAM QUESTIONS WITH CORRECT

VERIFIED SOLUTIONS 100% GUARANTEED

PASS (2025/20 26 )

Ways to indemnify directors - ANS ✓1. insurance

  1. QTPIP s234 (copy at registered office, disclose in directors' report) s205 - SH approval not required
  2. pension scheme indemnity s304/305 - ANS ✓Board can delay matters (not clear days!) notice: 21 days meeting: 28 days from day 22 if cooperative board total 50 days non-cooperative board Day 23 - SH to step in and call GM (14 clear days) Day 38 for GM Derivative action - ANS ✓s260 - SH can bring claim on behalf of company against director if director breaches duty
  • remedy granted for benefit of company s994 - ANS ✓petition to apply to court for an order where member has been unfairly prejudiced by the company's conduct/acts/omissions
  • remedy granted for benefit of members

BLP

Foss v Harbottle - ANS ✓Derivative Action - which allows a minority shareholder to bring a claim on behalf of the company (minority shareholder remedies) s260- 263 Pedley v Inland Waterways Association Ltd - ANS ✓- directors refuse to place the s.168 CA 2006 resolution on the agenda for the general meeting because they are not bound to place the removal resolution on the agenda for consideration at a forthcoming general meeting Bushell v Faith - ANS ✓- involved a family company, father of the business had three adult children; 2 daughters and a son. Difficulty was the son hated the sisters and vice versa. Father was worried that holding 2/3 of the vote (sisters) would push the brother out.

  • give a director, who is also a shareholder, weighted voting rights at a general meeting at which a s.168 CA 2006 resolution is proposed Who is an employee? - ANS ✓1. economic reality/multiple test (whole picture)
  1. integration test (staff training, email, meetings, uniform?)
  2. control test - degree of operational control (what work is done where, how?)
  3. mutuality of obligation test - right to send substitute (obligation on company to provide work/ on employee to perform work personally) Wrongful dismissal - ANS ✓- contractual claim/breach of contract without any/sufficient notice or gross misconduct
  • try to put into position before dismissal, therefore employee will be entitled to net salary benefits had contract been properly performed

BLP

burden of proof switches to employer ACAS code of practice, employee handbook (reason 1 & 2 requires employer to investigate & establish facts of case to hold meeting with employee & inform them of problem) - if not follow proper procedure, compensatory award can be increased by 25%)

  1. conduct (eg consistently late for work)
  2. capability (lacks qualifications or skill for the job)
  3. redundancy (business shuts down, location shuts down, reduction in need for employees)
  • must follow proper procedure: consultation (solo/collective), selection (pool & criteria - object & capable of measurement), suitable alternative employment, appeal
  1. illegality (performance of roll puts employee/employer in breach of law (eg work permit needed)
  2. some other substantial reason PILON clause - ANS ✓Payments in Lieu of Notice: enables employer to dismiss employee without employee working their notice period - instead employer pays lump sum (usually comprising of salary & contractual benefits during notice period)
  • if there is no PILON clause in the contract & employer tried to dismiss under PILON, there is a breach of contract - need contractual right! TUPE (business sale/ transfer of an undertaking) - ANS ✓1. dismissal auto- unfair (if solo reason for dismissal is connected to transfer

BLP

  1. changes to terms and conditions void (if employer wants to vary terms and reason is connected to transfer, it will be void unless transferee can show ETO reason entailing change in workforce)
  • unless ETO - economic/technical/organisational reasons; must intend a change in the workforce - then potentially fair Restrictive covenants in employment contracts - ANS ✓1. non-competition
  1. non-dealing
  2. non-solicitation
  • void and unenforceable unless protect legitimate business interest + no further than reasonable necessary
  • reasonableness test: length/duration, worldwide restriction, taking into account needs of business/duties of employee (eg non-solicit covenants not reasonable for junior employee with no prior client contact) COT3 vs settlement agreement - ANS ✓COT3 (only through ACAS)
  • shorter, simpler
  • can be entered into verbally
  • usually relate to particular complaints only
  • signed by reps Settlement agreement must satisfy criteria under ERA s203(3)
  • need to be signed
  • seek to settle all employment claims
  • signed by employees themselves If neither is done properly, then employee can still have right to bring statutory claims

BLP

Warranties - ANS ✓Binding statement of fact made by seller about the target company in the acquisition agreement (if factually incorrect, buyer can claim damages for breach of contract) Indemnities - ANS ✓A promise from the seller to the buyer to reimburse the buyer on £ to £ basis in respect of any liability arsing after completion by reference to pre-completion events (seller expected to cover costs of any such liability) Retention (escrow) account - ANS ✓Part of purchase price is put into a bank account opened in the joint names of a seller and buyer pending the outcome of eg. litigation involving target company Conditions precedent - ANS ✓Where consents, clearances or completion of specified documents is a pre-requisite to buyer entering into SPA De Maximis - ANS ✓Financial cap on amount a seller can be required to pay in respect of warranty/indemnity claims under SPA De Minimis - ANS ✓lower level which warranty/indemnity claims cannot be brought (avoiding nuisance claims) Buyers Prefer - ANS ✓Business Sales (Asset) Sellers Prefer - ANS ✓Share Sales Disclosure Letter - ANS ✓Prepared for seller's solicitors, qualifies warranties

BLP

Acquisition Agreement - ANS ✓Prepared by buyer's solicitors, includes warranties and indemnities. Heads of Terms - ANS ✓Largely non-binding (but moral force), sets out key terms of the transaction as agreed between the parties and key steps the parties have agreed they will (or will not) take during negotiations. Purpose is to avoid misunderstanding and wasting time and costs. fraudulent trading - ANS ✓where a person continued trading even though he knew the company could not pay its debts and the business is carried on with the intent to defraud creditors (or any fraudulent purpose) S213/ 245ZA - imprisonment up to 10 years & fines, liability to contribute to company assets, disqualification as director s10 CDDA dishonesty Wrongful trading - ANS ✓s214/246ZB - at some point before the commencement of the winding up of the company, a director knew, or ought to have concluded, that there was no reasonable prospect that the company would avoid going into insolvent liquidation. It is established by proving negligence but no liability if every step taken by director to minimize creditor losses. Consequences include liability to contribute to company assets and disqualification for the director Reasonably diligent person test - ANS ✓s214/246ZB - Objective (4)(a) or subjective (4)(b) test applied to wrongful trading - higher of the 2 standards

BLP

members voluntary liquidation - ANS ✓when shareholders decide to close the company but the company still has money to pay its debts (solvent, surplus distributed)

  1. directors statutory declaration of insolvency
  2. company to notify QFCH
  3. SR to place company into MVL
  4. OR to appoint liquidator creditors' voluntary liquidation - ANS ✓1. SH resolution SR to place company into CVL Shareholders to nominate a liquidator (within 7 days, must send notice of SR passed and who nominee is - if 10%+ object, directors will need to convene a physical meeting with creditors who will nominate own choice) share sale procedure - is financial assistance prohibited? - ANS ✓1. acquisition of shares (sale/ transfer/ issue)
  5. target company/ subsidiary making loan is a plc s278/
  6. specified type of transaction s677(1) - gift, guarantee, security, indemnity
  7. must constitute as actual financial assistance
  8. direct/indirect financial assistance
  9. given before/at the same time as acquisition
  10. purpose of loan to allow investor/buyer to go ahead with acquisition share sale procedure - financial assistance exceptions - ANS ✓1. Purpose
  11. unconditional s681 (dividends, buybacks)
  12. conditional s682 (business is money lending, employee share schemes)

BLP

Whitewash procedure - ANS ✓before 1st Oct 2008, company under CA rules Prohibition on financial assistance applied to target company (public & private) & any subsidiaries (public/private) - make unlawful transactions lawful

  1. SR
  2. director statutory declaration of solvency Participating Preference Shares - ANS ✓(1) in surplus profits available for distribution after they have received their own fixed preferred dividend; and/or (2) in surplus assets of the company on a winding up. Cumulative if stated in Articles Equity Securities - ANS ✓Ordinary shares: all shares with no fixed rights as to dividends nor capital s174 - ANS ✓Duty to exercise reasonable care, skill and diligence (common law - only damages) All others 170-177 fiduciary duties - restore property If breach, transaction void unless third party rights apply s188 - ANS ✓Directors' long-term service contracts
  • OR
  • over 2 years SPTs - ANS ✓s