Paper 1 Practice Questions

A claimant instructs its solicitor to put forward a breach of contract claim despite the solicitor's advice that the claim is incoherent - it has no legal basis. Which of the following is the best advice as to whether such a claim should be put forward? A. The solicitor should not help in putting this claim forward. The claimant can pursue the claim but risks a costs order against it. B. The solicitor should help the claimant in putting the claim forward. The claimant risks a costs order against it. C. The claimant cannot pursue the claim. D. The solicitor should not help in putting this claim forward and should prevent the claimant from pursuing the claim. E. The solicitor should help the claimant in putting the claim forward. The claimant and solicitor risk costs orders against them.

A

A company entered into a contract with an office equipment supplier to purchase 3 projectors. The contract was signed by the sole director on behalf of the company. The director and his wife are the shareholders of the company. The supplier delivered the projectors as agreed but the company failed to pay the purchase price. Which statement best describes what legal action the supplier can take? A. The supplier can sue the company for the purchase price. B. The supplier can sue the company and the director for the purchase price. C. The supplier can sue the company and the shareholders for the purchase price. D. The supplier can sue the sole director for the purchase price. EThe supplier can sue the shareholders for the purchase price.

A

A corporate client of your law firm has bought a shelf company named Shelfco 123 Ltd ('Shelfco Ltd') on your recommendation. Shelfco Ltd has unamended Model Articles for a private company limited by shares. The Board of Directors of Shelfco Ltd wishes to change the name of the company to a more suitable commercial name. What is the correct procedure for changing the company name of Shelfco Ltd under the Companies Act 2006? (Assume the name chosen by the client is available and not subject to any objections by another party.) A. To change the name of Shelfco Ltd under the Companies Act 2006, Shelfco Ltd's shareholders must pass a special resolution. B. To change the name of Shelfco Ltd under the Companies Act 2006, Shelfco Ltd's shareholders may pass an Ordinary Resolution. Alternatively, the Board may pass a Board Resolution. C. To change the name of Shelfco Ltd under the Companies Act 2006, Shelfco Ltd's Board merely needs to pass a Board Resolution. D. To change the name of Shelfco Ltd under the Companies Act 2006, Shelfco Ltd's shareholders may pass a special resolution. Alternatively, the Board may pass a Board Resolution. E. To change the name of Shelfco Ltd under the Companies Act 2006, Shelfco Ltd's shareholders must pass an Ordinary Resolution.

A

A homeowner has issued and served the claim form and particulars of claim in relation to defective building works carried out 2 months ago at the homeowner's home. The two defendants are a plumber and an electrician, and each is alleged to have negligently contributed to the defects. The claimant wishes to amend the particulars of claim to correct small errors in the way the defective electrical works are described. From whom does the homeowner require permission or consent to make this amendment? Select one alternative: A. From either the court, or from both the electrician and the plumber. B. From either the court or the electrician. C. From the court. D. From the court, the electrician and the plumber. E. From the electrician and the plumber.

A

A new investor is keen to buy shares in a public limited company (the "Target") but does not have the necessary funds to purchase the shares without the aid of a bank loan. The bank has requested security for the bank loan from the Target, the Target's public limited company subsidiary (the "Public Subsidiary") and the Target's private limited company subsidiary (the "Private Subsidiary"). Which would be the best advice to the Target? A. The security given by the Target, the Public Subsidiary and the Private Subsidiary would be unlawful financial assistance. B. Only the security given by the Private Subsidiary would be unlawful financial assistance. C. Only the security given by the Target will be unlawful financial assistance. D. Only the security given by the Public Subsidiary and the Private Subsidiary would be unlawful financial assistance.

A

A person is a partner in a small catering business. The following information relates to their income and other related tax affairs: Trading profits for tax purposes £73,000 Savings related income £1,800 Gift of a painting from their grandmother £5,000 (market value) Dividend on shares in a listed company £1,000 Contributions made by the person into a personal pension scheme £5,000 Interest on a loan the person took out to inject further capital into the business £3,500 What is the person's Net Income? A. £67,300 B. £70,800 C. £54,800 D. £72,300 E. £75,800

A

A person owns shares in a private limited company. The shares are not in an ISA. In the 2022/23 tax year the person receives a dividend of £3,000. The person's only other source of income in the tax year is their salary. Their taxable income, including the dividend, is £43,000. The personal allowance for 2022/23 is £12,570. The basic rate tax band of 8.75% for 2022/23 applies to dividend income up to and including £37,700 with the higher rate of 33.75% applicable from 37,701 to £150,000. The dividend allowance is £2,000. How much tax will the person pay on their dividend income? A. £337 B. £1012 C. £262 D. £400 E. £0

A

A private limited company has gone into liquidation. Upon reviewing the company's accounts, the liquidator has discovered that the company had been trading at a time when the directors knew or ought to have known that there was no reasonable prospect of the company avoiding insolvent liquidation. The continued trading caused substantial further loss to the company. What is the most likely action that the liquidator may take against the directors? A. The liquidator may bring a claim against the directors for wrongful trading. B. The liquidator may bring a claim against the directors for fraudulent trading. C. The liquidator may bring proceedings for disqualification of the directors. D. The liquidator may bring a claim against the directors for breach of directors' duties. E. The liquidator may bring a claim against the directors for negligence.

A

A woman makes some soy wax from plants grown in her greenhouse and sells it to a candle making company for £2,000 + VAT. The company makes some candles with it and sells all the candles made with the wax to a distributer for £4,000 + VAT. The distributor sells the candles to a retail outlet for £5,500 plus VAT. How much VAT will be sent to HMRC as a result of the above transactions? A. £1,100 B. £2,300 C. £1,900 D. £300 E. £5,500

A

At the trial of a multi-track case of professional negligence lasting for 3 days, the following costs order is made: 'The Defendant to pay the Claimant's costs of the proceedings on the standard basis'. What is the court likely to do in relation to ascertaining the precise sum of costs to be paid? A. The court will order the costs to be the subject of detailed assessment, if not agreed. B. The court will make a summary assessment of the costs. C. The court will list a further hearing within 14 days to determine whether or not a detailed assessment of the costs will be required. D. The court will decide the amount of costs there and then by conducting a detailed assessment of costs. E. The court will make an order for fixed costs.

A

Director A is a director of Company B. Company B proposes to issue Director A with a service contract (the "Contract") for a fixed term of three years (the "Term") which contains the following provision at clause 11: "The Company may not terminate the Contract before the expiry of the Term except for disciplinary reasons as set out in clause 15." What does Company B need to do before offering the Contract to Director A and what is the consequence of it failing to do so? A. Company B must seek shareholder approval for the Contract by ordinary resolution. If it fails to do so, clause 11 of the Contract would be void and deemed replaced with a clause allowing Company B to terminate the Contract on reasonable notice. B. Company B must seek shareholder approval for the Contract by ordinary resolution. If it fails to do so, the Contract will be void. C. Company B must seek shareholder approval for the Contract by special resolution. If it fails to do so, the Contract will be void. D. Company B must seek shareholder approval for the Contract by special resolution. If it fails to do so, clause 11 of the Contract would be void and deemed replaced with a clause allowing Company B to terminate the Contract on reasonable notice. E. Company B must seek shareholder approval for the Contract by ordinary resolution. If it fails to do so, clause 11 of the Contract would be void and deemed replaced with a clause allowing Company B to terminate the Contract on six months' notice.

A

Fleet issues the CF at court on Tue 6 Dec and serves the CF and POC on the D by first class post on Wed 7 Dec. The D files an acknowledgment of service on 20 Dec. Has the D filed in time? If so, when is the last date upon which the defence can be filed (without extension of time)? A. Fri 23 Dec B. Sat 24 Dec C. Fri 6 Jan D. Sat 7 Jan

A

On receipt of the claimant's claim form and particulars of claim, you advised your client, the defendant, that it has a good defence. You have just returned from holiday 3 days late due to your flight being cancelled. In your absence, judgment in default was entered against your client as you failed to file an acknowledgement of service or defence within 14 days of deemed service of the particulars of claim. What is the best answer about whether there is anything you can do to enable your client to defend the claim? A. Issue an application to set aside judgment in default as the defendant has some real prospect of defending the claim and the application is made promptly. B. Issue an application to strike out the claimant's claim. C. There is nothing that can usefully be done. D. Issue an application to set aside judgment as the judgment in default has been wrongly entered. E. Issue an application to set aside judgment in default as the defendant is not at fault for failing to file acknowledgement of service in time.

A

The liquidator of an insolvent manufacturing company wishes to make payments to various parties following the collapse of the company. A bank has a fixed and floating charges over the assets of the company. There are several employees who are owed a small amount in unpaid salaries, as well as a number of unsecured trade creditors. HMRC is also owed money for outstanding PAYE contributions. Which statement best describes the order in which the liquidator should distribute the monies after payment of their costs? A. The bank will receive payment from the fixed charge fund. The floating charge assets are then sold and distributed as follows (1) preferential creditors - the employees followed by HMRC (2) set aside the prescribed part (3) the bank receives any further payment required from the floating charge assets (4) the unsecured creditors, who will benefit from the prescribed part fund as well as any remaining floating charge assets. B. The bank will receive payment from the fixed charge fund. The floating charge assets are then sold and distributed as follows (1) preferential creditors - HMRC followed by the employees (2) set aside the prescribed part (3) the bank receives any further payment required from the floating charge assets (4) the unsecured creditors, who will benefit from the prescribed part fund as well as any remaining floating charge assets. C. The bank will receive payment from the fixed charge fund. The floating charge assets are then sold and distributed as follows (1) set aside the prescribed part (2) preferential creditors - the employees followed by HMRC (3) the bank receives any further payment required from the floating charge assets (4) the unsecured creditors, who will benefit from the prescribed part fund as well as any remaining floating charge assets. D. The bank will receive payment from the fixed charge fund. The floating charge assets are then sold and distributed as follows (1) set aside the prescribed part (2) preferential creditors - HMRC followed by the employees (3) the bank receives any further payment required from the floating charge assets (4) the unsecured creditors, who will benefit from the prescribed part fund as well as any remaining floating charge assets. E. The fixed and floating charge assets are sold and distributed as follows (1) the bank (2) preferential creditors - the employees followed by HMRC (3) set aside the prescribed part (4) the unsecured creditors, who will benefit from the prescribed part fund as well as any remaining floating charge assets.

A

What information is the firm required to provide to new clients in writing at the time of engagement? A.The client's right to complain about your services and your charges; how a complaint can be made and to whom; and any right they have to complain to the Legal Ombudsman and when they can make any such complaint. B.The client's right to complain about your services and your charges; how the firm will charge for the work; and as their matter progresses, the likely overall cost of the matter and any costs incurred. C.Who will be carrying out the work for the client; how the firm will charge for the work; and any right they have to complain to the Legal Ombudsman and when they can make such a complaint. D.Who will be carrying out the work for the client and the supervising partner; the overall costs of the matter and any costs incurred; and how a complaint can be made and to whom. E.That complaints will be dealt with properly, fairly and free of charge; the services provided by the firm are regulated by an approved regulator; and whether any work done for the client will be carried out by an authorised person.

A

You act for a private limited company in financial difficulty which is thinking about proposing a company voluntary arrangement to its creditors (the CVA Proposal). The company has one secured creditor, which is a bank, plus a number of general unsecured creditors. The client seeks your advice as to who will need to approve the CVA Proposal and the effect of the CVA Proposal if it is approved. Which one of the following is the correct advice? A. The CVA Proposal, if approved by 75% in value of creditors and a simple majority of shareholders, will bind all the unsecured creditors. However, the bank will not be bound unless they consent. B. The CVA Proposal, if approved by 75% in value of creditors and a simple majority of shareholders, will bind all the unsecured creditors. The bank will not be bound since a CVA Proposal is not able to compromise loans made by banks. C. The CVA Proposal, if approved by 75% in value of creditors and a simple majority of shareholders, will bind all the creditors, including the bank. D. The CVA Proposal, if approved by a simple majority of creditors and a simple majority of shareholders, will bind all the unsecured creditors and the bank. E. Incorrect. A debt owed to a bank is capable of being compromised by a CVA. What is important is not whether the creditor is a bank but what type of debt the company owes the bank. CVAs can compromise unsecured debt but not secured debt without the secured creditor's consent; s.4 Insolvency Act.

A

You are in the process of tailoring a shelf company (the "Company") to meet a client's requirements. The Company has adopted the unamended Model Articles of Association for Private Companies Limited by Shares. The client requires the Company's name to be changed, the existing directors of the Company ("Existing Directors") to be replaced with members of its team (the "New Directors") and for the registered office of the Company to be changed before it is transferred to the client. What board and shareholder resolutions are required to implement the client's instructions most expeditiously (NOT including any resolutions required to convene meetings)? A. A special resolution to change the Company's name, board resolutions to appoint the New Directors, board resolutions to accept the resignations of the Existing Directors and a board resolution to change the Company's registered office. B. A special resolution to change the company's name, board resolutions to appoint the New Directors, board resolutions to accept the resignations of the Existing Directors and a special resolution to change the Company's registered office. C. An ordinary resolution to change the Company's name, ordinary resolutions to appoint the New Directors, board resolutions to accept the resignations of the Existing Directors and an ordinary resolution to change the Company's registered office. D. A special resolution to change the Company's name, board resolutions to appoint the New Directors, ordinary resolutions to remove the Existing Directors and a board resolution to change the Company's registered office. E. A special resolution to change the company's name, ordinary resolutions to appoint the New Directors, ordinary resolutions to remove the Existing Directors and a board resolution to change the Company's registered office.

A

A claimant driver is bringing proceedings against a defendant driver following a road traffic accident. The defendant has admitted liability and the claim is proceeding in relation to quantum only. The accident was captured on video by another driver who provided a copy of the video to the claimant, but the claimant deleted this by error before the proceedings started and does not have the contact details of the party that originally captured it. The court has ordered standard disclosure. Which of the following best explains why the claimant is not obliged to disclose this video to the defendant? A. The video is no longer in the claimant's control. B. It is not something the claimant wishes to rely on, nor is it supportive of the defendant's case or adverse to either party's case. C. The disclosure obligation does not extend to videos. D. The video was created by a third party. E. The identity of the 'author' of the video (the person that captured it) is unknown.

B

A claimant's breach of contract claim has been allocated to the multi-track. Seven days before the deadline for filing the budget (Precedent H) the claimant's solicitors realise that they will not be in a position to file and exchange the costs budget in time because it has not been possible to work out all the costs for counsel and experts (as required by Precedent H). Leading Counsel on the case is currently involved in a complex trial overseas which is due to complete a few days after the deadline and as such has been uncontactable for a number of weeks. There have also been issues with the claimant's expert witness who has been on holiday for the last 4 weeks. Therefore, the claimant's solicitors feel it is necessary to make an application to the court for an extension of time of 14 days. Which one of the following statements is the most accurate as to the nature of the extension and whether it will be granted? A. This is an in-time application for an extension of time (CPR 3.1(2)(a)) which is likely to be granted in full. B. This is an in-time application for an extension of time (CPR 3.1(2)(a)) where although the court may grant the application, due to the fact that it will disrupt the conduct of the litigation, it is unlikely to grant it in full. C. This is an application for relief from sanctions (CPR 3.9) and it is likely to be granted. D. This is an in-time application for an extension of time (CPR 3.1(2)(a)) which is unlikely to be granted at all (even in part). E. This is an application for relief from sanctions (CPR 3.9) and it is unlikely to be granted.

B

A company (the "Company") has three directors, a company secretary and four shareholders, each shareholder holding 25% of the Company's share capital. The Company has unamended Model Articles of Association for Private Companies Limited by Shares. One of its directors would like a loan of £30,000 from the Company (the "Loan") to fund some renovation work on personal property. The board of the Company would like to implement this Loan and do not anticipate the shareholders objecting to it. The Company does not use the written resolution procedure for such matters. What resolutions (board and shareholder) are required for the Company to implement the Loan? A. Shareholder resolution: Special resolution to approve the loan. Board resolutions: (1) Approve notice of general meeting, (2) convene general meeting, (3) instruct company secretary to make available to the shareholders a copy of the Loan agreement, (4) approve entry into the loan agreement, (5) authorise a director to sign the Loan agreement on behalf of the Company, (6) instruct company secretary to deal with post meeting matters. B. Shareholder resolution: Ordinary resolution to approve the loan. Board resolutions: (1) Approve notice of general meeting, (2) convene general meeting, (3) instruct company secretary to make available to the shareholders a memorandum setting out the nature, amount and purpose of the Loan, (4) approve entry into the loan agreement, (5) authorise a director to sign the Loan agreement on behalf of the Company, (6) instruct company secretary to deal with post meeting matters. C. Shareholder resolution: Ordinary resolution to approve the loan. Board resolutions: (1) Approve notice of general meeting, (2) convene general meeting, (3) instruct company secretary to make available to the shareholders a copy of the Loan agreement, (4) approve entry into the loan agreement, (5) authorise a director to sign the Loan agreement on behalf of the Company, (6) instruct company secretary to deal with post meeting matters. D. Shareholder resolution: Special resolution to approve the loan. Board resolutions: (1) Approve notice of general meeting, (2) convene general meeting, (3) instruct company secretary to make available to the shareholders a memorandum setting out the nature, amount and purpose of the Loan, (4) approve entry into the loan agreement, (5) authorise a director to sign the Loan agreement on behalf of the Company, (6) instruct company secretary to deal with post meeting matters. E. Shareholder resolution: Ordinary resolution to approve the loan. Board resolutions: (1) Approve notice of general meeting, (2) convene general meeting, (3) instruct company secretary to make available to the shareholders a memorandum setting out the wording of the resolution to be passed, (4) approve entry into the loan agreement, (5) authorise a shareholder to sign the Loan agreement on behalf of the Company, (6) instruct company secretary to deal with post meeting matters.

B

A company (the 'Buyer') is looking to purchase the entire issued share capital of a private limited company (the 'Target') for £1,500,000. The Buyer has an existing wholly owned subsidiary company which is a PLC. The Buyer is proposing to fund the acquisition partly with a loan from the bank of £750,000. In return for the loan, the bank requires security over the assets of the Target, the Buyer and the Buyer's subsidiary PLC. Which of the following statements is correct in respect of prohibited financial assistance? A. The proposed security over the assets of the Target potentially falls within the prohibited financial assistance provisions. B. None of the proposed security would fall within the prohibited financial assistance provisions. C. The proposed security over the assets of all three companies potentially falls within the prohibited financial assistance provisions. D. The proposed security over the assets of the Buyer's subsidiary PLC potentially falls within the prohibited financial assistance provisions. E. The proposed security over the assets of the Buyer and the Buyer's PLC subsidiary potentially falls within the prohibited financial assistance provisions.

B

A company takes advice on an employment dispute and incurs legal fees of £5,000 but has not yet been invoiced for that work by the end of its financial year. The company's business accounts for the said financial year are being drawn up. Which of the following statements is correct? A. The legal fees are an accrual and if not reflected in the business accounts then the company's assets will be understated by £5,000 in the balance sheet. B. The legal fees are an accrual and if not reflected in the business accounts then the company's assets will be overstated by £5,000 in the balance sheet. C. The balance sheet will not balance owing to the sum of £5,000 having not been paid yet. D. The legal fees are a prepayment and if not reflected in the business accounts then the company's assets will be overstated by £5,000 in the balance sheet. E. The legal fees are a prepayment and if not reflected in the business accounts then the company's profits will by understated by £5,000.

B

A defendant in a personal injury claim has come in to seek advice on her position in relation to the recoverability of costs of the proceedings. In light of the qualified one-way costs shifting regime (QOCS) which of the following statements best describes the advice you would give the defendant? A. If the claimant wins the case or any aspect of it, the costs order against the defendant cannot be enforced except up to the level of damages and interest awarded to the claimant (unless the court gives particular permission). B. If the claimant loses the case or any aspect of it, the costs order against them cannot be enforced except up to the level of damages and interest awarded to the claimant (unless the court gives particular permission). C. If the claimant loses the case or any aspect of it, the costs order against the claimant cannot be enforced except up to the value of the underlying claim as set out in the claim form (unless the court gives particular permission). D. If the claimant wins the case or any aspect of it, the costs order against the defendant cannot be enforced except up to the level of damages and interest awarded to the claimant (unless the court gives particular permission). E. If the claimant loses the case or any aspect of it, the costs order against the defendant is restricted to the level of damages and interest awarded to the claimant (unless the court gives particular permission).

B

A is a company director. Shareholders holding 7% (the 'Shareholders') of the share capital of the company have served notice on the company board of directors (the 'Board') of intention to remove A as a director. The next general meeting is due to be held in exactly one calendar months' time. The company has articles in the form of unamended model articles. Which of the statements below provides the best advice to the Board concerning the resolution to remove A as a director (the 'Resolution')? A. The Shareholders do not represent sufficient of the voting rights of the company to have the right to call a general meeting to move the Resolution. B. The Board should put the Resolution on the agenda for the upcoming general meeting, since if the Board does not do so, then the Shareholders can call a general meeting to move the Resolution. C. The Board has 28 days in which to decide whether to put the Resolution on the agenda of the next general meeting. D. The Shareholders have not given sufficient notice to move the Resolution for the upcoming general meeting, therefore the Board do not need to put the Resolution on the agenda for this general meeting. E. The Board can refuse to put the Resolution on the agenda of the next general meeting.

B

A minority shareholder with 5% of the shares in a company is very concerned about the company's current financial situation which has gone from bad to worse due to serious financial mismanagement by the company's finance director over a period of several years. The other shareholders in the company are all directors and are unwilling to either remove the director or to bring a claim against them. The minority shareholder would like the other shareholders or the company to purchase their shareholding at the market value, but the other shareholders have indicated they are not willing to do this. What claim could the minority shareholder bring in these circumstances? Select one alternative: A. The shareholder could bring an action for unfair prejudice against the finance director. B. The shareholder could bring an action for unfair prejudice against the company. C. The shareholder could bring an action for unfair prejudice against all the directors. D. The shareholder could bring a derivative action against the company. E. The shareholder could bring a derivative action against the finance director.

B

A private interior design company specialises in penthouse apartments and loft conversions. During its last financial year, the company purchased freehold office premises at a cost of £160,000. In order to do this, it took out a loan, on which it paid interest of £10,500 during the year. The company refitted the premises, which were not in keeping with its design criteria, at a cost of £14,000. Whilst the improvements were being made, the company rented temporary premises on a short-term lease, paying £35,000 in rent. The company also incurred business entertainment expenses of £8,000. The company had trading receipts of £555,000 in the relevant financial year and other deductible expenditure in the sum of £105,000. It made no disposals of chargeable assets during the year. What is the company's TTP for the year? A. £76,855 B. £404,500 C. £244,500 D. £390,500 E. £396,500

B

A private limited company had an overdraft with a bank which as at three months ago stood fully drawn at £500,000. The company became unable to meet its debts as they fell due and therefore requested that the bank extend the overdraft to £750,000. The bank agreed to do this on the basis that the company granted a floating charge over all of the assets of the company to secure the whole overdraft amount of £750,000. The additional £250,00 was advanced and the floating charge granted at the same time two months ago. The floating charge was duly registered at Companies House. One month ago, the company was put into liquidation. Will the floating charge be effective security for the overdraft? A. The floating charge will be valid security for the additional £250,000 at the point at which it is granted and will be invalid against the liquidator in respect of the £500,000 already drawn. B. The floating charge will be invalid against the liquidator in respect of the full £750,000 until the overdraft is repaid and redrawn at which point it will be valid security for the monies redrawn. C. The floating charge will be valid security for the full £750,000 since it has been properly registered. D. The floating charge will be valid security for the existing £500,000 at the point at which it is granted and will be invalid against the liquidator in respect of the additional £250,000. E. The floating charge will be invalid against the liquidator in respect of the full £750,000 at the point at which it is granted.

B

A private limited company has been put into insolvent liquidation. At the time of the liquidation, the company had a number of unsecured creditors and 5 employees who are owed £1000 each in respect of wages for work carried out in the two months prior to the liquidation. From where will the employees recover the wages they are owed? A. From funds for the preferential creditors B. From funds for the preferential and unsecured creditors C. From funds for the preferential creditors and the prescribed part fund D. From funds for the unsecured creditors E. From the prescribed part fund

B

A private limited company is in insolvent administration. 3 days before the administrator was appointed, one of the company's directors transferred a delivery van from the company to themselves for no consideration. The administrator has applied to court for an order that the director pay the company for the van. Which of the following statements best explains whether or not the administrator is likely to obtain the remedy sought? A. The administrator is likely to obtain the remedy sought. The transaction is a voidable preference with a person connected to the company. There will be a presumption that the company was insolvent at the time or became so as a result. B. The administrator is likely to obtain the remedy sought. The company has entered into a transaction at an undervalue at a relevant time with a person connected to the company. There will be a presumption that the company was insolvent at the time or became so as a result. C. The administrator is likely to obtain the remedy sought, provided that it can prove that the company was insolvent at the time or became so as a result. D. The company has entered into a transaction at an undervalue at a relevant time. E. The administrator is likely to obtain the remedy sought if it can be shown that the transaction was carried out with an intent to defraud creditors.

B

A private limited company is in liquidation. The company granted a floating charge to a supplier over stock on 13 March 2008. This charge was registered at Companies House on 20 March 2008. The company also granted a floating charge to its lender to secure an overdraft facility on 14 March 2008 which was registered at Companies House on 17 March 2008. There are no fixed charge holders and all sums due to HMRC have been paid. There are two employees with claims for unpaid salary. The liquidator has realised all the company's assets. There will be insufficient sums to pay unsecured creditors in full. Which statement best describes the order in which the liquidator should distribute the monies after payment of their costs? A. (1) Preferential creditors (2) the supplier (3) the lender (4) the unsecured creditors. B. (1) Preferential creditors (2) set aside the prescribed part (3) the supplier (4) the lender (5) the unsecured creditors. C. (1) Set aside the prescribed part (2) the lender (3) the supplier (4) the unsecured creditors. D. (1) Preferential creditors (2) set aside the prescribed part (3) the lender (4) the supplier (5) the unsecured creditors. E. (1) Set aside the prescribed part (2) the supplier (3) the lender (4) the unsecured creditors.

B

A private limited company started trading in February two years ago. It has chosen the calendar year as its financial year, so its first accounting period ended on 31 December of the year in which it commenced trading. During this first accounting period, the company made a trading loss of £50,000 in September. The company made no chargeable gains or losses during this first accounting period. In its second accounting period, which ended on 31 December the following year, the company made a trading profit of £25,000. The company made no capital gain or losses during the second accounting period. Can the trading profit of £25,000 made in the second accounting period be set off against the trading loss of £50,000 from the first accounting period? A. No, because a trading loss can only be set against trading profits or chargeable gains in the same accounting period. B. Yes, because there were no trading profits or chargeable gains in the first accounting period to offset the £50,000 trading loss. C. Yes, because no trading or capital losses were incurred in the first accounting period. D. No, because a trading loss can only be set off against trading profits from an earlier accounting period. E. No, because the company was not carrying on business for a full 12 month period before the accounting period in which the trading loss was incurred.

B

A private limited company, which operates a publishing business, has no subsidiaries and is owned by individual shareholders. One of its directors wishes to undertake some home improvements and has obtained a quotation of £8,000 from a firm of builders. The director has asked the other board members if the company would pay this sum to the builders up-front, on condition that the director repay the company in monthly instalments over the coming year. The board is happy to approve such an arrangement and has asked you whether or not it also requires shareholder approval. Which of the following comprises the best advice to the company's board? A. No shareholder resolution is necessary because the company is not a wholly-owned subsidiary of any other company. B. No shareholder resolution is necessary because the Companies Act 2006 does not require approval of this transaction. C. An ordinary resolution is necessary because the transaction is a quasi-loan. D. An ordinary resolution is necessary because the transaction is a credit transaction. E. No shareholder approval is necessary because the value of the transaction is below £10,000.

B

A solicitor acts for a client in relation to the acquisition of a private limited company. Two days before the transaction is due to complete the solicitor suspects that his client will be using the transaction to launder money. The solicitor reports this to the nominated officer who makes a suspicious activity report to the relevant authority What action should the solicitor now take? A. Proceed with the transaction as the solicitor has made the disclosure to the nominated officer. B. Proceed with the transaction only after receiving authorisation from the relevant authority. C. Proceed with the transaction after a period of three days if no response is received from the relevant authority. D. Explain to the client that he cannot act as a suspicious activity report is pending. E. Explain to the client that a suspicious activity report has been made and then proceed with the transaction.

B

A solicitor has been instructed on behalf of a supermarket chain to act in relation to a breach of contract claim against one of the supermarket's suppliers. The supermarket chain is a private company. Having completed the requirements set out in the Practice Direction on Pre-action Conduct and having failed to settle the claim, the solicitor drafts the particulars of claim on behalf of their client. The managing director of the supermarket chain will sign the statement of truth on the particulars of claim. Which of the following gives the correct format for the statement of truth? A. The Claimant believes that the facts stated in these particulars of claim are true. I understand that proceedings for contempt of court maybe brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth. B. The Claimant believes that the facts stated in these particulars of claim are true. The Claimant understands that proceedings for contempt of court maybe brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth. C. I am duly authorised by the Claimant to sign these particulars of claim. I understand that proceedings for contempt of court maybe brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth. D. The Claimant understands that proceedings for contempt of court maybe brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth. E. I believe that the facts stated in these particulars of claim are true. I understand that proceedings for contempt of court maybe brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.

B

An individual wants to acquire 45% of the voting shares in Company A from another company. The individual already owns the remaining 55% of the voting shares in Company A. The individual instructs his solicitor to advise him on the purchase and to draft and negotiate the necessary documentation. Neither the solicitor nor their firm is authorised by the Financial Conduct Authority to carry on 'regulated activity' as defined in the Financial Services and Markets Act 2000 and related secondary legislation. Which of the following statements correctly explains why the solicitor can advise the individual on the sale? Select one alternative: A. The solicitor can act because giving this advice to the individual is incidental and arises out of the provision of professional services to the individual. B. The solicitor can act because the shares together with the shares already owned by the individual is more than 50% of the voting shares in Company A. C. The solicitor can act because FSMA 2000 does not apply as shares in private companies are not specified investments. D. The solicitor can act because the individual is buying more than 25% of the voting shares in Company A. E. The solicitor can act because FSMA 2000 does not apply as giving this advice is not a specified activity.

B

Client A and client B are looking to start up a new business offering commercial cleaning services locally. The only requirements of the clients are that (i) the profits and capital of the business are split equally between them and (ii) their liability is limited to their investment in the business (the 'Agreed Terms'). Provided that these requirements are met, the clients want as little formality and documentation as possible. What type of partnership would be most appropriate for the clients? A. A limited liability partnership because although it is not a separate legal entity it does offer limited liability and does not require a written agreement to operate on the Agreed Terms. B. A limited liability partnership because it is a separate legal entity offering limited liability and does not require a written agreement to operate on the Agreed Terms. C. A limited liability partnership because although it requires a written agreement to operate on the Agreed Terms, it is a separate legal entity offering limited liability. D. A partnership because although it requires a written agreement to operate on the Agreed Terms and is not a separate legal entity, it does offer limited liability. E. A partnership because although it is not a separate legal entity, it offers limited liability and does not require a written agreement to operate on the Agreed Terms.

B

In a PI claim for damages of £15,000, there is likely to be oral evidence from one witness of fact from each party and the written expert evidence of a single joint expert. The trial is likely to last for one day. What track is most likely to be the normal track for this case to be allocated to? A.Small claims track B.Fast track C.Multi track D.PI claims are not allocated to a track E.More information is needed to allocate a track

B

In an appeal before the Court of Appeal, the appellant relies in argument on an earlier decision of the Judicial Committee of the Privy Council (JCPC) which indicates that the appeal should be allowed. The respondent relies in argument on an earlier decision of the Court of Appeal which indicates that the appeal should not be allowed. How should the Court of Appeal treat the two decisions to which it has been referred? A. The court should consider itself bound by the earlier decision of the JCPC. B. The court should consider itself bound by the earlier decision of the Court of Appeal. C. The court should consider itself bound by both earlier decisions and must transfer the appeal to a higher court. D. The court should treat both earlier decisions as having persuasive value only and must decide which of the two to follow. E. The court should treat both earlier decisions as without precedent value and should make its decision without regard to either.

B

In an appeal before the Court of Appeal, the appellant relies in argument on an earlier decision of the Judicial Committee of the Privy Council (JCPC) which indicates that the appeal should be allowed. The respondent relies in argument on an earlier decision of the Court of Appeal which indicates that the appeal should not be allowed. How should the Court of Appeal treat the two decisions to which it has been referred? A. The court should treat both earlier decisions as having persuasive value only and must decide which of the two to follow. B. The court should consider itself bound by the earlier decision of the Court of Appeal. C. The court should consider itself bound by the earlier decision of the JCPC. D. The court should consider itself bound by both earlier decisions and must transfer the appeal to a higher court. E. The court should treat both earlier decisions as without precedent value and should make its decision without regard to either.

B

On Monday 1 February, the Claimant issued a Claim Form in the High Court against the Defendant claiming £24,000 in damages. The Claim Form was served by first class post on the Defendant, being posted on Tuesday 2 February. Particulars of claim have not yet been prepared. Today's date is Wednesday 17 February. The Defendant has not acknowledged service nor entered a Defence. Can the Claimant obtain judgment in default? Select one alternative: A. No, because the time period for responding will not elapse until tomorrow. B. No, because the time period for responding has not yet started to run. C. Yes, because the time period for responding elapsed 2 day ago. D. Yes, because the time period for responding elapsed 1 day ago. E. No, because the time period for responding will elapse at the end of today.

B

The High Court allows a claim for breach of statutory duty in reliance on an interpretation of legislative provision which is irreconcilable with an earlier, binding Supreme Court decision. Does the Defendant have good grounds for an appeal in relation to the finding in favour of the claimant? A. Yes, because the decision of the court was unjust. B. Yes, because the decision of the court was wrong. C. Yes, because the decision was beyond the power of the court. D. No, because the grounds for an appeal are not made out. E. No, because the decision related to the common law which is decided on a case-by-case basis.

B

The claimant is an investor bringing a claim against a former advisor, alleging negligent advice. Your client is the defendant advisor. The claimant alleges in paragraph 6 of its particulars of claim that 'in breach of the implied term of the contract to exercise reasonable skill and care, the defendant failed to provide the claimant with adequate information from which to make an informed decision as to whether or not to proceed with the investment'. The advisor tells you that this is not true and that the claimant was provided with adequate information in a letter dated 6 April from which to make an informed decision. Your case analysis confirms that the information in the letter was adequate to discharge the advisor's duty of care. How should the defendant respond to paragraph 6 of the particulars of claim in the defence? A. 'The defendant requires proof of paragraph 6 of the particulars of claim as the claimant was provided with adequate information with which to make an informed decision in a letter dated 6 April.' B. 'The defendant denies paragraph 6 of the particulars of claim as the claimant was provided with adequate information with which to make an informed decision in a letter dated 6 April.' C. 'The defendant requires proof of paragraph 6 of the particulars of claim.' D. 'The defendant denies paragraph 6 of the particulars of claim.' E. 'The defendant admits paragraph 6 of the particulars of claim.'

B

Which of the following types of work would require your firm to carry out customer due diligence pursuant to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ('MLR').? A. Arranging for the cash purchase of a work of art for €14,500 on behalf of a new client to the firm. B. Agreeing to act as the business address for a Bermuda-based corporate client which has customers in England and wants to have an English address in case its customers need to contact it. C. Advising a UK-based client on their claim for £40,000 for personal injury following a road traffic accident D. Advising a UK-based client being sued by a Greek company in relation to an intellectual property claim, which if the client loses, will cost the client a minimum of €10,000,000. E. Advising an insurance company on their defence of a claim for £40,000 for personal injury following a road traffic accident

B

You are a solicitor in the corporate department of Price Prior. You recently acted for Herbert in connection with the sale of his personal training business and that sale has now concluded. Today Herbert has come to see you. Herbert tells you that following the sale, he now has £50,000 cash and he would like some advice about how to invest this money. He is considering using all the money to buy shares in Magwitch Enterprises PLC ('MEP'). He would like your advice on whether shares are generally a good investment at the moment and, in particular, whether or not he should buy the shares in MEP. Which ONE of the following statements is CORRECT in relation to the above scenario? A. You would be able to give the advice to Herbert without being authorised by the FCA because giving this advice to Herbert could reasonably be regarded as necessary to the other non-regulated work you are doing for him. B. You would not be able to advise Herbert without being authorised by the FCA because the advice would not arise out of or be complementary to the provision of professional services to Herbert. C. You would not be able to give the advice to Herbert without being authorised by the FCA because the advice is not incidental to the provision of professional services to Herbert. D. You would be able to give Herbert the advice without being authorised by the FCA, because buying shares is not a specified activity. E. You would be able to give Herbert the advice without being authorised by the FCA because you would not be advising on the merits of Herbert buying the shares in MEP.

B

You are advising an executive director of a private company limited by shares (with unamended Model Articles) in respect of the upcoming general meeting agenda item of his removal from the board of directors by the shareholders. Your client is not only a director, but he is also a minority shareholder in the company with 10% of the company's issued share capital. All of the shareholders in the company previously signed a shareholders' agreement which included the following clause: 'The shareholders shall, for as long as they hold shares in the capital of the company, procure that the company shall not without the prior written consent of all shareholders remove any director.' In light of the above, which of the following statements represents the advice you would give? A. Your client can be removed as a director of the company by the shareholders passing an ordinary resolution. As your client has an interest in his own removal, he will not be able to vote against his removal in the general meeting. If removed, your client could bring a claim for breach of contract against the other shareholders who voted in favour of his removal. B. Your client can be removed as director of the company by the shareholders passing an ordinary resolution. However, if removed, your client could bring a claim for breach of contract against the company. C. Your client can not be removed as a director of the company as he is an employee of the company in his role as an executive director. As an employee of the company his position as a director is entrenched. If he was removed as a director, this would automatically also end his employment and breach his employment contract. D. Your client can be removed as a director of the company by the shareholders passing an ordinary resolution. However, if removed, your client could bring a claim for breach of contract against the other shareholders who voted in favour of his removal. E. Your client can not be removed as a director. The shareholders' agreement requires unanimous consent for the removal of a director and your client will not vote in favour of his own removal.

B

You are instructed on behalf of the claimant in a breach of contract claim which is legally and factually very complicated. The claim is worth approximately £150,000 and, amongst other issues, the court will be invited to interpret a particular term of the contract in order to decide the case. This particular term is a common term within the context of contracts of this nature and the outcome of the case will have important implications for a large number of other businesses which use contracts with the same term. What is the best advice to give the claimant in relation to where to start proceedings? A. The claimant must issue this claim in the High Court. B. The claimant could issue the claim in the High Court or County Court, but the High Court is more appropriate. C. The claimant must issue this claim in the County Court. D. The claimant could issue the claim in the High Court or County Court, but the County Court is more appropriate. E. The claimant must issue this claim in the Magistrate's Court.

B

You are the only apprentice solicitor working in the property department of a law firm solely based in London. Last week a new client, James, specifically asked to speak to you. James told you that he is currently living in Manchester and that his close friend, Raj, has offered to give him £750,000 in cash to help James buy his first property. This sum will cover the purchase price, together with all legal costs and disbursements. James has now found a suitable property in Manchester and he would like you to act for him on the purchase. James told you Raj will send the £750,000 to your firm's client account within seven days. Earlier today you were contacted by your firm's accounts department regarding the sum of £7,500,000 which had arrived from Raj. You have just received an email from James apologising that his friend has made an overpayment, requesting that the sum of £6,750,000 is transferred to Raj's solicitors in Birmingham. Which ONE of the following statements is CORRECT? A. You do not need to report that matter to the MLRO at your firm but you are required to notify Raj's solicitors in Birmingham that he may be laundering money through their bank account. B. You need to report the matter to the Money Laundering Reporting Officer ('MLRO') at your firm. You must ensure that you do not inadvertently alert James to your suspicions. C. You need to report the matter immediately to the MLRO at your firm and instruct the accounts department to transfer all of the money (ie £7,500,000) to Raj so that you do not alert James to your suspicions. D. You should forward the money in full (ie £7,500,000) to James to ensure that you are not involved in any money laundering offences. E. You need to report that matter immediately to the MLRO at your firm and instruct the accounts department to transfer £6,750,000 to Raj as soon as possible so that it is not considered the proceeds of crime.

B

You have just been instructed by a new client. Today's date is 15th December and you advise your client that the limitation for its proposed claim expires on 27th December in 12 days' time. The Practice Direction on Pre-action Conduct applies to the claim. Your client would like to proceed with the claim, but will not be available to assist with case preparation until early in January. Your client wants to know whether it is possible to postpone issuing proceedings until early in January? What advice should you give your client? A. Your client should write a letter to the defendant setting out the nature of the proposed claim and suggesting that they agree to postpone proceedings until early in January. B. Your client should issue proceedings straight away and then ask the defendant to agree to an application by your client to the court to stay proceedings so both parties can comply with the Practice Direction on Pre-action Conduct. C. Your client should issue the claim form straight way but wait to serve it until the beginning of January when it is able to attach the particulars of claim to provide the defendant with more information on its underlying claim. D. Your client should write a letter to the defendant setting out the nature of the proposed claim and await a response as a demonstration of good conduct in the proceedings in accordance with the Practice Direction on Pre-action Conduct. E. Your client should comply with the Practice Direction on Pre-action Conduct prior to issuing proceedings as failure to do so will result in adverse costs consequences.

B

You receive instructions from a client, a Russian national living in London, to set up a trust for his grandchildren. The client informs you he will deposit £500,000 into your firm's account for the trust. A day later your accounts department informs you that the client has deposited £600,000 into the firm's account. The client sends you an email asking you to transfer the over-payment of £100,000 to his cousin at an account registered in Russia. What is the most appropriate action you should take? A. Instruct your accounts department to send the over-payment of £100,000 to the account nominated by the client, so as not to alert him to your suspicions, and report the matter to your firm's Money Laundering Reporting Officer. B. Report the matter to the Money Laundering Reporting Officer ('MLRO') at your firm. C. Undertake no further work on the matter until you hear back from the MLRO and ensure that you do not alert the client to your suspicions. C. Send a suspicious activity report to the National Crime Agency. Undertake no further work on the matter until you hear back from them and ensure that you do not alert the client to your suspicions. D. Send a suspicious activity report to the National Crime Agency. Continue to work on the matter so as not to alert the client to your suspicions. E. Instruct your accounts department to send the over-payment of £100,000 to the account nominated by the client. You do not need to report your suspicions to your firm's Money Laundering Reporting Officer or the National Crime Agency because you are not operating in the regulated sector.

B

Your client is a company who is intending to commence proceedings against a partnership claiming professional negligence. The claim is for £500,000. As required, the company and the partnership have been following the Professional Negligence Pre-action Protocol. Recently, however, the solicitors for the potential defendant partnership were 2 days late in responding to the letter of claim without seeking an extension or offering any explanation. Which of the following statements best describes what your client should do, assuming it wishes to commence proceedings as soon as possible? A. The company should commence proceedings as the Pre-action Protocol has not been followed by the partnership. B. The company should ignore the fact that the partnership was 2 days late and carry on complying with the Pre-action Protocol. C. The company should expect more favourable case management orders since it has complied with the protocol and the partnership has not. D. The company should not raise the partnership's non-compliance with the protocol at the moment but instead ask the court to make an adverse costs order at the end of the case (CPR 44.2) to reflect the non-compliance. E. The company should raise the partnership's non-compliance with the court and ask the court to impose costs sanctions for non-compliance with the protocol.

B

Your client is a manufacturing company ('Company A'). The managing director of Company A ('the MD') asks to speak to you about a proposed contract between Company A and a website design company ('Company B'). Company B is run by the MD's close friend. The managing director has even invested in Company B himself and now owns 5% in Company B. The MD wants to discuss this proposed contract at the upcoming board meeting of the 5 directors of Company A. The other directors of Company A are already aware that the MD has shares in Company B. Company A is a private limited company with unamended Model Articles. Which of the following statements best summarises the advice you should give to the MD of Company A? A. The MD should not declare their interest in the proposed contract with Company B as the other directors are already aware that the MD has an interest in the proposed transaction. B. The MD should declare their interest in the proposed contract with Company B at the board meeting of Company A. The MD will not be allowed to vote on the proposed contract at the board meeting. C. The MD has a duty under s 175 of the Companies Act to avoid a conflict of interest. They are at risk of breaching that duty. They should therefore not propose that this contract is entered into at the board meeting of Company A. D. The MD should sell their 5% shares in Company B to avoid a breach of their directors' duties in the Companies Act 2006. E. The MD should declare their interest in the proposed contract with Company B. If they do not, all 5 directors of Company A are at risk of breaching their directors' duties contained within the Companies Act 2006.

B

Your client, a British national, is purchasing a flat for her daughter for a price of £750,000. She is funding 50% of the purchase in cash from the sale of some shares, and 50% by a mortgage with a high street bank. You have not acted for the client before and you expect that this will be a one-off transaction for her. Which of the following best explains the action you should take with regard to customer due diligence? A. You should carry out simplified CDD on the client because there is nothing to suggest that this client presents a high risk of money laundering. B. You should carry out standard CDD on the client because there is nothing to suggest that this client presents a high risk of money laundering. C. You should carry out enhanced CDD on the client because she presents a high risk of money laundering. D. You should carry out ongoing monitoring on the client because you have not acted for her before. E. You should carry out standard CDD on the client and identify and verify the beneficial owner of the high street bank.

B

A claimant in a construction dispute is pursuing a claim for £450,000 against a defendant contractor. The claim arose due to losses suffered when a building project was not completed on time. The case has been allocated to the multi-track and the judge has made a direction for standard disclosure by list of documents. One of the documents in the claimant's file is a draft letter written at the time of the building project by the managing director of the claimant to the defendant. The draft letter states that the completion date for the building project could be pushed back indefinitely to allow the defendant to carry out a proper job. This letter was never sent and the managing director of the claimant wants to know whether she can prevent the other side from seeing it. Will the defendant be entitled to inspect the letter? A. No, because it is a document which supports the defendant's case but it is covered by legal advice privilege. B. No, because it is a draft document that was written before the dispute arose so it is not subject to standard disclosure. . C. Yes, because it is an open document between the two parties and so it is not covered by legal professional privilege. D. No, because it is a document which supports the defendant's case but it is covered by litigation privilege. E. Yes, because it is a document which supports the defendant's case and is not covered by legal professional privilege.

C

A claimant is bringing a civil action against a defendant for £400,000. After exchange of witness evidence, the defendant serves on the claimant a Part 36 offer to settle in the sum of £300,000. The claimant rejects this offer and the case proceeds to trial where the claimant is awarded £300,000 (all figures are inclusive of interest). Which ONE of the following statements best describes the likely costs consequences? A. The claimant will pay the defendant's costs before the expiry of the relevant period, and the defendant will pay the claimant's costs from the expiry of the relevant period, pursuant to CPR Part 36, because the claimant beat the defendant's offer. B. There are no part 36 costs consequences, because the claimant rejected the defendant's offer within the relevant period. C. The defendant will pay the claimant's costs before the expiry of the relevant period, and the claimant will pay the defendant's costs from the expiry of the relevant period, pursuant to CPR Part 36, because the claimant failed to beat the defendant's offer. D. The claimant will have to pay the defendant's costs of the proceedings pursuant to the general rule because the claimant has refused a reasonable offer. E. The claimant will get its costs pursuant to the general rule because it has been successful at trial.

C

A claimant succeeds in a professional negligence claim against a defendant company. Judgment is for £80,000 plus costs of £35,000. The defendant company refuses to pay the judgment, indicating that it has no money to do so. The claimant believes the defendant has substantial cash in the bank. What is the best way for the claimant to receive confirmation as to whether this is the case? A. Draw the defendant's conduct to the court's attention in relation to costs. B. Apply for specific disclosure of documentation in relation to the assets. C. Apply for an order that a representative from the defendant should attend court to answer questions about the assets. D. Apply for a witness summons in relation to the defendant. E. Apply for a High Court Execution Officer to make enquiries as to the defendant's assets.

C

A client is claiming damages for negligence by a solicitor. The solicitor works in a city law firm's commercial property department and is listed in Chambers & Partners as a specialist in commercial property law. It is alleged that the solicitor negligently advised the client about the meaning of a restrictive covenant which has directly let to the client suffering loss. Which of the following statements best describes the standard of care that the solicitor should have exercised in this case? A. he solicitor must act to the standard of a reasonably competent practitioner. B. The solicitor must act to the standard the majority of solicitors would act. C. The solicitor must act to the standard of a reasonably competent practitioner specialising in commercial property. D. The solicitor must act to the standard acceptable to a responsible body of practitioners. E. The solicitor must act to the standard of a reasonably competent practitioner specialising in commercial property and recommended in Chambers & Partners.

C

A company incorporated in 2015 with unamended model articles is planning to enter into a service contract with one of its directors. The draft contract stipulates a term of one year with the option for the director only to renew the contract for a further two years. There is also a clause allowing the company to terminate the contract at any time on giving 3 months' notice.Does the proposed service contract require prior shareholder approval? Select one alternative: A. Yes, because the contract could potentially run for more than two years. B. No, because the service contract has an initial term of under two years. C. No, because the service contract's 'guaranteed term' is three months. D. No, because approving service contracts falls under the director's general authority to manage the company's business. E. Yes, because any contract between a company and one of its directors requires prior approval by ordinary resolution.

C

A company wishes to issue preference shares to a new shareholder. The preference shares carry a right to participate in profit and capital on winding up. The company currently has only ordinary shares in issue and articles in the form of unamended model articles. Which of the following statements sets out the shareholder resolutions which are required? A. A special resolution to give directors authority to allot the shares, a special resolution to disapply pre-emption rights, a special resolution to amend the articles. B. An ordinary resolution to give directors authority to allot the shares and a special resolution to amend the articles. C. An ordinary resolution to give directors authority to allot the shares, a special resolution to disapply pre-emption rights and a special resolution to amend the articles. D. An ordinary resolution to give directors authority to allot the shares, a special resolution to disapply pre-emption rights, an ordinary resolution to amend the articles. E. A special resolution to disapply pre-emption rights and a special resolution to amend the articles.

C

A construction company intends to sue one of its sub-contractors, an electrician, for breach of contract. The claim form has been issued, but it has not yet been served. Before service of the claim form, the construction company decides to add a new defendant, a plumber, to the claim as an additional party. Which of the following best describes the position of the construction company? A. The construction company should seek the written consent of the plumber to be added as an additional party. B. The construction company should seek the written consent of the electrician to add the additional party. C. The construction company will not require the court's permission to add the additional party. D. The construction company will require the written consent of both the electrician and the plumber to add the additional party. E. The construction company should apply to the court for permission to add the additional party.

C

A motorcyclist was involved in a road traffic accident on 5 May 2018 caused by a driver not exercising the care required. The parties exchanged names and contact details on the scene. The motorcyclist immediately suffered headaches and sickness but did not seek medical attention for these until 12 July 2018, by which time these symptoms had persisted for more than two months. What is the latest date the motorcyclist can bring a claim for damages for personal injuries against the driver? Select one alternative: A. 12 July 2024 B. 12 July 2021 C. 5 May 2021 D. 5 May 2024 E. 5 May 2019

C

A person has taxable income of £45,000. In the same tax year, after the deduction of their annual exemption, they have chargeable gains of £15,000. They have no capital losses for capital gains tax (CGT) purposes. The basic rate tax band for the relevant tax year is £0 - £37,700. The two rates of CGT for the relevant tax year are 10% and 20%. Based on the above information, what is the person's CGT liability? A. £5,250 B. £3,000 C. £540 D. £1,500 E. £270

C

A private limited company is in financial difficulty. An unsecured creditor issued a winding up petition two days ago and the company has today received notice that an administrator has been appointed by the bank which has a floating charge over substantially all of the assets of the company. What will be the impact of the administration on the winding up petition issued by the unsecured creditor? A. The winding-up petition proceedings would be stayed, but the unsecured creditor could appoint its own administrator to consent to the proceedings continuing. B. The winding-up petition proceedings would continue but could be stayed at the discretion of the administrator. C. The winding-up petition proceedings would be stayed and would require the consent of the administrator or the court to continue. D. The winding-up petition proceedings would be stayed but the creditor could issue could proceedings for recovery of the debt. E. The winding-up petition proceedings would continue, as the petition was issued prior to the administration.

C

A private limited company runs a car dealership and is seeking to borrow £1,000,000 by way of a loan from a bank. The bank is considering the security that it should consider taking from the company to secure the loan. The most valuable category of assets owned by the company is the vehicles which it has for sale on its forecourt. What would be the most appropriate form of security interest for the bank to take over the vehicles? A. A fixed charge because the vehicles are a type of permanent asset. B. A charge by way of legal mortgage because the vehicles are a type of property. C. A floating charge because the vehicles are a type of fluctuating asset. D. A debenture because this is the most comprehensive form of security the bank can take. E. A pledge, because this is the most secure form of security the bank can take.

C

A private limited company with unamended model articles has 100 ordinary £1 shares as its issued share capital. The company would like to issue an additional 100 ordinary £1 shares to a new shareholder as quickly as possible, so ideally without needing to obtain shareholder approval. Would it be possible to issue the shares without passing any shareholder resolutions? A. Yes, since the directors will have automatic authority to issue the new shares because the company has only one class of shares in issue and the new shares to be issued are of the same class. B. No, since an ordinary resolution giving the directors authority to allot the new shares is required together with an ordinary resolution to disapply pre-emption rights. C. No, since a special resolution is required to disapply pre-emption rights in relation to the new shares. D. No, since an ordinary resolution giving the directors authority to allot the new shares is required. E. No, since an ordinary resolution is required to disapply pre-emption rights in relation to the new shares.

C

A solicitor acts for a client who is raising finance secured against his home to fund his new business. The solicitor will be providing advice and preparing all the necessary documentation in connection with the mortgage. The client asks the solicitor to explain the key differences between a repayment mortgage and an endowment mortgage. Neither the solicitor nor his firm is authorised by the Financial Conduct Authority to carry on a regulated activity. Can the solicitor give the explanation requested about the types of mortgages? A. Yes, because such advice is a necessary part of the provision of his legal services. B. Yes, because he is subject to the Solicitors' Financial Services (Scope) Rules 2001 and therefore falls within an exemption from the Financial Services and Markets Act 2000. C.Yes, because the provision of generic advice is outside the scope of the Financial Services and Markets Act 2000. D.No, because such advice does not fall within an exemption from the Financial Services and Market Acts 2000. E. No, because he is not authorised by the Financial Conduct Authority to give advice in respect of either type of mortgage.

C

A solicitor acts for a company that is selling all the shares in its wholly owned subsidiary by way of auction. The solicitor is preparing the information memorandum to send to potential buyers, some of whom are companies, some of whom are wealthy individuals. Neither the solicitor nor the firm is authorised by the Financial Conduct Authority ('FCA'). Which one of the following statements is correct? A. The solicitor can send the information memorandum to the potential buyers without getting it approved by an authorised person because the information memorandum is a necessary part of the auction process. B. The solicitor can only send the information memorandum to high net worth companies and high net worth individuals, otherwise she would have to get the document approved by an authorised person. C. The solicitor can send the information memorandum to the potential buyers without getting it approved by an authorised person because the transaction is to sell 50% or more of the shares in the subsidiary. D. The solicitor can send the information memorandum to the potential buyers because it is not a financial promotion. E. The solicitor cannot send the information memorandum to the potential buyers unless she gets the document approved by an authorised person.

C

A solicitor in a law firm has received a phone call from the managing director of a private limited company incorporated in the UK, which is a new client. The managing director wants to know why the solicitor's firm is asking for documents to verify the identity of the company's shareholder. The company's shareholder lives in Russia and owns and holds the entire shareholding of the company. Which of the following responses best explains the advice the solicitor should give to the managing director? A. The solicitor is under an obligation to identify and verify the identity of the company's shareholder because the shareholder lives outside the UK. B. The solicitor is under an obligation to identify and verify the identity of the company's shareholder because the shareholder lives in Russia. C. The solicitor is under an obligation to identify and verify the identity of the company's shareholder because the shareholder owns more than 25% of the shares. D. The structure of the company and the way the shares are held by the shareholder may raise issues about tax evasion. E. The solicitor is considering making a suspicious activity report to the firm's nominated officer.

C

At the conclusion of a fast-track trial on Monday 5 November, the court gives judgment for the claimant in the sum of £18,000. The order is subsequently drawn up by the court on Wednesday 7 November, and received by the defendant (in the post) on Friday 9 November. By when must the defendant pay the judgment sum (unless ordered otherwise)? A. Wednesday 21 November B. Wednesday 14 November C. Monday 19 November D. Monday 12 November E. Friday 16 November

C

In a case involving four defendants, one of the defendants amends its defence to allege that the claimant was contributorily negligent. The court grants permission for this amendment. Which party will usually pay the costs of and arising from the amendment? A. The unsuccessful party at the end of the trial in accordance with the general rule on costs (CPR 44.2). B. All the defendants C. The defendant applying for the amendment D. All the parties to the action E. The claimant

C

The claimant claims £32,000. The defendant pleads £8,000 'set off' in its defence and counterclaim against the claimant. If the claimant is successful at trial and the defendant is also successful at trial in its counterclaim, what is the effect of the judgment? A. Defendant pays the claimant £32,000 B. Claimant pays the defendant £8,000 C. Defendant pays the claimant £24,000 D. Defendant pays the claimant £8,000 E. Defendant pays the claimant nothing

C

The claimant in a multi-track claim relating to breach of contract is preparing for a costs and case management conference which takes place in a month's time. The claim is for £850,000 and the parties are agreed on the scope of disclosure, the witness and expert evidence required, the deadlines for the service of this evidence and all other timetabling issues arising in the dispute. The one issue that is not agreed is the parties' respective estimates of likely costs. What documents must be filed by the claimant prior to (and in relation to) the costs and case management conference? A. The directions questionnaire, the costs budget, the budget discussion report, the disclosure report and agreed directions. B. The costs budget, the budget discussion report, the electronic disclosure questionnaire and proposed directions. C. The costs budget, the budget discussion report, the disclosure report and agreed directions. D. The costs budget, the budget discussion report, the electronic disclosure questionnaire and the directions order. E. The directions questionnaire, the costs budget, the budget discussion report, the disclosure report and directions order.

C

You act for a private limited company that was incorporated last year. The company's only asset is the company bank account which holds £10,000 on deposit. The company has asked for your advice on changing its current company name. Which one of the following statements is correct in relation to the company's change of name? A. The change of name will be effective as soon as the company has passed the required special resolution to change the company's name. B. The company will not be issued with a new certificate of incorporation following the change of name. The Registrar of Companies will change the company's name online at Companies House only. The change of name is effective once the Registrar of Companies has received notice of the relevant special resolution. C. The change of name will be effective once the Registrar of Companies has issued the certificate of incorporation on a change of name. D. The change of name will be effective once the Registrar of Companies has received notice of the relevant special resolution. E. The company will be issued with a new certificate of incorporation following the change of name which will confirm its new name and new company number. The change of name is effective once this new certificate has been issued by the Registrar of Companies.

C

You are acting on behalf of a private company limited by shares (currently with unamended Model Articles). The 4 individual shareholders of the company are also the only 4 directors of the company. The board of directors wish to consider ways to prevent any director being removed against their will. The board has consequently asked for ways to prevent the removal of directors taking place without the prior written consent of all of them. In light of the above, where, if anywhere, is the most appropriate place for a provision dealing with this issue to be set out? A. The company's articles of association. B. A shareholders' agreement or the company's articles of association. C. A shareholders' agreement. D. Nowhere is appropriate for this provision as the provision is contrary to the CA 2006 and so is legally unenforceable. E. The contract of employment of each director.

C

Your client has received a request for further information by letter in respect of a defence it filed to a claim against it for misrepresentation. The defence as currently drafted fails to fully detail the oral representations made by your client before the contract was entered into. Your client agrees to provide the information requested. Which of the following most accurately describes the form your client's response to the request for further information should take? A. The client should provide the information in whichever form is most proportionate including verbally, for example, in a telephone call. B. The client's response should be in writing, signed and dated but need not be verified by a statement of truth. C. The client's response should be in writing, signed, dated and be verified by a statement of truth. D. The client's response should be in the form of a letter in reply which will be signed and dated as normal. E. The client's response should take the form of an amended defence.

C

A building company is suing a sub-contractor for breach of contract in the High Court. The claim is valued at £500,000 and it is a few days before the defence is due to be served. The sub-contractor needs to collate some financial information from its quantity surveyor about the works in order to finalise its defence. The quantity surveyor has just confirmed that it is unable to supply this information for at least the next 2 weeks. The defendant requests an extension of 3 weeks to serve its defence but the building company refuses to agree this extension of time. The sub-contractor therefore applies to the court for an extension of 3 weeks. Which of the following arguments will be the most persuasive when the court is considering granting this extension? A. Whether the sub-contractor's prospects of successfully defending the claim are good. B. Whether the date of the final hearing will be affected. C. Whether the building company's prospects of success in the claim are good. D. Whether it would be just and proportionate to grant the extension due to the problem with the quantity surveyor. E. Whether the case is in the High Court

D

A claimant has commenced proceedings seeking in the region of £200,000 in relation to personal injuries. A defence has been filed defending the claim in full. It is clear that the claimant will be awarded at least £50,000 in relation to the injuries at trial, but the prospects of recovering more than this are unclear. The claimant needs to make adaptations to their house to cope with their injuries, but does not have the money to do so. Does an application for an interim payment by the claimant have good prospects of success? A. No, because the defendant has not admitted liability. B. Yes, because the claimant does not have any money to make the necessary adaptations. C. No, because the claimant has not obtained judgment against the defendant. D. Yes, because if the claim went to trial the claimant would obtain judgment for a substantial amount of money. E. No, because the prospects of recovering the majority of the claim are uncertain.

D

A claimant has made a claim for £20,000 against a defendant company in relation to a breach of contract. The court expects the trial to take 2 days. Expert evidence will be required from one expert on behalf of each party. What is the normal track for this claim, the fast track or the multi-track? Select one alternative: A. The fast track, because of the value of the claim. B. The multi-track, because of the value of the claim. C. The fast track, because of the expert evidence required. D. The multi-track, because of the estimated length of trial. E. The multi-track, because of the expert of the evidence required.

D

A claimant is pursuing an action for negligence against their solicitors in the High Court. The claim has been allocated to the multi-track and the court has ordered standard disclosure. One document being considered for disclosure is an email from the managing director at the claimant to the other members of the board of directors. The first 5 paragraphs report that month's profit figures for the claimant's business - the managing director has sent such monthly reports for many years. The claimant's profitability is an issue in dispute in the proceedings. The remainder of the email reports back from a recent meeting with solicitors and sets out the contents of the advice that was given by the solicitors to the claimant at that meeting. Which of the statements below is the most accurate as to the claimant's disclosure obligations? A. The claimant will be required to disclose the document and make it available for the defendant to inspect unredacted. B. The claimant will be required to disclose the document but can withhold inspection of the document on the grounds of legal professional privilege. C. The claimant will not be required to disclose the document as it does not meet the test for standard disclosure. D. The claimant will be required to disclose the document and it cannot be withheld from inspection but parts that repeat legal advice will likely be able to be redacted as being privileged. E. The claimant will be required to disclose the document and it cannot be withheld from inspection or redacted because the claimant has waived privilege over the document.

D

A claimant pharmaceutical company claims damages in the approximate sum of £20,000 against its defendant former employee. The claim is based on the alleged infringement of intellectual property rights in relation to a drug developed by the defendant whilst under contract and in the employment of the claimant. For the claimant, there is an important point of principle at stake and, as such, despite the relatively low value of the claim, the claimant requires the oral evidence of three separate expert witnesses and estimates that the trial will last two days. Which of the following statements most accurately describes the reasons behind and likely allocation of this claim? A. The claim is most likely to be allocated to the multi-track due to the importance of the claim to the claimant. B. The claim is most likely to be allocated to the fast track due to there being only two parties to the claim. C. The claim is most likely to be allocated to the fast track due to the value of the claim. D. The claim is most likely to be allocated to the multi-track due to the estimated length of the trial and amount of expert evidence required. E. The claim is most likely to be allocated to the multi-track due to the complexity of the claim.

D

A company raises £800,000 by way of a 3-year term loan and uses these funds to purchase some new machinery at a cost of £800,000. Which of the following statements describes the net impact of these transactions on the company's Balance Sheet? A. Increase in current liabilities by £800,000; no change on cash/cash equivalents; increase in non-current assets by £800,000; no change in Net Asset Value. B. Increase in non-current liabilities by £800,000; decrease in cash/cash equivalents by £800,000; increase in non-current assets by £800,000; decrease in Net Asset Value by £800,000. C. Increase in current liabilities by £800,000; no change on cash/cash equivalents; increase in current assets by £800,000; no change in Net Asset Value. D. Increase in non-current liabilities by £800,000; no change on cash/cash equivalents; increase in non-current assets by £800,000; no change in Net Asset Value. E. Increase in non-current liabilities by £800,000; increase in cash/cash equivalents by £800,000; increase in non-current assets by £800,000; increase in Net Asset Value by £800,000.

D

A private limited company ('the Company') proposes to pay off the bank overdraft of a director of its holding company (which is also a private limited company) on the understanding that the director will pay the Company back over time. There are no other companies associated with the Company. Which statement best explains the nature of this transaction and whether shareholder approval is required? Select one alternative: A. This is a credit transaction for the benefit of the Company's director. Shareholder approval is not required. B. This is a quasi loan to a person connected to a director of the Company. Shareholder approval is not required. C. This is a credit transaction for the benefit of a director of the Company's holding company. Shareholder approval is required. D. This is a quasi loan to a director of the Company's holding company. Shareholder approval is not required. E. This is a quasi loan to a director of the Company's holding company. Shareholder approval is required.

D

A technology firm entered into a contract with Supplier A under which Supplier A agreed to deliver a consignment of computer chips on 22 April 2020. In breach of contract Supplier A did not deliver the computer chips. On 29 April 2020 the technology firm entered into a contract with Supplier B to provide similar computer chips at twice the price agreed with Supplier A. The technology firm intends to bring a claim against Supplier A for breach of contract. What is the latest date the technology firm can bring the claim against Supplier A for breach of contract? Select one alternative: A. 29 April 2026 B. 28 April 2023 C. 21 April 2026 D. 22 April 2026 E. 22 April 2023

D

A witness statement provided by the claimant includes a reference to a letter setting out Counsel's advice to the claimant. Will the defendant be able to inspect the letter? A. No, as Counsel's advice is covered by litigation privilege. B. No, as only the claimant has the right to decide whether or not to waive privilege over this document. C. Yes, as a party may inspect a document that is referred to in a witness statement. D. Possibly, depending on the manner in which, and reasons for which, the advice is referred to in the witness statement. E. No because it is a draft document that was written before the dispute arose so it is not subject to standard disclosure.

D

Evans Ltd is acquiring the entire issued share capital in PMR Ltd. Evans Ltd is a wholly owned subsidiary of Evans Clothing Plc. PMR Ltd has a wholly owned subsidiary, PMMR Plc. Evans Ltd is taking out a bank loan to finance the acquisition. The bank will require security in respect of the loan over the assets of Evans Ltd, Evans Clothing Plc, PMR Ltd and PMMR Plc. Which of the following statements is correct in respect of prohibited financial assistance? A.All of the security options fall within the prohibited financial assistance regime B.Only the security from Evans Clothing Plc and PMMR Plc is caught by the prohibited financial assistance regime C.Only the security from PMR Ltd and PMMR Plc are caught by the prohibited financial assistance regime D.Only the security from PMMR Plc is caught by the prohibited financial assistance regime E.Only the security from PMR Ltd is caught by the prohibited financial assistance regime

D

In a breach of contract claim, the parties are due to exchange witness statements by 27 March. On 20 March, the Claimant receives notification that, due to the unavailability of a witness, it will not be possible to contact the witness and finalise her statement until 2 April. The next direction after exchange of witness statements is for experts to report, in late June. Which of the following statements best describes what Claimant should do? A. Serve the witness statements in their current form. B. Make an immediate application to extend the time for service of the witness statements until 2 April. C. Notify the court that the witness statements will be ready for exchange on 2 April and inform them that the date for exchange of witness statements will need to be delayed until then. D. Ask the Defendant for an extension of time for exchange of witness statements. E. Notify the other side that the witness statements will be ready for exchange on 2 April and inform them that the date for exchange of witness statements will need to be delayed until then.

D

The Claimant issues proceedings against Company A and Company B for breach of contract. Company A and Company B instruct their own solicitors and serve separate defences. Company A and Company B had worked together in a joint venture partnership and initially appeared equally liable for the breach of contract. On receipt of Company B's defence, it becomes clear to the Claimant that there was no joint venture agreement and on re-assessing the documentary evidence, the Claimant only has a contract with Company A. What is the best course of action for the Claimant to take? A. Discontinue the claim against Company A and company B and issue new proceedings against Company A B. Apply to strike out the particulars of claim against Company B C. Apply for summary judgment against Company A D. Discontinue the claim against Company B E. Apply for a stay of proceedings

D

The date for filing the acknowledgment (or defence), Friday 23 December, passes. Price Prior, the Claimant's solicitors, is closed for Christmas, reopening on Tuesday 3 January. On 3 January, the Claimant telephones the court to check if the Defendant has filed an acknowledgment of service. The court confirms that there is nothing on file. The Claimant successfully enters default judgment against the Defendant on 5 January. In fact, the Defendant had filed the acknowledgment at court on Thursday 22 December, but it had not been processed and had got lost in a backlog of work at the court. What is the D most likely to do next? Choose one of the following options: A. Nothing; it is too late as default judgment has been entered B. Apply to set aside default judgment: the court has discretion to set aside because the D has a real prospect of successfully defending the claim C. Apply to set aside default judgment: the court has discretion to set aside because there is some other good reason why the D should be allowed to defend D. Apply to set aside default judgment: the court must set aside because judgment was wrongly entered

D

Twelve months ago, a company sold some equipment to one of its directors for £125,000. At the time of the sale, the equipment had a market value of £200,000. Two months ago, the company went into insolvent liquidation. What is the most likely claim that the liquidator would bring against the director who received the equipment? A. A claim to set aside the transaction as a preference. B. A claim for wrongful trading. C. A claim to set aside the transaction as a transaction defrauding creditors. D. A claim to set aside the transaction as a transaction at an undervalue. E. A claim for fraudulent trading.

D

You are an apprentice solicitor in the property department at a law firm. Your supervisor has been advising Mr and Mrs Smith ('the Smiths') in relation to the purchase of a property. The property will be a new home for occupation by the Smiths which is to be secured by a first legal mortgage over it. The Smiths have obtained advice from a mortgage broker who is authorised by the Financial Conduct Authority ('FCA') and they have decided to take out a repayment mortgage with a high street bank (the 'Bank'). The Smiths have asked your supervisor to liaise with their mortgage broker to make arrangements for them to enter into the mortgage with the Bank. Your supervisor is due to receive £250 commission from the Bank for making these arrangements on the Smiths' behalf. Your firm is not directly authorised by the FCA to carry out any regulated activities under the Financial Services and Markets Act 2000 ('FSMA'). It does not advertise the carrying out of any regulated activities separately from the other professional services provided by the law firm and any regulated activities carried out form a small part of the overall work done by the law firm. Which ONE of the following statements BEST states the CORRECT position? A. Your supervisor can advise on the purchase of the property because property is not a specified investment. B. Your supervisor could not advise the Smiths in relation to the purchase of the property as he will be giving advice as to the merits of entering into the mortgage under Article 53 RAO. C. Your supervisor can advise on the purchase of the property because the Smiths are making their investment on the advice of their mortgage broker who is authorised by the FCA. D. Your supervisor could advise the Smiths in relation to the purchase of the property as long as he accounts to the client for the commission he is due to receive from the Bank. E. Your supervisor cannot advise on the purchase of the property because the purchase does not involve a regulated mortgage contract.

D

A claim for damages for professional negligence is settled on terms that the defendant surveyor must pay to the claimant damages of £60,000 together with the claimant's legal costs, to be assessed on the standard basis. In 2020 the claimant had entered into a written conditional fee agreement with her solicitor which provided for a success fee of 90%. The solicitor has calculated his professional charges at £20,000 before addition of the success fee and VAT. What sum may the solicitor charge the client for his professional fees, net of VAT? A. £15,000 B. £18,000 C. £30,000 D. £35,000 E. £38,000

E

A claim has been issued for non-payment of goods delivered by the claimant to the defendant on 8th February. The parties' written contract stipulates delivery on 1st February. The claimant's Finance Director made an oral variation to the contract for delivery to be on 8th February. The draft witness statement of the Managing Director (not the Finance Director) includes the paragraph: 'The Finance Director told me that she spoke to the defendant to change the date of delivery of the goods from 1st February to 8th February and the defendant agreed to the change'. Which of the following statements best describes how the claimant should deal with / improve upon this evidence? A. Remove the paragraph from the witness statement. B. Remove the paragraph from the witness statement, place it in a hearsay notice and serve the hearsay notice on the defendant. C. Retain the paragraph in the witness statement. D. Retain the paragraph in the witness statement and serve a notice that the claimant intends to rely on the evidence at trial. E. Retain the paragraph from the witness statement and obtain a witness statement from the Finance Director.

E

A claimant has commenced proceedings seeking in the region of £200,000 in relation to personal injuries. A defence has been filed defending the claim in full. It is clear that the claimant will be awarded at least £50,000 in relation to the injuries at trial, but the prospects of recovering more than this are unclear. The claimant needs to make adaptations to their house to cope with their injuries, but does not have the money to do so. Does an application for an interim payment by the claimant have good prospects of success? A. No, because the defendant has not admitted liability. B. No, because the prospects of recovering the majority of the claim are uncertain. C. Yes, because the claimant does not have any money to make the necessary adaptations. D. No, because the claimant has not obtained judgment against the defendant. E. Yes, because if the claim went to trial the claimant would obtain judgment for a substantial amount of money

E

A claimant is preparing for trial when the existence of a document that should have been disclosed to the defendant comes to light for the first time. At the time of disclosure, the claimant had carried out a reasonable search and properly carried out its disclosure obligations, but this document had not been revealed and therefore had not been disclosed. What should the claimant do? A. Tell the court about the document. B. Present the case to the court at trial using the document but making clear that it has not previously been disclosed. C. Present the case to the court at trial without referring to the document. D. Apply to the court for permission to disclose the document (late). E. Disclose the document to the defendant.

E

A client of your firm has been found guilty of theft following a trial in the Magistrates' Court. She wants to appeal her conviction, and the sentence of imprisonment which was imposed. Which one of the following statements is TRUE? A. The client can only appeal her conviction to the Crown Court. She has no right of appeal against the sentence. B. The client can appeal both her conviction and sentence to the Crown Court. However, if her appeal against conviction fails, she her appeal against automatically fails too. C. The client can appeal her conviction and sentence in the Court of Appeal. D. The client can appeal her conviction in the Crown Court, but can only appeal her sentence to the Court of Appeal. E. The client can appeal both her conviction and sentence to the Crown Court. If her appeal against conviction fails, she can still appeal the sentence passed by the Magistrates' Court.

E

A company has a Total Taxable Profit of £1,340,000 for the tax year ending 5 April 2021. Which of the following statements best describes how the company must pay its tax liability to HMRC? A. The company will calculate its tax liability and pay HMRC within 9 months of the end of the accounting period. B. The company will calculate its tax liability and pay HMRC in four instalments over the course of the next two accounting periods. C. The company will calculate its tax liability and pay HMRC in two instalments over the course of the next two accounting periods. D. The company will calculate its tax liability and immediately pay HMRC any tax which is due. E. The company will calculate its tax liability and pay HMRC within 9 months and one day of the end of the accounting period.

E

A company raises £200,000 through an issue of 100,000 £1 ordinary shares at a price of £2 per share fully paid in cash. Which of the following statements best describes the effect of the share issue on the company's balance sheet? A. Current assets and total equity increase by £450,000 B. Cash increases by £200,000 and share capital increases by £100,000 C. Net assets and total equity increase by £200,000 D. Current assets increase by £200,000; share capital increases by £100,000 and the share premium account increases by £100,000 E. Cash increases by £200,000; share capital increases by £100,000 and the share premium account increases by £100,000

E

A man instructs his solicitor to act for him in the purchase of the entire issued share capital of a private limited company from another company. The solicitor advises on the share purchase and helps to prepare and negotiate all the necessary documentation. Neither the solicitor nor his firm is authorised by the Financial Conduct Authority to carry on a 'regulated activity' as defined in the Financial Services and Markets Act 2000 and related secondary legislation. Has the solicitor breached the general prohibition against carrying on a regulated activity? A. Yes, because the solicitor has given advice on the purchase of shares in a specific company and no exclusion or exemption applies. B. Yes, because the transaction involves the purchase of the entire issued share capital of the company and no exclusion or exemption applies. C. No, because an exemption applies to professional firms which are supervised by the Solicitors Regulation Authority when they engage in corporate work. D. No, because an exclusion applies if the transaction relates to the purchase of any number of shares in a private limited company. E. No, because an exclusion applies if the transaction involves at least 50% of the voting shares in the company.

E

A person disposed of only one chargeable asset in the 2022/23 tax year, which was sold for £100,000. They bought the asset ten years ago for £45,000 with acquisition costs of £5,000. There was no subsequent expenditure before sale. The annual exemption for 2022/23 is £12,300. Sale costs were £2,700. The capital gains tax ('CGT') rate for basic rate taxpayers in 2022/23 is 10%, and for higher rate taxpayers it is 20%. The person's Taxable Income for 2022/23 was £50,000. How much capital gains tax will the person have to pay on the disposal of the asset? A. £3,500 B. £7,540 C. £15,750 D. £9,460 E. £7,000

E

A person has a taxable income of £200,000. They recently made a taxable chargeable gain of £270,000 on the sale of the shares of an engineering company which they founded 10 years ago. The person held the shares since the incorporation of the company and was a director for the whole of that period, retiring at the date of disposal of the shares. The shares represented a 10% shareholding in the company. The person has not previously made any chargeable gains. Will the person be able to claim any tax relief on this gain? A. No tax reliefs are available. Business Assets Disposal Relief will not apply since the person has now retired as a director of the company. B. No tax reliefs are available. Business Assets Disposal Relief will not apply since the person had only a 10% shareholding. C. Business Assets Disposal Relief will apply. The person will not pay any capital gains tax on the gain. D. Business Assets Disposal Relief will apply to reduce the income tax payable from 20% to 10% of the value of the gain. E. Business Assets Disposal Relief will apply to reduce the capital gains tax payable from 20% to 10% of the value of the gain.

E

A private company incorporated in 2016 with unamended Model Articles wishes to raise money for working capital purposes by borrowing from a bank. The bank will take security for the loan over the company's assets. No changes have been made to the company's articles since incorporation. Which of the following best describes the procedure to be followed to ensure the bank has effective security? A. The loan agreement will need to be registered at Companies House within 21 days beginning with the day after the date of signing of the loan agreement. B. The company will need to approve the granting of security in respect of the loan to the bank by shareholder resolution. C. The security document will need to be registered at Companies House within 21 days from the date of creation of the security. D. The company is unable to grant security for this loan as it would breach the financial assistance rules. E. The security document will need to be registered at Companies House within 21 days beginning with the day after the date of creation of the security.

E

A private limited company is planning to grant a service contract for a three-year term to one of its directors. The company was incorporated in 2010 and has adopted unamended model articles. The company is keen for this to be approved by the shareholders as quickly as possible and has already been advised that this will need to be approved by way of an ordinary resolution. All shareholders are understood to be generally available and responsive over the coming weeks. Which of the following statements best describes the appropriate method the company should use? A. The company should use the short notice procedure in calling the general meeting to ensure that all shareholders have an opportunity to participate in the voting. B. The company should use the short notice procedure in calling the general meeting as this should allow the process to be shortened significantly. C. The company should use the written resolution procedure to ensure that all shareholders have an opportunity to participate in the voting. D. The company should call a general meeting under the usual notice requirements to ensure that all shareholders have an opportunity to participate in the voting. E. The company should use the written resolution procedure as this should allow the process to be shortened significantly.

E

A private limited company went into insolvent administration last month, following the presentation of a creditor's petition. Twelve months ago, the company had repaid a sum of money loaned from one of its directors. Under the terms of the loan agreement, the loan was not due to be repaid until three months later. The company was insolvent on the cash flow test at the time of this transaction. Will the administrator be able to challenge the payment made by the company to its director? A. The administrator may challenge the transaction as a voidable transaction at an undervalue since it took place within the relevant time and there will be a presumption of insolvency due to the director being connected to the company. B. The administrator will not be able to challenge the transaction as a voidable preference unless it can be shown that the company was insolvent on the balance sheet test at the time of the transaction or became so as a result of the transaction. C. The administrator will not be able to challenge the transaction as a voidable preference since it took place over six months ago. D. The administrator will not be able to challenge the transaction as a voidable preference unless it can be shown that in making the repayment, the company had a desire to prefer the director. E. The administrator may challenge the transaction as a voidable preference since it took place within the relevant time and a desire to prefer will be presumed due to the director being connected to the company.

E

A private limited company, which was incorporated in January 2012, currently has an issued share capital of £1000 made up of 1000 £1 ordinary shares. The shares are held equally by four shareholders. The company now wishes to issue 150 £5 1% preference shares to a fifth shareholder. The preference shares entitle the shareholder to receive only a fixed dividend of £0.01 per share, with no right to share in any surplus profits. Further the shareholder is only entitled to the return of the nominal value of the shares on winding up of the company. The company has Model Articles with one amendment; this new preference share has already been included in the Articles. Which of the following statements represents the relevant shareholder resolution(s) required to be passed in order to make the proposed share allotment? A. The company will need to pass a special resolution to disapply pre-emption rights which attach to the shares. B. The company can allot the preference shares without obtaining any further authority from the shareholders. C. The company will need to pass an ordinary resolution to remove or increase the authorised share capital. D. The company will need to pass a special resolution to amend the articles of association of the company. E. The directors of the company will require an ordinary resolution to authorise them to allot the preference shares.

E

A software company wishes to defend proceedings brought by a customer in negligence. It filed an acknowledgment of service and then also agreed an extension of 21 days for filing and serving the defence. It needs a further 14 days in order to finalise the defence. What is the most appropriate next step for the software company to take? Select one alternative: A. File its defence when it has completed it and, if this is outside the time period required by the CPR, make an application to the court for relief from sanctions. B. File and serve the draft defence within the time period originally agreed (because it is not possible to obtain a further 14-day extension of time), and file and serve the final defence as soon as possible after that. C. File its defence within the time period originally agreed (because it is not possible to obtain a further 14-day extension of time) and apply to amend it later if necessary. D. Write to the building company seeking its approval to a further 14-day extension of time and then, assuming approval is given, notify the court of the extension. E. Make an application to the court for a further 14-day extension of time (and ask the claimant to consent to that application).

E

A steel worker has issued and served proceedings against their employer alleging negligence. The steel worker is claiming £65,000 in relation to personal injuries. The employer denies entirely that it was negligent. The dispute is finely balanced. The claim is at the case management stage. The claimant needs a different car to be able to maintain mobility in light of their injuries but cannot afford to change cars. The cost of making the change would be much less than £65,000. Does an application for an interim payment by the claimant have good prospects of success? Select one alternative: A. No, because although the necessary conditions for the court to order an interim payment are made out, the court is unlikely to exercise its discretion in favour of ordering this because the claim is too low in value. B. No, because although the necessary conditions for the court to order an interim payment are made out, the court is unlikely to exercise its discretion in favour of ordering this because the application has been made too late. C. Yes, because the necessary conditions for the court to order an interim payment are made out and therefore the claimant is entitled to an interim payment. D. Yes, because the necessary conditions for the court to order an interim payment are made out and the court is likely to exercise its discretion in favour of ordering this. E. No, because the necessary conditions for the court to order an interim payment are not made out.

E

A technology company has been working in a joint venture with a robotics company developing robots for use in hospitals. The two have developed a disagreement about the future of the joint venture. The robotics company is threatening to enter into a new joint venture with a private hospital, and to disclose confidential information about the robots with that hospital imminently. The technology company alleges that this would be a breach of the joint venture agreement and extremely harmful. It wishes to prevent this disclosure from taking place. It has a very strong claim. It is preparing court proceedings urgently. For what is it most appropriate for the technology company to apply, to prevent this disclosure? Select one alternative: A. A final prohibitory injunction. B. Summary judgment. C. An early (expedited) trial date. D. Permission to issue proceedings without complying with the practice direction on pre-action conduct. E. An interim prohibitory injunction.

E

A wealthy supermarket chain wants to obtain an interim injunction against a car dealer possessing the neighbouring land to prevent the car dealer from parking cars on what the supermarket considers to be its own land. The claim has a 60% chance of success. If the car dealer goes ahead with this parking, the supermarket will suffer losses of approximately £400 for each day of infringement, being the cost of the supermarket renting the required space from a different neighbouring property instead. The car dealer has substantial assets and available cash. Which of the following best explains why an application for an interim injunction is likely to fail? A. The defendant has sufficient assets to pay the costs of opposing the application. B. The supermarket will be unable to show the court that it will be able to honour the undertakings that are likely to be required of it. C. The claim does not have sufficient prospects of success. D. The parking complained of has not taken place yet. E. Damages will be an adequate remedy for the supermarket if the claim succeeds.

E

A witness of fact is called to give evidence in the trial of a claim brought by a claimant property development company against a defendant accountancy firm for losses arising out of alleged negligent advice that was given by the defendant. The witness was the Financial Director of the claimant company at the time the alleged negligent advice was given. The witness's statement includes the following sentence: 'At the time the advice was given, the financial assessment provided by the defendant did not accurately reflect the claimant's financial position'. Is this evidence likely to be admissible? A. The sentence is likely to be inadmissible privileged evidence. B. The sentence is likely to be admissible expert opinion evidence. C. The sentence is likely to be admissible 'perceived fact' evidence. D. The sentence is likely to be inadmissible opinion evidence. E. The sentence is likely to be admissible evidence of fact.

E

An applicant makes an application for security for costs with a return date of Friday 22 October. What is the latest date that the applicant might be permitted to serve a copy of the application notice and supporting documentation on the respondent (without further order from the court)? A. Friday, 15 October B. As soon as possible before the hearing C. Thursday, 21 October D. Tuesday, 19 October E. Monday, 18 October.

E

Client A and Client B want to set up an office solutions business. Their main concern is the ability to raise finance quickly and easily. Client A would prefer not to disclose how much profit the business is making. Client B has just bought a new home and wants to ensure they have limited liability as they do not want to lose their assets if the business fails. Which business structure is most suitable for client A and client B? Select one alternative: A. Sole trader B. Traditional partnership C. Limited liability partnership D. Public limited company E. Private limited company

E

For a summary judgment application, what is the latest date by which the applicant must serve the application documentation on the respondent if the hearing is to take place on Friday 22 October? A. Friday 15 October B. Friday 8 October C. Thursday 14 October D. Monday 18 October E. Thursday 7 October

E

In finding for the defendant in a breach of contract claim the judge says the following in their judgment: 'The claimant must accept responsibility for the slogan it used when marketing the goods, ''Better than anything else you can buy - guaranteed''. This was not an invitation to treat or a 'mere puff' but, in my judgment, became a contractual term.' What is the most appropriate ground for appeal for the unsuccessful claimant? A. The judge's decision was unjust. B. The judge's decision was unjust due to an 'other' procedural irregularity. C. The judge's decision was unjust due to a serious procedural irregularity. D. The judge's decision was wrong because they erred in fact. E. The judge's decision was wrong because they erred in law.

E

The claimant is considering enforcement of a judgment of £30,000 against a defendant which is a limited company. The defendant operates its business from rented offices. The defendant has a fleet of vans (not subject to finance) as well as £6,000 in the bank, and approximately 12 employees. The defendant's customers owe it in excess of £45,000 (made up of around 60 customers that each owe between £500 and £1,000). Which of the following do you consider to be the most suitable method of enforcement to use first in these circumstances? A. Charging Order B. Attachment of Earnings Order C. Third Party Debt Order D. Present a bankruptcy petition. E. Taking Control of Goods Order

E

The managing director of a software company is providing evidence in support of an interim application for a search order. In what manner will that evidence need to be 'signed off'? A. With a statement of truth by the company. B. With a statement of truth on the part of the managing director personally. C. With a jurat by the managing director on behalf of the company, sworn before someone who is authorised to administer affidavits. D. With a statement of truth by the managing director on behalf of the company. E. With a jurat on the part of the managing director personally, sworn before someone who is authorised to administer affidavits.

E

The parties in a breach of contract claim have both just received the final report from the single joint expert instructed to advise on the extent of losses suffered by the claimant as a result of the defendant's breach. The claimant is unhappy with the expert's conclusions and considers the approach taken to calculating those losses to be unclear and potentially incorrect. Which of the following best describes what the claimant should do next to challenge the expert and the content of the report? A. The claimant should wait until the final hearing of the dispute when it will be able to cross-examine the expert and challenge the approach taken to the calculation of loss. B. The claimant should immediately instruct its own expert to advise on loss to allow for enough time for that evidence to be adduced at final hearing. C. The claimant should make an application to court asking that the expert's report be struck out with immediate effect. D. The claimant should make an application that the instructions to the expert are disclosed so that it can ensure that they contain nothing inaccurate and are not incomplete. E. The claimant should put written questions to the expert asking for clarification about the approach taken to the calculation of loss.

E

The shareholders of a company are dissatisfied with the performance of one of the directors of the company and wish for the director to be removed. The board of directors as a whole is loyal to the underperforming director and is unlikely to take any action to remove them. The company has unamended Model Articles. What notices and/or requests should the shareholders immediately send to the board in order to ensure that the director is removed as quickly as possible? A. A special notice of the proposed resolution for removal. B. A special notice of the proposed resolution for removal and a request for the directors to circulate a written resolution. C. A request requiring the directors to call a general meeting. D. A request for the directors to circulate a written resolution to the board. E. A special notice of the proposed resolution for removal and a request requiring the directors to call a general meeting.

E

Two individuals (A and B) want to incorporate a private limited company as soon as possible. A and B propose to each take 50% of the shares and become directors of the company. A is negotiating a supply agreement, on behalf of the not yet incorporated company with a company (C) to take effect once the company is incorporated. If A were to sign the agreement with C now, before the company is incorporated, who would be liable under the agreement? A. A and B B. A, B and the not yet incorporated company C. Nobody, the contract would be void D. The not yet incorporated company, once it is incorporated. E. A

E

Two individuals (Partner A and Partner B) began trading together as a partnership five years ago. Two years ago a third partner, (Partner C) joined the partnership. Partner A put in 75% of the start up capital and partner B put in the remaining 25%. Partner C has never contributed any capital but the partnership uses a warehouse owned by Partner C. The partners have never entered into any formal agreement. Which of the following statements represents the correct position with regards to the rights to the profits of the partnership and a salary for each partner under the default provisions of the Partnership Act 1890? A. The three partners are entitled to a share of the profits equal to the percentage of their original capital investment and no salary. B. Partner A and Partner B are entitled to an equal share of the profits, but Partner C is not entitled to any profits. None of the partners are entitled to a salary. C. Partner A and Partner B are entitled to an equal share of the profits, but Partner C is not entitled to any profits. All three partners are entitled to an equal salary. D. The three partners are entitled to an equal share of the profits and a salary in equal proportions to their original capital investment. E. The three partners are entitled to an equal share of the profits but none of the Partners are entitled to a salary.

E

Two individuals want to start a business together and are keen to limit their liability. They are both going to be active in the running of the business. They do not want to spend a lot of money in the set up of the business, but they need the ability to raise some finance in the future in the business name. Which of the following would be the best vehicle for their business? A. A partnership B. A sole trader C. A limited liability partnership D. A public limited company E. A private limited company

E

You act for a partnership which is made up of 8 partners. There is no written partnership agreement. Profits have always been shared equally between the partners. Three years ago, the partners all agreed to take out a loan to renovate their main office. The partners all contributed equally to repaying the loan. Unfortunately, the partnership has not been profitable, and they have recently defaulted on the loan repayments. One of the partners is about to retire. No documentation has been drafted to confirm the details of her retirement. Can the partner who is about to retire be liable for repaying any of the loan? A. No, because the partners have not entered into a written partnership agreement which deals with liability on retirement therefore once the partner retires, she is no longer a partner and therefore has no liability for any debts of the partnership. B. No, because there is no written partnership agreement therefore under the default provisions of the Partnership Act 1890, only the current partners will be jointly and severally liable for debts of the partnership. C. No, because there is no written partnership agreement therefore under the default provisions of the Partnership Act 1890, only the current partners will be jointly liable for debts of the partnership. D. Yes, because there is no written partnership agreement therefore under the default provisions of the Partnership Act 1890, all those persons who were partners at the time that the loan agreement was entered into will be be jointly and severally liable for repaying the loan regardless of retirement. E. Yes, because there is no written partnership agreement therefore under the default provisions of the Partnership Act 1890, all those persons who were partners at the time that the loan agreement was entered into will be jointly liable for repaying the loan regardless of retirement.

E

You act on behalf of an individual shareholder with a minority shareholding (10% of the company's shareholding). The client has recently been unwillingly removed as a director of the company and dismissed as an employee of the company. Your client has been a shareholder in the company for 3 years (since the company was incorporated). The other 3 shareholders in the company are also the only directors in the company. The company is a small private company limited by shares (with unamended Model Articles). Which of the following actions is both available to your client and most likely to be successful based on the information available? A. Your client should pursue a derivative action on behalf of the company. The remaining directors of the company are likely to have breached their directors' duties by deciding to dismiss your client as an employee. B. Your client should bring a claim under s 33 Companies Act 2006 for breach of their membership rights. The most likely remedy is damages. C. Unfortunately there is no action that your client can take in these circumstances. D. Your client should bring a petition for the just and equitable winding up of the company. E. Your client should pursue an unfair prejudice claim. The company is likely to qualify as a quasi-partnership. If successful, it is likely that the court would order the purchase of your client's shares by the other shareholders or by the company.

E

You are a solicitor in the corporate department of Price Prior. Your client Ruth wishes to buy 50% of the shares in a company set up by her sister, Patricia, as an investment. Ruth will be buying the shares from Patricia and has instructed you to advise her on the acquisition (including on the merits). Price Prior is not directly authorised by the Financial Conduct Authority ('FCA') to carry out any regulated activities. It does not hold itself out as carrying out regulated activities separate to other professional services it provides and only a small proportion of its work comprises regulated activities. However, some of the solicitors in the firm occasionally carry out exempt regulated activities. Which ONE of the following statements is CORRECT? A. You will not need to be authorised by the FCA to act for Ruth because your advice will be incidental to the provisions of professional services by Price Prior. B. You will need to be authorised by the FCA to act for Ruth on the acquisition. C. You will not need to be authorised by the FCA to act for Ruth because acting for a client who is acquiring shares in a company is not a specified activity. D. You will not need to be authorised by the FCA to act for Ruth because companies are not specified investments under the RAO. E. You will not need to be authorised by the FCA to act for Ruth because Ruth will be buying 50% or more of the shares in the company.

E

You are instructed by the claimant company, a supplier of goods to nightclubs, which has brought proceedings to recover the sum of £45,000 from a nightclub operator. The claimant has reviewed the nightclub operator's annual accounts which show that the nightclub operator has sustained a loss in each of the last three trading years and has almost no assets. The nightclub operator is defending the claim and the claimant is concerned that the nightclub operator will be unable to pay the claimant's costs if ordered to do so. What is the best advice to give to the claimant in relation to trying to improve its position in relation to costs recovery? Select one alternative: A. The claimant should apply for security for costs because this will stop the defendant from dissipating any remaining assets. B. The claimant should apply for security for costs because this will bring the proceedings to a quicker conclusion. C. The claimant should not apply for security for costs because the nightclub operator's annual accounts are not relevant in assessing the nightclub operator's financial position. D. The claimant should apply for security for costs because this will provide a sum of money (or other security) which will later be available to satisfy a costs order. E. The claimant should not apply for security for costs because there is no basis for such an application.

E

You are instructed on behalf of the claimant in a breach of contract claim which is legally and factually very complicated. The claim is worth approximately £150,000 and, amongst other issues, the court will be invited to interpret a particular term of the contract in order to decide the case. This particular term is a common term within the context of contracts of this nature and the outcome of the case will have important implications for a large number of other businesses which use contracts with the same term. What is the best advice to give the claimant in relation to where to start proceedings? A. The claimant must issue this claim in the County Court. B. The claimant must issue this claim in the High Court. C. The claimant must issue this claim in the Magistrate's Court. D. The claimant could issue the claim in the High Court or County Court, but the County Court is more appropriate. E. The claimant could issue the claim in the High Court or County Court, but the High Court is more appropriate.

E

You have a corporate client which sold some land in September 2019 for £175,000, making a chargeable gain of £25,000. In November 2018, it bought some machinery for £60,000. In October 2021, the client buys new premises for £250,000. Which statement below represents the best advice to the client regarding the applicability of tax reliefs? A. The client can deduct the chargeable gain of £25,000 against the price of the premises to give a new base cost for the premises of £225,000 or against the price of the machinery to give a new base cost for the machinery of £35,000. B. The client can deduct the chargeable gain of £25,000 against either the cost of the machinery or the premises which will help it to reduce the amount of corporation tax it has to pay. C. The client can add the chargeable gain of £25,000 onto the purchase price of the premises to reduce any chargeable gain arising from a future sale of the premises. D. The client cannot deduct the chargeable gain of £25,000 against the price of the premises as the premises was not purchased within 12 months before the sale of the land. E. The client can deduct the chargeable gain of £25,000 from the price of the premises only to give a new base cost for the premises of £225,000

E

You represent a Claimant company which is bringing an action alleging negligence against its former surveyors. An offer is made pursuant to Part 36 by the surveyors' solicitor in an attempt to settle the action before the issue of proceedings. Which one of the following is the best advice to the claimant should it wish to accept the offer? A. Provided that the claimant accepts the offer within the relevant period, it will be entitled to damages and all of its costs up to the expiry of the relevant period. B. The claimant can accept the offer by serving a written notice of acceptance and a copy of the notice must be filed at court. C. The claimant must accept the offer within the relevant period or else the offer will automatically be withdrawn at the end of that relevant period. D. The claimant may accept the offer within the relevant period, but unless court proceedings are issued in the interim period, Part 36 will not apply. E. The claimant may accept the offer within the relevant period and obtain damages and costs to the date the notice of acceptance is served.

E

Your client is a producer of high-quality furniture. One of its long-standing suppliers provided it with sub-standard leather to cover its sofas. This resulted in the recall of the sofas and significant losses for your client. Your client has recently commenced court proceedings against the supplier to recover these losses. The supplier has proposed that the parties try to resolve the dispute by mediation and your client asks for your advice. Your client is not yet concerned about the increasing costs of the litigation as it has put aside a small fund to pay for it. The client believes it has a strong case so that any legally correct solution would be decided in its favour. It would like to continue to work with the supplier in future. Which of the following is most accurately describes the greatest benefit of mediation to your client? A. Mediation will shorten the time spent on the dispute because the mediator can make a decision which will bring the dispute to a conclusion. B. Mediation is more likely to provide a commercial resolution. C. Mediation is confidential. D. Mediation will save your client costs. E. Mediation is a less adversarial process than court proceedings so it will enable the parties to maintain their commercial relationship in future.

E

Your client is in the process of setting up an online recruitment business. In the future, it is hoped that staff will be employed to undertake a variety of tasks within the business, but for now, all work is carried out by your client who has secured investment from a family member. It has been agreed verbally that the family member will not be entitled salary and will not have any involvement in the day-to-day running of the business. Your client intends to take a salary from the business, but he has not discussed this with the family investor. You have advised your client on the choice of business medium for this venture and your client has decided that a partnership would be the best option. Your client is keen to keep legal work and formality to a minimum at this stage and has asked you to explain the implications of continuing without a partnership agreement until the business has a regular turnover. Which of the following statements best describes the impact of your client accepting the investment and continuing without a partnership agreement? A. Both partners would be entitled to equal salaries, equal shares in the profits of the partnership and decisions would require the consent of both partners. B. Neither partner would be entitled to any salary, your client would be entitled to all of the profits of the partnership and decisions would be made by your client alone. C. Neither partner would be entitled to any salary, both partners would be entitled to equal shares in the profits of the partnership and decisions would require the consent of both partners. D. Both partners would be entitled to equal salaries and equal shares in the profits of the partnership, but decisions would be made by your client alone. E. Neither partner would be entitled to any salary, both partners would be entitled to equal shares in the profits of the partnership and decisions would be made by your client alone.

E

Your client wishes to commence proceedings for breach of contract against a supplier for defective goods. The amount of the claim is £108,000 (inclusive of £18,000 VAT). The claim is not complex. In which court can your client issue proceedings? A. Your client must issue proceedings in the County Court given that the principal amount is £90,000. B. Your client must issue proceedings in the High Court. C. If your client commences proceedings in the County Court it is likely that the court will transfer it to the High Court. D. Because the case will be allocated to the multi-track, your client ought to commence proceedings in the High Court. E. Your client has a choice as to whether to issue proceedings in the County Court or the High Court.

E

Your client, a supermarket, is about to enter into a contract with a new supplier of almonds and other nuts based in the USA. The supplier has proposed including an arbitration clause in the contract to resolve any disputes that may arise in future. The arbitration will have its legal seat in England. Your client is more familiar with litigation in the English courts and has generally been happy for its previous contractual disputes to be adjudicated with legal expertise to provide correct legal solutions. It has asked for your advice on arbitration. Which one of the following potential benefits of arbitration is likely to be most attractive to your client in its dealings with this supplier? A. The arbitrator can be experienced in the area of food supply. B. Arbitration is likely to be cheaper for your client than litigation in the English courts. C. Arbitration allows your client to have some input into the process D. Arbitration is likely to enable a legally correct solution to be achieved. E. Arbitration allows for easier international enforcement than litigation in the English courts

E