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Free ACCA Corporate and Business Law – England (LW-ENG) Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the ACCA Corporate and Business Law – England (LW-ENG) practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A company seeks a remedy for unpaid invoices through the civil courts. What is the usual purpose of the remedy?

    1. A.To punish the debtor for an offence against the state
    2. B.To impose a criminal sentence for breaching the agreement
    3. C.To compensate the claimant or enforce its private rightsCorrect answer: C
    4. D.To decide whether the debtor should face criminal charges

    Explanation: The source states: "Civil judges do have the power to punish parties if, for example, they are in contempt of court but, generally, Civil cases do not involve the imposition of any punishment." Ordinary civil debt enforcement concerns private rights and remedies. Criminal punishment, sentencing and prosecution decisions answer different legal questions.

    Reference: Judiciary — Civil Justice — Judgment

  2. 2Which feature makes an agreement a contract rather than merely an informal understanding?

    1. A.Its promises concern a transaction with a high monetary value
    2. B.Its terms are recorded by an independent witness at a meeting
    3. C.It is an agreement that the law recognises as legally bindingCorrect answer: C
    4. D.It describes an arrangement intended to continue for several years

    Explanation: The source states: "A contract is a legally binding agreement formed by the mutual consent of the parties." Legal enforceability distinguishes a contract. Value, witnessing and duration do not themselves establish that quality.

    Reference: ACCA — Contract and the Tort of Negligence — Contract — the relationship between the parties

  3. 3A contract calls a person self-employed, but the actual arrangements indicate an employment relationship. What determines status for employment rights?

    1. A.The contractual label alone
    2. B.The individual's preferred tax treatment
    3. C.The reality of the working relationshipCorrect answer: C
    4. D.The method used to submit invoices

    Explanation: The source states: "The absence of a written contract or the fact that a contract between the 2 may specify a particular status is not conclusive if that does not correspond to what happens in reality." The label and administrative arrangements do not override the real relationship; the whole factual assessment determines status.

    Reference: GOV.UK Employment status and employment rights guidance — Section 3: Key factors in determining employment status

  4. 4Three partners in an ordinary English partnership have agreed nothing about sharing profits. One supplied half the capital, and the others supplied a quarter each. How are profits shared under the statutory default rules?

    1. A.In proportion to their capital contributions
    2. B.Equally between all three partnersCorrect answer: B
    3. C.In proportion to their hours of work
    4. D.Entirely by the partner who supplied most capital

    Explanation: The source states: "All the partners are entitled to share equally in the capital and profits of the business" Absent an express or implied agreement changing the default, each receives one third. Capital percentages, hours and largest contribution do not replace the equal-sharing rule.

    Reference: Partnership Act 1890 — s. 24(1)

  5. 5What does the nominal value of a company's issued shares represent, rather than their current market value?

    1. A.The price at which every shareholder must sell their shares
    2. B.The company's current net asset value per share
    3. C.The designated capital amount attached to those sharesCorrect answer: C
    4. D.The dividend that the company guarantees to pay each year

    Explanation: The source states: "This designated amount, set out at the initial registration of the company, establishes the nominal value of the shares in the company." Nominal value is the designated capital denomination. The same explanation distinguishes it from a market price that may diverge. It is not a guaranteed resale price, dividend or valuation of net assets.

    Reference: ACCA F4 England Published Answers June 2011 — Answer 5, p. 10

  6. 6A person is never formally appointed but actually occupies and performs the position of a company director. What is the relevance of section 250 of the Companies Act 2006?

    1. A.Only registration at Companies House can bring someone within the meaning of director
    2. B.The person is necessarily an employee and cannot owe director duties
    3. C.The statutory meaning includes a person occupying the director position regardless of titleCorrect answer: C
    4. D.A different job title automatically removes the person from company law

    Explanation: The source states: "“director” includes any person occupying the position of director, by whatever name called." The functional position matters; a person acting as a de facto director cannot avoid the statutory concept merely through lack of formal appointment or a different title.

    Reference: Companies Act 2006 — s. 250

  7. 7For a members' voluntary liquidation, the directors' declaration states when the company can pay its debts in full with interest. What is the maximum period from the start of liquidation that can be stated?

    1. A.Three months
    2. B.Six months
    3. C.Twelve monthsCorrect answer: C
    4. D.Twenty-four months

    Explanation: The source states: "how long it will take the company to pay its debts - this must be no longer than 12 months from when the company’s liquidated" The upper limit is twelve months. Three or six months may be shorter permissible estimates but are not the maximum asked for; twenty-four months exceeds the limit.

    Reference: GOV.UK Liquidate a company you do not want to run anymore — Make a declaration of solvency

  8. 8Which information most clearly satisfies the Criminal Justice Act 1993 definition of inside information?

    1. A.A vague rumour that the entire economy may grow next year
    2. B.A company's annual results already released to the public
    3. C.A published forecast available to every investor on equal terms
    4. D.Precise unpublished results about a named issuer likely to affect its share price significantlyCorrect answer: D

    Explanation: The source states: "is specific or precise; (c) has not been made public; and (d) if it were made public would be likely to have a significant effect on the price of any securities." The information relates to a particular issuer, is precise, non-public and likely to have a significant price effect. Public results or forecasts lack the non-public condition; a vague general economic rumour lacks the required specificity and issuer connection.

    Reference: Criminal Justice Act 1993 — s. 56(1)(a)–(d)

  9. 9In England and Wales, where will an ordinary civil debt claim usually begin?

    1. A.The County CourtCorrect answer: A
    2. B.The Crown Court
    3. C.The Court of Appeal
    4. D.The UK Supreme Court

    Explanation: The source states: "Civil cases will usually start in the County Court." The County Court is the usual starting court. The Crown Court principally handles serious criminal matters, while the two appellate courts do not ordinarily start a civil debt claim.

    Reference: Judiciary — Structure of the Courts and Tribunals System — Different types of case

  10. 10Two sole traders agree orally to a routine sale of goods. All substantive contract requirements are met, and no special statutory formality applies. What is the effect of the absence of writing?

    1. A.It does not by itself prevent a binding contract of saleCorrect answer: A
    2. B.It means the agreement must first be executed as a deed
    3. C.It postpones the contract until the goods have been paid for
    4. D.It prevents the agreement from imposing contractual obligations

    Explanation: The source states: "a contract of sale may be made in writing (either with or without seal), or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties." Section 4 permits oral formation, subject to applicable statutory exceptions, excluded here. A deed, advance payment and universal writing requirement are not imposed.

    Reference: Sale of Goods Act 1979 — s. 4(1)

Exam Review

About ACCA Corporate and Business Law – England (LW-ENG)

ACCA Corporate and Business Law – England (LW-ENG) · GB

Key exam facts

Provider
ACCA is the examination and syllabus owner. Licensed computer-based examination centres deliver on-demand sittings and take bookings and payment directly.
Format
On-demand computer-based examination: Section A has 20 one-mark and 25 two-mark objective test questions; Section B has five six-mark multi-task analysis/application questions. All questions are compulsory. One-mark OTs have three options; two-mark OTs have four.
Exam questions
Total questions: 50.
Time limit
Two hours of examination time; booking/check-in administration is separate.
Passing score
50% (50 marks out of 100).
Exam fee
For a UK centre-based on-demand sitting, the CBE centre sets and collects its own exam fee. Contact the chosen centre for its current GBP quote and resit price; there is no single centre-independent LW-ENG price. The published Applied Skills session-entry prices apply to session-based local law variants, not this on-demand ENG examination.

Topics covered

  • Essential elements of the legal system

    • Law and the legal system
    • Define law and distinguish types of law. [1]
    • Explain the structure and operation of the courts. [1]
    • Sources of law
    • Explain what is meant by case law and precedent. [1]
    • Explain legislation and evaluate delegated legislation. [1]
    • Illustrate the rules and presumptions used by the courts in interpreting statutes. [1]
    • Identify the concept and impact of human rights law. [1]

  • The law of obligations

    • Formation of contract
    • Analyse the nature of a simple contract. [2]
    • Explain the meaning of an offer and distinguish it from an invitation to treat. [2]
    • Explain the termination of an offer. [2]
    • Explain the meaning and consequence of acceptance. [2]
    • Explain the need for consideration. [2]
    • Explain adequacy and sufficiency of consideration. [2]
    • Analyse the doctrine of privity. [2]
    • Distinguish the presumptions relating to intention to create legal relations. [2]
    • Content of contracts
    • Distinguish terms from mere representations. [1]
    • Define the various contractual terms. [1]
    • Explain the control over terms in consumer contracts and the operation of exclusion clauses in non-consumer contracts. [2]
    • Breach of contract and remedies
    • Explain the ways in which a contract may be discharged. [2]
    • Explain the meaning and effect of breach of contract, and the remedies available in common law. [2]
    • Explain the rules relating to the award of damages. [2]
    • Analyse the equitable remedies for breach of contract. [2]
    • The law of torts and professional negligence
    • Explain the meaning of tort. [2]
    • Explain the tort of ‘passing off’. [2]
    • Explain the tort of negligence including the duty of care and its breach, and the concept of vicarious liability. [2]
    • Explain the meaning of causality and remoteness of damage. [2]
    • Discuss defences to actions in negligence. [2]
    • Explain and analyse the duty of care of accountants and auditors. [2]

  • Employment law

    • Contract of employment
    • Distinguish between employees and the self-employed. [2]
    • Explain the nature of the contract of employment and common law and statutory duties placed on the employer and employee. [2]
    • Dismissal and redundancy
    • Explain termination of employment by notice. [2]
    • Distinguish between summary and constructive dismissal. [2]
    • Explain wrongful dismissal. [2]
    • Explain unfair dismissal, including the procedure, and fair and unfair reasons for dismissal. [2]
    • Discuss the remedies available to those who have been subject to unfair dismissal. [2]
    • Explain what is meant by redundancy and the operation of the rules relating to it. [2]

  • The formation and constitution of business organisations

    • Agency law
    • Define the role of the agent and give examples of such relationships paying particular regard to partners and company directors. [2]
    • Explain the formation of the agency relationship. [2]
    • Define the authority of the agent. [2]
    • Explain the potential liability of both the principal and the agent. [2]
    • Partnerships
    • Demonstrate a knowledge of the legislation governing the partnership, both unlimited and limited. [1]
    • Discuss the formation of a partnership. [2]
    • Explain the authority of partners in relation to partnership activity. [2]
    • Analyse the liability of various partners for partnership debts. [2]
    • Explain the termination of a partnership, and partners’ subsequent rights and liabilities. [2]
    • Corporations and legal personality
    • Distinguish between sole traders, partnerships and companies. [1]
    • Explain the meaning and effect of limited liability. [1]
    • Analyse different types of companies, especially private and public companies. [1]
    • Illustrate the effect of separate personality and the veil of incorporation. [1]
    • Recognise instances where separate personality will be ignored (lifting the veil of incorporation. [1]
    • The formation and constitution of a company
    • Explain the role and duties of company promoters, and the breach of those duties and remedies available to the company. [2}
    • Explain the meaning of, and the rules relating to, pre-incorporation contracts. [2]
    • Describe the procedure for registering companies, both public and private, including the system of streamlined company registration. [1]
    • Describe the statutory books, records and returns, including the confirmation statement and the register of people with significant control, that companies must keep or make. [1]
    • Analyse the effect of a company’s constitutional documents. [2]
    • Describe the contents of model articles of association. [1]
    • Explain how articles of association can be changed. [2]
    • Explain the controls over the names that companies may or may not use. [2]

  • Capital and the financing of companies

    • Share capital
    • Examine the different types of capital. [2]
    • Illustrate the difference between various classes of shares, including treasury shares, and the procedure for altering class rights. [2]
    • Explain allotment of shares, and distinguish between rights issue and bonus issue of shares. [2]
    • Examine the effect of issuing shares at either a discount, or at a premium. [2]
    • Loan capital
    • Define companies’ borrowing powers. [1]
    • Explain the meaning of loan capital and debenture. [2]
    • Distinguish loan capital from share capital, and explain the different rights held by shareholders and debenture holders. [2]
    • Explain the concept of a company charge and distinguish between fixed and floating charges. [2]
    • Describe the need, and the procedure, for registering company charges. [2]
    • Capital maintenance and dividend law
    • Explain the doctrine of capital maintenance and capital reduction. [2]
    • Explain the rules governing the distribution of dividends in both private and public companies. [2]

  • Management, administration and the regulation of companies

    • Company directors
    • Explain the role of directors in the operation of a company, and the different types of directors, such as executive/ non- executive directors or de jure and de facto directors, and shadow directors. [2]
    • Discuss the ways in which directors are appointed, can lose their office and the disqualification of directors. [2]
    • Distinguish between the powers of the board of directors, the managing director/chief executive and individual directors to bind their company. [2]
    • Explain the duties that directors owe to their companies, and the controls imposed by statute over dealings between directors and their companies, including loans. [2]
    • Other company officers
    • Discuss the appointment procedure relating to, and the duties and powers of, a company secretary. [2]
    • Discuss the appointment procedure relating to, and the duties and rights of a company auditor, and their subsequent removal or resignation. [2]
    • Company meetings and resolutions
    • Distinguish between types of meetings: general meetings and annual general meetings. [1]
    • Distinguish between types of resolutions: ordinary, special, and written. [2]
    • Explain the procedure for calling and conducting company meetings. [2]

  • Insolvency law

    • Insolvency and administration
    • Explain the meaning of, and procedure involved in, voluntary liquidation, including members’ and creditors’ voluntary liquidation. [2]
    • Explain the meaning of, the grounds for, and the procedure involved in, compulsory liquidation. [2]
    • Explain the order in which company debts will be paid off on liquidation. [2]
    • Explain administration as a general alternative to liquidation. [2]
    • Explain the way in which of an administrator may be appointed, the effects of such appointment, and the powers and duties an administrator. [2]

  • Corporate fraudulent and criminal behaviour

    • Fraudulent and criminal behaviour
    • Recognise the nature and legal control over insider dealing. [2]
    • Recognise the nature and legal control over market abuse. [2]
    • Recognise the nature and legal control over money laundering including the following policies, procedures and controls: [2] i) risk management practices: ii) internal controls: iii) customer due diligence: iv) reliance and record keeping; v) the monitoring and management of compliance with, and the internal communication of, such policies, controls and procedures.
    • Recognise the nature and legal control over bribery. [2]
    • Discuss potential criminal activity in the operation, management and liquidation of companies, including the failure to prevent the facilitation of tax evasion and the meaning of relevant body, and the failure to prevent fraud. [2]
    • Recognise the nature and legal control over fraudulent and wrongful trading. [2]

How to prepare

Work through the topics, read the explanation after each answer, and revisit the areas where you miss questions. Use the official outline and reference materials below to guide your study.

These independent practice questions are not actual exam items and do not guarantee a passing result.

Frequently asked questions

What is the exam format?

On-demand computer-based examination: Section A has 20 one-mark and 25 two-mark objective test questions; Section B has five six-mark multi-task analysis/application questions. All questions are compulsory. One-mark OTs have three options; two-mark OTs have four.

How many questions are on the exam?

Total questions: 50.

How long is the exam?

Two hours of examination time; booking/check-in administration is separate.

What is the passing score?

50% (50 marks out of 100).

How much does the exam cost?

For a UK centre-based on-demand sitting, the CBE centre sets and collects its own exam fee. Contact the chosen centre for its current GBP quote and resit price; there is no single centre-independent LW-ENG price. The published Applied Skills session-entry prices apply to session-based local law variants, not this on-demand ENG examination.

Official sources and references

Confirm current exam arrangements with the exam provider.