2 of 100 marks
AIBE 22: Company Law
This subject carries 2 marks of the 100-mark paper — one of the lighter subjects, but still free marks if you tab it properly. Section 45 has 8 questions on it, four times the official count.
What to carry, and where to tab
Bring the Companies Act 2013, unmarked. Blank index tabs only — anything written on a tab can get the book confiscated. These are the parts this subject actually draws from:
- Companies Act 2013
- Companies Act 2013, Chapter II
- Companies Act 2013, Chapter IX
- Companies Act 2013, Chapter VII
- Companies Act 2013, Chapter XVI
- IBC 2016, Part II
Provisions that recur
- § 3 Companies Act 2013
- § 9 Companies Act 2013
- Companies Act 2013
- § 4 Companies Act 2013
- § 135 Companies Act 2013
- § 241, § 242 Companies Act 2013
- § 96 Companies Act 2013
- § 7, § 9, § 10 IBC 2016
Sample questions
Three of the 8, with full explanations. The first ten are free in the app.
A One Person Company under the Companies Act, 2013 must have a minimum of:
- Three directors
- Two members
- One member and one director
- Seven members
Answer & explanation
One member and one director
Section 3(1)(c) permits a single-member company. A private company requires a minimum of two members and two directors; a public company requires seven members and three directors.
The principle of separate legal personality of a company was established in:
- Salomon v. Salomon & Co. Ltd. (1897)
- Foss v. Harbottle (1843)
- Royal British Bank v. Turquand (1856)
- Ashbury Railway Carriage v. Riche (1875)
Answer & explanation
Salomon v. Salomon & Co. Ltd. (1897)
A company is a legal person distinct from its members. The corporate veil may be lifted in cases of fraud, evasion of law, or where the company is a mere sham or agent.
The doctrine of indoor management, protecting outsiders dealing with a company, derives from:
- Foss v. Harbottle (1843)
- Royal British Bank v. Turquand (1856)
- Salomon v. Salomon (1897)
- Derry v. Peek (1889)
Answer & explanation
Royal British Bank v. Turquand (1856)
An outsider is entitled to assume that the internal procedures of the company have been complied with. The exceptions include knowledge of the irregularity, suspicion of irregularity and forgery.
Practise
Ten questions in Company Law free, no card. Each answer cited to both codes with a line telling you where to look in the bare act.
Practise Company Law