Practice answer bank 373
Answer 31
B A company's constitution contractually binds the company and members in their capacity as
members.
Syllabus area D4(e)
Answer 32
(a) A 'passing-off action', is a common law action which applies when one company believes that
another's conduct (here the use of a company name) is causing confusion in the minds of the
public over the goods which each company sells.
(b) In order to be successful, Lancashire Hair Brushes plc will need to satisfy the court that confusion
has arisen because of National Hair Brushes use of its registered name and it lays claim to
something exclusive and distinctive and not something in general use.
(c) Lancashire Hair Brushes plc could object to the Company Names Adjudicator that the name
National Hair Brushes is too like its own name and is causing confusion. They would be appealing
for the Adjudicator to exercise their power under the Companies Act to compel a change of name.
Answer 33
B A rights issue is an offer to existing shareholders to buy further shares in the company. A bonus
issue is the allotment of additional shares to shareholders in proportion to their holdings.
Syllabus area E1(c)
Answer 34
C Called-up share capital is the amount the company has required shareholders to pay on existing
shares. A company's issued share capital is the type, class, number and amount of shares issued
to shareholders. The amount existing shareholders have paid on existing shares is the paid-up
share capital.
Syllabus area E1(a)
Answer 35
C Active intervention by the charge, such as appointing a receiver will cause the charge to crystallise.
The other options will not cause the charge to crystallise.
Syllabus area E2(d)
Answer 36
A Out of the options, only debenture stock must be created using a debenture trust deed. Single and
series debentures may use a debenture trust deed but this is not compulsory.
Syllabus area E2(b)
Answer 37
A Scrip dividends are paid by issuing additional shares.
Syllabus area E3(b)