ACCA f4 BPP revision kit 2010

PAPER F4 CORPORATE AND BUSINESS LAW (ENGLISH) In this January 2010 edition x We discuss the best strategies for revising and taking your ACCA exams x We show you how to be well prepared for your exam x We give you lots of great guidance on tackling questions x We show you how you can build your own exams x We provide you with three mock exams including the December 2009 exam x We provide the ACCA examiner's answers as well as our own to the June and December 2009 exams as an additional revision aid Our i-Pass product also supports this paper FOR EXAMS IN 2010 P R A C T I C E & R E V I S I O N K I T First edition 2007 Fourth edition January 2010 ISBN 9780 7517 8050 (previous ISBN 9780 7517 4724 9) British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA www.bpp.com/learningmedia All our rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media Ltd We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions The suggested solutions in the exam answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated Printed in the United Kingdom Your learning materials, published by BPP Learning Media Ltd, are printed on paper sourced from sustainable, managed forests ii © BPP Learning Media Ltd 2010 Contents Page Finding questions Question index iv Topic index ix Using your BPP Learning Media Practice and Revision Kit xii Revising F4 General exam support from BPP Learning Media xiii Topics to revise xiii Question practice xiii Passing the F4 exam xiv Exam information xvii Analysis of past papers xx Useful websites xxi Planning your question practice BPP Learning Media’s question plan xxii Build your own exams xxvii Questions and answers Questions Answers 29 Exam practice Mock exam x Questions 189 x Plan of attack .193 x Answers .195 Mock exam x Questions 211 x Plan of attack .217 x Answers .219 Mock exam (December 2009) x Questions 237 x Plan of attack .243 x Answers .245 ACCA examiner's answers x June 2009 263 x December 2009 275 Review form & free prize draw iii Question index The headings in this checklist/index indicate the main topics of questions, but questions may cover several different topics Questions set under the old syllabus 2.2 paper are included because their style and content reflect the F4 exam Some questions have been amended to reflect the current exam format Time Page number Marks allocation Mins Question Answer Part A: Essential elements of the legal system Types of law 10 18 29 Legal system and courts (12/07) 10 18 30 Civil courts and tracks (2.2 12/02) 10 18 31 Contemporary sources of law (12/08) 10 18 33 Precedent 10 18 35 Precedent; terms (6/09) 10 18 37 Legal terms (2.2 6/05) 10 18 38 Common law and legislation (6/08) 10 18 40 Delegated legislation (Pilot Paper) 10 18 42 10 18 44 11 Alvin (12/08) 10 18 45 12 Ann's art (2.2 12/01 amended) 10 18 47 13 Ali (12/07) 10 18 49 14 Offers and invitations to treat l (2.2 6/04) 10 18 50 15 Offers and invitations to treat II (6/08) 10 18 51 16 Acceptance and revocation of offer (2.2 6/03) 10 18 53 17 Ace Ltd (2.2 6/07 amended) 10 18 55 18 Car filters (Pilot Paper) 10 18 56 19 Presumption and rebuttal (2.2 12/05) 10 18 57 20 Alan's intention (2.2 12/04 amended) 10 18 59 21 Privity and intention (12/07) 10 18 61 22 Consideration (6/09) 10 18 62 23 Forms of consideration (2.2 12/02) 10 18 64 24 Paying Adam (2.2 6/03 amended) 10 18 65 25 Types of term I (Pilot Paper) 10 18 67 26 Types of term II (6/09) 10 18 68 27 Exclusion clauses (2.2 6/02) 10 18 70 28 Seller Ltd and Transport Ltd 10 18 72 29 Breach of contract (12/08) 10 18 74 30 Arti (6/09) 10 18 75 31 Astride's wall (6/08) 10 18 10 77 10 Sources of law and the Human Rights Act 1998 Part B: The law of obligations iv Finding questions Time Page number Marks allocation Mins Question Answer 32 Remedies for breach (2.2 12/02 and 12/04) 10 18 10 79 33 Remoteness and measure of damages (2.2 6/04) 10 18 10 81 34 Roger and Lulu 10 18 10 83 35 Remoteness of damage (12/07) 10 18 10 84 36 Duty of care (Pilot Paper) 10 18 11 85 37 Standard of care (6/08) 10 18 11 86 38 Causality and remoteness 10 18 11 87 39 Defences (12/08) 10 18 11 88 40 Accountants4U 10 18 11 90 41 Employed v self-employed (6/08) 10 18 12 91 42 Employment contracts (2.2 Pilot Paper) 10 18 12 93 43 Common law duties (2.2 6/02) 10 18 12 94 44 Redundancy (Pilot Paper and 6/09) 10 18 12 96 45 Constructive and unfair dismissal (12/07) 10 18 12 98 46 Constructive and fair dismissal (12/08) 10 18 12 100 47 Grace and Fawn Ltd (2.2 12/02 amended) 10 18 13 102 48 Impact College (2.2 12/05 amended) 10 18 13 103 49 Types of authority (2.2 12/01) 10 18 14 104 50 Unlimited and limited partnerships 10 18 14 106 51 Ham, Sam and Tam (12/08) 10 18 14 108 52 Clare, Dan and Eve (6/08) 10 18 14 109 53 Partnership liability 10 18 15 111 54 Partnership v company (2.2 12/01 amended) 10 18 15 112 55 Termination of partnerships (2.2 12/02) 10 18 15 113 56 Types of company (2.2 6/02) 10 18 15 115 57 Separate personality (6/08) 10 18 15 116 58 Mick's company (2.2 12/05 amended) 10 18 15 118 59 Public companies (Pilot Paper) 10 18 15 120 60 Company registers and accounting records (2.2 6/02 amended) 10 18 16 121 61 Eden plc (2.2 6/05 amended) 10 18 16 122 Part C: Employment law Part D: The formation and constitution of business organisations 62 Objects clause (2.2 6/05 amended) 10 18 16 123 63 Articles (2.2 6/04 amended) 10 18 16 125 64 Fred (12/08) 10 18 17 126 65 Company names (6/09) 10 18 17 128 66 Various terms (2.2 6/06) 10 18 17 129 Finding questions v Time Page number Marks allocation Mins Question Answer 67 Issue and premium (2.2 12/01) 10 18 18 131 68 Capital terms I (2.2 12/03 amended) 10 18 18 132 69 Shares and debentures (6/08) 10 18 18 133 70 Capital terms II (12/08) 10 18 18 135 71 Capital maintenance and reducing share capital (6/09) 10 18 18 136 72 Class rights (2.2 12/02) 10 18 19 139 73 Flop Ltd (Pilot Paper) 10 18 19 140 74 Lux Ltd (2.2 6/07 amended) 10 18 19 142 75 Dividends (12/07) 10 18 19 143 76 Debentures and charges (2.2 6/04) 10 18 20 144 Resolutions (12/08) 10 18 21 146 78 Meetings (Pilot Paper) 10 18 21 148 79 Company secretary (2.2 Pilot Paper and 6/05) 10 18 21 149 80 Implied authority and company secretary (2.2 6/07) 10 18 21 150 81 Appointment and removal (2.2 12/03) 10 18 21 151 82 Statutory grounds for disqualifying directors (6/09) 10 18 22 152 83 Statutory duties 10 18 22 154 84 Promoting success (12/08) 10 18 22 155 85 Powers and duties of directors (2.2 6/03) 10 18 22 156 86 Helen (2.2 12/03 amended) 10 18 22 158 87 Directors (6/08) 10 18 22 159 88 Auditors I (2.2 6/03) 10 18 23 161 89 Auditors II (12/07) 10 18 23 163 90 Katch Ltd (12/07) 10 18 23 165 91 Clean Ltd (6/09) 10 18 23 166 Liquidation (2.2 12/04 amended) 10 18 24 168 93 Compulsory winding up 10 18 24 170 94 Lazy Days 10 18 24 171 95 Earl (12/07) 10 18 24 172 Part E: Capital and the financing of companies Part F: Management, administration and regulation of companies 77 Part G: Legal implications of companies in difficulty or in crisis 92 vi Finding questions Time Page number Marks allocation Mins Question Answer Part H: Governance and ethical issues relating to business 96 Directors and corporate governance (Pilot Paper) 10 18 25 173 97 Huge plc (Pilot Paper) 10 18 25 175 98 Sid and Vic (6/08) 10 18 25 176 99 Wrongful trading (2.2 12/05) 10 18 25 178 100 Push Ltd (2.2 6/07 amended) 10 18 26 179 101 Money laundering (2.2 12/05) 10 18 26 180 102 Greg (6/09) 10 18 26 181 Mock exam Questions 103 to 112 Mock exam Questions 113 to 122 Mock exam (December 2009) Questions 123 to 132 Planning your question practice Our guidance from page xxii shows you how to organise your question practice, either by attempting questions from each syllabus area or by building your own exams – tackling questions as a series of practice exams ACCA examiner's answers The ACCA examiner's answers to questions marked 'Pilot paper', '12/07', ‘6/08’ or ‘12/08’ can be found on the BPP website at the following link: www.bpp.com/acca/examiner-solutions Additional question guidance Additional guidance to certain questions can be found on the BPP website at the following link: www.bpp.com/acca/extra-question-guidance Finding questions vii Using your BPP Learning Media products This Kit gives you the question practice and guidance you need in the exam Our other products can also help you pass: x Learning to Learn Accountancy gives further valuable advice on revision x Passcards provide you with clear topic summaries and exam tips x Success CDs help you revise on the move x i-Pass CDs offer tests of knowledge against the clock You can purchase these products by visiting www.bpp.com/mybpp You can view demonstrations of i-Learn and i-Pass products by visiting www.bpp.com/acca/studymaterials/#ilearn Scroll down the page until you find the sections for i-Learn and i-Pass and click on the appropriate 'View demo' button viii Finding questions Topic index Listed below are the key Paper F4 syllabus topics and the numbers of the questions in this Kit covering those topics If you need to concentrate your practice and revision on certain topics or if you want to attempt all available questions that refer to a particular subject, you will find this index useful Syllabus topic Question numbers Acceptance Administration Agent's authority Articles of association Auditors 11, 12, 13, 16, 17, 18 94 49 62, 63, 64, Mock exam 2: Q9 88, 89 Breach of contract 29-33 Capital maintenance Case law Causality Charges Class rights Company formation Company meetings Company names Company records Company resolutions Company secretary Compulsory liquidation Consideration Constructive dismissal Contract law Contract of service/for services Corporate governance Corporate personality Court system Criminal activity in companies 71 4, 5, 6, 7, 8, 10 38, Mock exam 1: Q5 76, Mock exam 2: Q9 72, 78 58, 59 78, Mock exam 1: Q6 65, Mock exam 2: Q5 60 77 79, 80 93 22-24 43, 45, 46 11 – 33, Mock exam 1: Q2, Mock exam 1: Q3, Mock exam 2: Q2, Mock exam 2: Q3, Mock exam 2: Q8, Mock exam 3: Q2, Mock exam 3: Q3, Mock exam 3: Q8 41, 42 96 57, 58 2, 3, 97-102, Mock exam 1: Q7, Mock exam 3: Q10 Damages Debentures Defences to negligence Delegated legislation Directors' appointment and removal Directors' duties and powers Directors' role Dismissal from employment Disqualification of directors Dividends Duty of care 31-33 69, 76 39 9, Mock exam 2: Q1 81, 82 83-85, Mock exam 1: Q9, Mock exam 3: Q9 85, 87 43-48, Mock exam 1: Q8, Mock exam 2: Q4 82 75 36, 37, 40, Mock exam 1: Q5, Mock exam 2: Q6 Employers' duties Employment contract Exclusion clauses 43 42, Mock exam 3: Q7 27, 28, Mock exam 2: Q8 Finding questions ix 278 ACCA Examiner's Answers: December 2009 ACCA Examiner's Answers: December 2009 279 280 ACCA Examiner's Answers: December 2009 ACCA Examiner's Answers: December 2009 281 282 ACCA Examiner's Answers: December 2009 ACCA Examiner's Answers: December 2009 283 284 ACCA Examiner's Answers: December 2009 ACCA Examiner's Answers: December 2009 285 286 ACCA Examiner's Answers: December 2009 Notes Notes Notes Notes Review Form & Free Prize Draw – Paper F4 Corporate and Business Law (Eng) (1/10) All original review forms from the entire BPP range, completed with genuine comments, will be entered into one of two draws on 31 July 2010 and 31 January 2011 The names on the first four forms picked out on each occasion will be sent a cheque for £50 Name: Address: How have you used this Kit? (Tick one box only) During the past six months you recall seeing/receiving any of the following? (Tick as many boxes as are relevant) Home study (book only) On a course: college Our advertisement in Student Accountant With 'correspondence' package Our advertisement in Pass Other Our advertisement in PQ Our brochure with a letter through the post Why did you decide to purchase this Kit? (Tick one box only) Our website www.bpp.com Which (if any) aspects of our advertising you find useful? (Tick as many boxes as are relevant) Have used the complementary Study text Have used other BPP products in the past Recommendation by friend/colleague Prices and publication dates of new editions Recommendation by a lecturer at college Information on product content Saw advertising Facility to order books off-the-page Other None of the above Which BPP products have you used? Text Success CD Learn Online Kit i-Learn Home Study Package Passcard i-Pass Home Study PLUS Your ratings, comments and suggestions would be appreciated on the following areas Very useful Useful Not useful Good Adequate Poor Yes No Passing ACCA exams Passing F3 Questions Mock exam answers Overall opinion of this Kit Excellent Do you intend to continue using BPP products? The BPP author of this edition can be e-mailed at: stephenosborne@bpp.com Please return this form to: Lesley Buick, ACCA Publishing Manager, BPP Learning Media Ltd, FREEPOST, London, W12 8BR Review Form & Free Prize Draw (continued) TELL US WHAT YOU THINK Please note any further comments and suggestions/errors below Free Prize Draw Rules Closing date for 31 July 2010 draw is 30 June 2010 Closing date for 31 January 2011 draw is 31 December 2010 Restricted to entries with UK and Eire addresses only BPP employees, their families and business associates are excluded No purchase necessary Entry forms are available upon request from BPP Learning Media Ltd No more than one entry per title, per person Draw restricted to persons aged 16 and over Winners will be notified by post and receive their cheques not later than weeks after the relevant draw date The decision of the promoter in all matters is final and binding No correspondence will be entered into ... 99, 100 Finding questions xi USING YOUR BPP LEARNING MEDIA PRACTICE AND REVISION KIT Using your BPP Learning Media Practice and Revision Kit Tackling revision and the exam You can significantly... exam is the December 2009 paper xii Using your BPP Learning Media Practice and Revision Kit Revising F4 General exam support from BPP Learning Media BPP Learning Media is committed to giving you... questions can be found on the BPP website at the following link: www .bpp. com /acca/ extra-question-guidance Finding questions vii Using your BPP Learning Media products This Kit gives you the question