CIMA CIMA Certification BA4

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CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:

1. You work for a company based in a capital city that leases office space to other organizations. Which of the following corporate issues is not related to ethics or social responsibility?

A) The energy efficiency of the buildings that you rent out
B) Whether your buildings provide a safe and secure environment for workers and visitors
C) Honest and transparent contracts with your customers
D) Having the prestige of renting out some of a capital city's most famous landmarks

2. Which of the following statements is incorrect in relation to a public company limited by shares?

A) The company must have issued at least £50,000 of shares.
B) The company must have at least one shareholder.
C) The company must have at least one director.
D) The company must ensure that its company secretary is properly qualified whereas a private company need not have a company secretary.

3. Which of the following is the main legislature within the European Union?

A) The Council of the European Union
B) The European Court of Justice
C) The European Parliament
D) The European Commission

4. Exe Ltd contracted to manufacture and deliver machinery to Wye plc for a price of £100,000. As required by the contract, Wye plc paid a deposit to Exe Ltd of £20,000. In order to fulfil its contract it has been necessary for Exe Ltd to purchase specialist tools and equipment. Before the contract was completed, Exe Ltd's factory was destroyed by fire. Neither Exe Ltd nor Wye plc was in any way responsible for the fire.
Which of the following is INCORRECT?
(i) The contract between Exe Ltd and Wye plc has become frustrated.
(ii) The contract may remain enforceable if the parties have agreed a force majeure clause which specifies the repercussions of a factory fire.
(iii) As the deposit was payable before the contract became unenforceable, Wye plc will lose its deposit of £20,000.

A) (i) only
B) (ii) only
C) (iii) only
D) (ii) and (iii) only

5. Which ONE of the following in INCORRECT in relation to a Limited Liability Partnership ("LLP")?

A) An LLP, like a company limited by shares, is a separate legal entity.
B) In return for Limited liability, an LLP, like a company, is required to submit an annual return.
C) An LLP must have "designated members" which are the LLP equivalent of the board of directors of a private company.
D) Outsiders contract with the LLP and not with the partners, just as outsiders would contract with the company and not the directors or shareholders of the company.

Solutions: