Study Zone

ATC's ACCA Exam Tips (June 2010) F4GLO (Business and Company Law – Global variant)

The F4 paper contains 10 compulsory 10-mark questions, testing knowledge and understanding across the whole syllabus.

Questions 1-7 are essay questions, and questions 8,9 and 10 are scenario-based problem questions. The law relating to Legal Systems is examined in essay questions. The other syllabus areas can be tested in both essay and problem form.

There is no fool proof method for predicting the exact contents of the examination. Only the Examiner himself knows what will be in the paper, and he repeatedly warns against ‘question spotting’. The tips that follow suggest key topics which we consider to be likely subjects for examination at this sitting.

The Examiner favours English law as the model for looking at business organisations – agency, partnerships and company law. Be sure to read the Examiner’s article on the Supreme Court in the January 2010 issue of the Student Accountant. The article offers important insights into the examiner’s view of the principle of separation of powers in democratic states. And bear in mind that in the present financial environment business funding, good governance, insolvency and the rights of creditors remain particularly topical.

Exam Tips

• 1 Question 1 and often also question 2 is always based on the nature of law, its creation, interpretation and enforcement. Possible areas for testing at this sitting are the international institutions and courts involved in making, monitoring applying international trade law (eg UNCITRAL; ICC etc); or the principle of the separation of powers in constitutional law and theory.
Look also at the role of the parties in arbitration proceedings using the UNCITRAL Model Law on Arbitration.

• 2 You can expect three or four questions on international business transactions and methods of payment, with two or three essay questions and one problem. Be ready to answer a question about aspects of the creation of contracts under the United Nations Convention on Contracts for the International Sale of Goods (‘CISG’) – offer and acceptance are regularly tested; as are matters relating to the rights and duties of parties, including the seller’s responsibilities and the requirement of conformity of goods under Article 35 of CISG.
• 3 You should be prepared to explain the remedies available to the buyer or seller under CISG and how the parties access the remedies.
• 4 Questions 4, 5 and 6 are usually essay questions about business organisations. There may be a question on partnership law. Be aware of the different forms of partnership organisation, and the liability of business partners for business debts and obligations.
Moving on to company law, look at the matters relating to company formation, the company’s articles of association, and the matters to be considered by the company promoters.
• 5 Corporate finance is always important: look particularly at the distinctions between shares and debentures, at the rights and responsibilities of shareholders and debenture holders; and at the rules relating to dividend payments.
• 6 Corporate management and governance are central to the syllabus. Be ready to explain and apply the rules relating to directors’ and company secretaries’ duties and the requirements of good corporate governance. Meetings and resolutions should also be considered.
• Question 7 frequently addresses the management of transport, risk and payment in international business transactions. Be ready to answer a question on INCOTERMS or on credit transfers, and letters of credit.
• 8 Questions 8, 9 and 10 are always problem-based, requiring you to analyse a scenario and often to advise the parties. Question 8 is likely to be about international business transactions (see tips 2 and 3 above).
• 9 Insolvency proceedings and the rights of creditors could form the basis of an essay or problem question – consider again the position of debenture holders and shareholders, and of other creditors, in an insolvent business
10 Business mismanagement and fraudulent activity is another very topical subject. For this sitting, consider market abuse and its consequences.

By Deborah Lloyd

[«all Studies]