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ATC's ACCA Exam Tips (June 2010) F4ENG (Business and Company Law)

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 the Legal System and tort (including negligence) are 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.

Be sure to read the Examiner’s article on the Supreme Court in the January 2010 issue of the Student Accountant. 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 of the paper is always based on the nature of law, its creation, interpretation and enforcement within the English Legal System. A likely area for examination at this sitting is the role and significance of new Supreme Court of the United Kingdom
• 2 You can expect at least two questions on contract law, including one problem. Be ready to answer a question about aspects of the creation of contracts – invitation, offer and acceptance and consideration are regularly tested – offers, counter-offers, rejection and revocation, and the consideration (value) element of contracts are possibilities for this sitting.
The nature and remedies for breach, including conditions, warranties and the remoteness of damage, are also key areas, and highly examinable.

• 3 The torts of negligence and passing off were introduced into the syllabus as topics in their own right from the December 2007 sitting. There has been an essay question on this area at every sitting since then. Look particularly at the remoteness of damage and at defences in negligence claims for this sitting.
• 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
Also look at the matters relating to company formation, the company’s constitution (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.
• 7 There is frequently a question about employment law, either an essay or a problem question. Look particularly at the difference between contracts of employment and contracts for services, and at employees’ rights should they be unfairly dismissed, and in relation to redundancy
• 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 contract law (see tip (2) 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. Consider market abuse and its consequences.

By Deborah Lloyd

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