ACCA LW · Chapter 9 · Question 10 of 11
Which of the following events would normally cause a floating charge to crystallise?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) The commencement of winding up of the company
Explanation
A floating charge crystallises, becoming fixed on the assets then held, on events such as liquidation, the company ceasing to carry on business, the appointment of a receiver, or a specified event under the charge document. Ordinary trading such as buying stock is exactly what a floating charge permits. Payment of a dividend or a change of directors does not cause crystallisation unless the charge document says so.
More Share capital, loan capital and capital maintenance MCQs
- Q1Unless the articles provide otherwise, how are the dividend rights of preference shares presumed to operate?
- Q2Under s630 Companies Act 2006, how may the rights attached to a class of shares be varied where the articles contain no provision for…
- Q3A company issued new ordinary shares, which reduced the proportionate voting power of the existing preference shareholders. The preference…
- Q4Under s561 Companies Act 2006, when a company proposes to allot new ordinary shares for cash, what right do existing ordinary shareholders…
- Q5A company issues 10,000 shares of nominal value 1 each for 2.50 per share, paid in cash. What amount must be credited to the share premium…