Legal Concepts

Question 1

What is a legal person.

Answer 1

A legal person can be a person or corporation who has rights, protections, privileges, responsibilities and liabilities under law.

Question 2

What is a legal personality.

Answer 2

A legal personality allows one of more natural persons to act as a single entity for legal purposes. This may shield its participants from personal liability.

Question 3

What is a legal personality.

Answer 3

A legal personality allows one of more natural persons to act as a single entity for legal purposes. This may shield its participants from personal liability.

Question 4

What is a power of attorney.

Answer 4

A power of attorney is a legal agreement that gives another person the power to make certain decisions on their behalf.

Question 5

What are the two forms of Lasting Power of Attorney.

Answer 5

Property and affairs lasting power of attorney: gives the recipient the ability to make decisions about the givers’ financial affairs.

Personal welfare lasting power of attorney: gives the recipient the ability to make decisions about the giver’s personal healthcare and welfare

Lasting Powers of Attorneys

Question 6

What is a contract.

Answer 6

A contract is an agreement creating and defining the obligations between two or more parties.

Question 7

What are the four elements of a contract.

Answer 7

1. Offer and acceptance (specific terms set out and accepted)
2. Consideration (something of value passing between parties)
3. Intention (intention for the agreement to become legally binding)
4. Terms and conditions (contracts are not normally binding if the terms and conditions are unclear)

Question 8

Under what four conditions can a contract be discharged

Answer 8

1. Performance: obligations accomplished by both parties
2. Agreement: both parties agree to end the contract
3. Frustration: completion of the contract is impossible
4. Breach: one party does not fulfill the terms and conditions

Question 9

Ownership of Property

What are the two types of ownership under English Law:

Answer 9

1. Legal ownership: named on the title documents e.g. land registry, share register.
2. Beneficial ownership: have the beneficial rights of ownership (e.g. use of property, voting rights on shares, financial benefits)

Question 10

Define insolvency

Answer 10

Insolvency is a situation when a company cannot pay it’s debts (is a state of being)

Question 11

Define Bankruptcy

Answer 11

Bankruptcy is a matter of law. Anyone can apply to the law to become bankrupt (e.g. individuals, sole traders, partners of a partnership)

When companies go into bankruptcy, they are placed into administration.

Question 12

1. How much debt can bankruptcy be declared for.
2. How can the debtor/creditor make a petition for bankruptcy

Answer 12

1. Bankruptcy’s can be made on debts of more than £5,000
2. The debtor: the debtor’s petition is made voluntarily by the debtor
3. The creditor: the creditors petition the courts for an enforcement order

Question 13

What is a will

Answer 13

A will is a written document that sets out how a deceased person’s estate is to be distributed.

Question 14

What are the 5 conditions for a will to be valid

Answer 14

1. Must be in writing
2. Must be signed and witnessed
3. The person must be 18 or over when it’s made
4. The person must have the mental capacity to understand the will
5. The person must not have made it under pressure from someone else

Question 15

What is a probate

Answer 15

A probate establishes ownership of the deceased person’s estate before assets are distributed.

Question 16

What happens to a person who dies without a valid love

Answer 16

A person who dies without a will, or with an invalid will, dies intestate. The estate will be distributed according to the statutory set of rules that leave a person’s estate to their next of kin in a fixed order.

Question 17

Define a trust

Answer 17

A trust is an arrangement that allows an individual (the settlor) to have assets controlled by certain parties (the trustees) for the benefit of other beneficiaries.

Question 18

What act do trustees need to follow

Answer 18

The trustee Act 2000

Question 18

What act do trustees need to follow

Answer 18

The trustee Act 2000

Question 19

What are the four types of trust

Answer 19

1. Bare trust:
   - trustee holds property for a single beneficiary
   - beneficiary has ABSOLUTE interest
   - Assets typically held in a trust until the beneficiary reaches the age of 18
2. Interest of possession trusts:
   - Beneficiary has a LIFE INTEREST (so is entitled to the immediate income from/use of trust property)
   - Reversionary interest held by the ‘remainderman’
3. Discretionary trusts:
   - NO BENEFICIARY has a right into income
   - Trustees have the power to accumulate and/or make distributions at their discretion
   - Trustees decide the amount of the trust that the beneficiary receives.
4. Charitable trusts:
   - Promotes a charitable purpose.
   - Charitable trust must be of a charitable nature and for the public benefit.