LPC EXAM STUDY GUIDE 2025/2026 Accurate
Questions and Verified Correct Solutions with Detailed
Rationales |
| 100% Guaranteed Pass
<Latest Version>
Description: Comprehensive LPC (Legal Practice Course) exam preparation guide
covering core practice areas, case law, client care, and professional conduct.
Includes 2025/2026 verified questions, mock exams, and full rationales.
Keywords: LPC, legal practice, law exam, solicitor training, 2025 study guide,
legal ethics, exam preparation
LPC EXAM STUDY GUIDE 2025/2026
Accurate Questions and Verified Correct Solutions with Detailed Rationales
,PART 1: CORE PRACTICE AREAS - BUSINESS LAW & PRACTICE
1. What is the primary advantage of a private company limited by shares?
A) Ability to raise capital from the public.
B) Members have unlimited liability.
C) Separate legal personality from its members.
D) It is not subject to the Companies Act 2006.
Answer: C) Separate legal personality from its members.
Rationale: This is the fundamental principle established in Salomon v Salomon &
Co Ltd. It means the company is a distinct legal entity, separate from its owners
(shareholders), who have limited liability.
2. Under the Model Articles for private companies, what is the default rule for
directors' power to manage the company?
A) The shareholders must approve all management decisions.
B) The directors are responsible for managing the company's business.
C) The company secretary has joint management authority.
D) Management powers are vested in the Chief Executive Officer only.
Answer: B) The directors are responsible for managing the company's
business.
, Rationale: Article 3 of the Model Articles for private companies states that "the
directors are responsible for the management of the company's business, for which
purpose they may exercise all the powers of the company."
3. Which of the following is a mandatory solvency statement required for a
reduction of share capital supported by a solvency statement?
A) The company will be able to pay its debts as they fall due for the next 6 months.
B) The company's assets exceed its liabilities.
C) The company has not been insolvent in the previous 12 months.
D) The reduction is fair and reasonable to all shareholders.
Answer: A) The company will be able to pay its debts as they fall due for the
next 12 months.
Rationale: Under the Companies Act 2006, s. 643, each director must make a
statement that the company will be able to pay its debts as they fall due during the
year immediately following the date of the statement.
4. What is the primary purpose of due diligence in an acquisition?
A) To draft the share purchase agreement.
B) To investigate and assess the target company's business and liabilities.
C) To negotiate the purchase price with the seller.
D) To obtain regulatory approval for the transaction.
Questions and Verified Correct Solutions with Detailed
Rationales |
| 100% Guaranteed Pass
<Latest Version>
Description: Comprehensive LPC (Legal Practice Course) exam preparation guide
covering core practice areas, case law, client care, and professional conduct.
Includes 2025/2026 verified questions, mock exams, and full rationales.
Keywords: LPC, legal practice, law exam, solicitor training, 2025 study guide,
legal ethics, exam preparation
LPC EXAM STUDY GUIDE 2025/2026
Accurate Questions and Verified Correct Solutions with Detailed Rationales
,PART 1: CORE PRACTICE AREAS - BUSINESS LAW & PRACTICE
1. What is the primary advantage of a private company limited by shares?
A) Ability to raise capital from the public.
B) Members have unlimited liability.
C) Separate legal personality from its members.
D) It is not subject to the Companies Act 2006.
Answer: C) Separate legal personality from its members.
Rationale: This is the fundamental principle established in Salomon v Salomon &
Co Ltd. It means the company is a distinct legal entity, separate from its owners
(shareholders), who have limited liability.
2. Under the Model Articles for private companies, what is the default rule for
directors' power to manage the company?
A) The shareholders must approve all management decisions.
B) The directors are responsible for managing the company's business.
C) The company secretary has joint management authority.
D) Management powers are vested in the Chief Executive Officer only.
Answer: B) The directors are responsible for managing the company's
business.
, Rationale: Article 3 of the Model Articles for private companies states that "the
directors are responsible for the management of the company's business, for which
purpose they may exercise all the powers of the company."
3. Which of the following is a mandatory solvency statement required for a
reduction of share capital supported by a solvency statement?
A) The company will be able to pay its debts as they fall due for the next 6 months.
B) The company's assets exceed its liabilities.
C) The company has not been insolvent in the previous 12 months.
D) The reduction is fair and reasonable to all shareholders.
Answer: A) The company will be able to pay its debts as they fall due for the
next 12 months.
Rationale: Under the Companies Act 2006, s. 643, each director must make a
statement that the company will be able to pay its debts as they fall due during the
year immediately following the date of the statement.
4. What is the primary purpose of due diligence in an acquisition?
A) To draft the share purchase agreement.
B) To investigate and assess the target company's business and liabilities.
C) To negotiate the purchase price with the seller.
D) To obtain regulatory approval for the transaction.
