Question 1

**Scenario:** 'Urban Canopy Initiatives', a community group, wants to form a corporate entity to buy land for rooftop forests. They want limited liability to protect their members, but they do not want to issue shares, and any surplus income will be reinvested into the community rather than distributed as profit. Before incorporation, founder Elena signs a contract for a crane in the name of 'Urban Canopy Initiatives Ltd'.

**Question:** Which corporate structure is most appropriate for Urban Canopy Initiatives?

Accepted Answer

Match the requirements (limited liability, no shares, non-profit motive) to the standard corporate forms.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Choosing a company limited by shares, ignoring the prompt's specific requirement of 'do not want to issue shares'.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA LW — Corporate and Business Law Practice Exam 2

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