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ACCA Corporate and Business Law (LW) 2025 past questions and answers

This 2025 ACCA Corporate and Business Law (LW) set has 20 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2025 set with instant marking.

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Sample ACCA Corporate and Business Law (LW) 2025 questions

1. A supplier brings a civil claim in the County Court. The dispute raises a point already decided by the Supreme Court in a relevant case. Which statement best describes the County Court's position?
  1. It must follow the relevant Supreme Court decision.
  2. It may disregard the decision if it prefers the Court of Appeal's reasoning in an unrelated case.
  3. It is bound only by decisions of other County Courts.
  4. It must refer every case involving precedent to the Supreme Court.

Answer: A. It must follow the relevant Supreme Court decision.

The County Court is bound by relevant decisions of higher courts, including the Supreme Court. It is not bound by decisions of courts at the same or a lower level.

2. Mira offers to sell a used machine to Leon for £8,000 and says the offer will remain open until Friday. On Wednesday, Leon replies, 'I will buy it for £7,500.' Mira rejects that proposal. On Thursday, Leon says he accepts the original £8,000 offer. What is the legal position?
  1. Leon accepted the original offer because it was stated to remain open until Friday.
  2. Leon made a counter-offer, which terminated the original offer; his Thursday acceptance is ineffective unless Mira renews the offer.
  3. Leon made an inquiry that left the original offer open, so a contract was formed on Thursday.
  4. Mira's rejection of the £7,500 proposal automatically revives the original offer.

Answer: B. Leon made a counter-offer, which terminated the original offer; his Thursday acceptance is ineffective unless Mira renews the offer.

A counter-offer rejects and terminates the original offer unless the offeror renews it. The statement that the offer would remain open until Friday does not prevent the offeree from terminating it by a counter-offer.

3. An employee has completed five years of continuous employment in England. The employer terminates the employment, and the contract gives no notice entitlement. What is the employee's minimum statutory notice entitlement from the employer?
  1. One week
  2. Two weeks
  3. Five weeks
  4. Twelve weeks

Answer: C. Five weeks

After two or more years of continuous employment, the statutory minimum is one week for each complete year of service, up to 12 weeks. Five completed years therefore gives five weeks' notice.

4. A business files the required documents to register a private company in England and Wales. Companies House issues the certificate of incorporation on 12 May. Which statement is correct?
  1. The company exists from the date its first director signs the application.
  2. The company exists only after it has opened a bank account and issued shares.
  3. The company exists from the date the application was posted to Companies House.
  4. The company comes into existence on 12 May, the date stated on its certificate of incorporation.

Answer: D. The company comes into existence on 12 May, the date stated on its certificate of incorporation.

A registered company comes into existence on the date shown on its certificate of incorporation. Filing an application or opening a bank account does not itself create the company.

5. A company with £1 nominal-value ordinary shares issues some shares for £1.40 each. How should the amount received above nominal value be treated in the company's accounts?
  1. It must be credited to the share premium account.
  2. It must be credited to the company's trading income account.
  3. It must be repaid to the subscribers after the first annual general meeting.
  4. It must be recorded as a director's loan.

Answer: A. It must be credited to the share premium account.

The amount received above nominal value on an issue of shares is share premium and is credited to the share premium account. It is not ordinary trading income or a loan.

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