SESSION 2 ASSESSMENT for The Legal Cheek Commercial Awareness Academy 2024-25: A deep dive into corporate law and its relationship with the commercial environment – with Baker McKenzie
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1. What is a public company?
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A company that owns a majority of shares in a number of smaller companies
A company whose shares are traded freely on a stock exchange
A large company whose activities are often discussed by the media
A company whose shares are owned by founders, executive management, and private investors
2. What is an asset purchase?
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A deal in which the buyer acquires all the assets of a business by purchasing all the target company’s shares
A deal in which the buyer assumes all the target business’s liability
A deal in which the buyer acquires selected rights and assets from a target company
A deal in which two companies combine their assets to form one new company
3. A private equity firm is looking to sell a company and is keen to secure a “clean break”. Which TWO of the following features would you be likely to find in this deal?
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Buyer-side warranty and indemnity (W&I) insurance
A long list of representations, warranties and indemnities
A locked box closing mechanism
A purchase price which can be easily adjusted
Q3 calculation
4. Your firm is assisting on an acquisition in which the key asset of the target company is its people. Which ONE of the below teams would be most heavily involved in the due diligence process?
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Real estate
Tax
Employment
Intellectual property
5. If a target’s key asset is its people, what might a buyer do to try to retain the business’s management team? Select THREE.
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Buy the target company as quickly as possible
Pay the management team’s consideration staggered over two or three years
Add non-compete clauses to the share purchase agreement
Agree that the management team will be paid more if they meet certain financial targets in the future
Q5 calculation
6. You are assisting on the sale of a business which is fully integrated into your client’s company and is not a standalone business. Which type of buyer will it be MOST DIFFICULT to sell this business to?
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A competitor company in the same industry
A large well-established company looking to move in to this industry
A smaller company in the same industry
Private equity buyers
7. How might a seller make a fully integrated, not standalone business more appealing to potential buyers?
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Agreeing to give the business access to some of the seller’s assets for a transitional period after completion of sale
Asking for a higher purchase price
Not disclosing which assets are owned by the business
Holding payment in escrow until the transaction has been completed
8. How might a buyer respond to the risks of a proposed transaction? Select THREE.
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Reducing the purchase price
Using a Heads of Terms agreement
Securing indemnities against specific risks
Abandoning the deal
Q8 calculation
9. Understanding your client’s business is key to being a successful corporate lawyer. How would you go about getting to know a business better? Select THREE.
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Set up conversations with members of the business
Build your knowledge of the sector the business operates in
Wait for the business to come to you with their concerns
Look at the business’s annual report
Q9 calculation
10. Which TWO of the following are trends which have affected M&A deal activity over the last few years?
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Junior lawyers being paid higher salaries
A rise of class actions and group litigation claims in the English courts
Larger businesses divesting their non-core business lines to focus on their core business
Changing interest rates creating uncertainty around the price of debt
Q10 calculation
Calculation
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