Chapter 17 Multiple choice questions

. Which one of the following statements is incorrect?

The statutory minimum age of a director is 18.

There is no statutory maximum age for directors.

.A public limited company must have at least two directors.

There are no legal qualifications necessary for being a director.

. What is the legal minimum number of directors for a private limited company?

1

2

5

20

. What is a shadow director?

A director who does not attend Board meetings

A person who is not appointed as a director but whose directions or instructions the directors of a company follow.

A person appointed to attend Board meetings and vote in place of a director.

A director who has recently retired from the Board. .

. A shareholder who wishes to make a proposal that that a director is dismissed must give the company 'special notice' of their proposal prior to the meeting. How many days notice is required for special notice?

7

14

28

42

. Which Act gives the court power to disqualify someone from being a director if they have been guilty of fraudulent trading or have been participating in wrongful trading?

Fraudulent Trading Act 2006

Companies Act 2006

Insolvency Act 1986

Company Directors Disqualification Act 1986

. Which one of the following statements is correct?

A company can never have unrestricted objects.

Where a director acts without authority from the Board of Directors, all transactions entered into with third parties will be void.

Where a director acts outside or beyond the powers given to him by the company, all transactions entered into with third parties acting in good faith will be voidable by the company.

Where a director acts outside or beyond the powers given to him by the company, all transactions entered into with third parties acting in good faith are deemed to be free of any limitations under the company's constitution.

. The Companies Act 2006 ss171-177 imposes various duties on directors. Which of the following is not imposed by the Act?

To promote the success of the company.

To attend the minimum of two Board meetings annually.

To exercise independent judgment.

To exercise reasonable skill care and diligence.

. Where court action is taken against a director for breach of duty any compensation awarded by the court is payable to:

The Board of Directors.

The shareholders.

The company.

The creditors.

. In order to be a company secretary of a private limited company what qualifications must you have?

A qualified UK lawyer.

A qualified Accountant

You need no qualifications.

Have been a secretary of a public company for at least three years out of the last five.

. Which one of the following statements is incorrect?

It is a criminal offence for anyone to knowingly or recklessly give an auditor misleading, false or deceptive information.

An auditor has the duty to audit a company's accounts, and to report to the shareholders on whether the accounts give a true and fair view of the financial position of the company and have been properly prepared in accordance with the Companies Act 2006.

The auditor cannot be an officer or employee of the company or in partnership with someone who is an officer or employee of the company.

An Auditor cannot be removed before the expiry of his term of office.

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