Chapter 18 Multiple choice questions

. Decisions passed by shareholders are known as:

Resolutions.

Provisions.

Articles.

Memorandums.

. Which one of the following statements is incorrect?

Notice of meetings must be given to every member and every director.

All companies must hold annual general meetings.

Directors and secretaries of public companies that fail to hold an annual general meeting are liable to a fine.

The directors of a company can be required to hold a general meeting by the company's auditors if the auditors intend to resign.

. Which of the following meetings are all shareholders invited to?
annual general meeting.
1. general meeting.
2. class meeting.
3. board meeting.

1 only.

1 and 2 only.

1, 2, and 3 only.

1, 2, 3, and 4.

. What is meant by voting by poll?

Where each shareholder or his proxy present at the meeting, has one vote irrespective of the number of shares they hold.

Where each shareholder has the right to vote in writing.

Where the chairman of the meeting casts the final vote.

Where each shareholder or their proxies present at the meeting use as many votes as their shareholding allows them.

. What percentage of shareholders is needed to pass special resolution?

It must be unanimous.

Not less than 90%.

Not less than 75%.

More than 50%.

. Which one of the following statements is correct?

Where a written resolution is proposed a copy of the resolution must always be sent by post to every shareholder.

Only Directors can propose written resolutions.

Only Shareholders can propose written resolutions.

Public companies cannot pass written resolutions.

. What is a derivative claim?

A claim brought by a company against one of its directors for negligence., default or breach of duty or breach of trust.

A claim brought by minority shareholders on the grounds that they have been unfairly treated by the majority of shareholders.

Where a shareholder, in place of the company, brings a claim against a director of the company for negligence, default or breach of duty or breach of trust.

A petition to have the company wound up.

. How is voluntary liquidation of a company commenced?

By a Court Order.

By an ordinary resolution of shareholders.

By a special resolution of shareholders.

By a decision of the Board of Directors.

. Where an individual uses price-sensitive information, which has not been made public, relating to the present or future value of company securities for his own profit it is called:

Wrongful trading.

Fraudulent trading.

Insider dealing.

Market abuse.

. Where on winding up it is discovered that a company has been trading and at the time the director or directors knew or ought to have known that there was no reasonable prospect of the company avoiding insolvent liquidation it is known as:

Wrongful trading.

Fraudulent trading.

Illegal dealing.

Market abuse.

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